illegal dismissal

Villar firm faked titles through 'layering': ex-lawyer

Villar firm faked titles through ‘layering’: ex-lawyer
By Aries Rufo
abs-cbnnews.com/Newsbreak

SECOND of 3 parts

MANILA, Philippines – A case involving parcels of land, where a property developed by one of the real estate companies of presidential aspirant Manuel Villar Jr. now stands, is an example of how layering and faked documents were employed to acquire properties.

The land case, which involves contested properties in Cavite, was cited by dismissed lawyer Restituto Mendoza in a complaint he filed before the National Labor Relations Commission (NLRC). He used to be the in-house counsel of Adelfa Properties, one of the real estate properties in the Villar Group.

Related Content:


PART 1: Villar built business empire with deceit, corruption: ex-lawyer


PART 2: Villar firm faked titles through ‘layering’: ex-lawyer


PART 3: Villar firm’s high-end project sits on land for poor


PROFILE: The man who turned his back on Villar


SIDEBAR: Imus Estate land key to Villar-Ayala deal


SIDEBAR: Villar firms bribe and forge? The case of the undervalued crane


INTERACTIVE GRAPHIC: How Villar company obtained titles to contested land


VILLAR CAMP’S REPLY: Land grabbing allegations mere black propaganda: Villar

Villar has a 20% stake in Adelfa Properties, based on records obtained from the Securities and Exchange Commission in January. His wife, Las Pinas Rep. Cynthia, has another 19% stake. Adelfa Properties has a 24% stake in listed firm Vista Land and Lifescapes, according to a disclosure to the Philippine Stock Exchange.

The labor complaint of Mendoza, which Newsbreak obtained, turned out to be a tell-all testimony on the legal practices of some real estate companies that spawned the much-touted wealth of Villar. (Newsbreak counter-checked Mendoza’s claims in the labor complaint against other documents and interviews. Newsbreak also attended 2 hearings of the labor case at the NLRC.)

This case, Mendoza wrote in his complaint, illustrates the reach of Villar’s and his men’s tentacles of corruption to get their way. “It was in this case where complainant (Mendoza) witnessed the brazen corruption of Senator Villar’s senior officers,” Mendoza said in his complaint.

This is the particular case where he “never felt guiltier,” and was a reason why he turned his back on Villar.

Imus Estate

The contested land sits on Imus Estate, a 200-hectare friar land, which the government used to own.

The land case that Mendoza mentioned in his complaint involves a 5-hectare property, which is now where Armstrong Subdivision stands. The subdivision is one of the projects developed by Adelfa Properties. It is part of the 18-hectare land within the Imus Estate that is being contested by heirs of 3 families: Cuenca, Pakinggan, and Villanueva.

Records from the Land Management Bureau (LMB) showed that, in 1999, a committee of 5, led by Atty. Benjamin Asido of the legal division, conducted an investigation, which resulted in the awarding of Deeds of Conveyance to the heirs of Benito Cuenca and Urbana Pakinggan. The two families had a compromise agreement.

The Deeds of Conveyance indicate that the subject land is now under the property of private individuals. They stem from friar lands, which are government lands with titles.

In April 2001, Armando Adiao, a representative of the Cuenca heirs, filed a complaint before the LMB asking for investigation on how the land titles ended up being owned by Adelfa Properties. It turned out that the real estate company acquired the titles to the land through the heirs of Catalina Vda. De Villanueva.

The LMB said that based on available records, such as the certificate of sale and decree awarding the land, it was Adiao, representing the Cuenca family, and not the heirs of Villanueva who has ownership of the questioned property. The LMB is responsible for administering, managing and disposing of alienable and government lands not under the jurisdiction of other government agencies.

In its finding, the LMB recommended to the Office of the Solicitor General the filing of proceedings in court to cancel the Villanueva mother title and all other titles emanating from the Adelfa property.

Lawyer Mendoza, who was the in-house counsel of Adelfa Properties at the time, questioned the LMB probe, arguing that the firm was not informed that the subject property is being investigated.

Mendoza would later learn that the case was crucial in the efforts of the Villar group to settle its billions of unpaid obligations at the time. The contested land is one of the properties involved in the deal with another property firm, Ayala Land.

Layering

Backed up by what he initially thought were genuine documents, Mendoza defended Adelfa Properties’ position before the LMB. The case was one classic example of layering ownership, which is commonly employed by Villar’s group of companies, to legitimize claims.

(Click here for interactive graphic on How Villar company obtained titles to contested land)

Purportedly, the transfer certificates of titles (TCTs) of Adelfa Properties were derived from the TCT of Household Development Corp. (HDC), also part of the Villar group. HDC’s TCT, in turn, stemmed from the TCT of the heirs of a certain Manuel Villanueva.

On the other hand, the TCTs of Villanueva’s heirs derived its origin from the Villanueva patriarch and one Eugenio Villanueva. The TCTs of these two Villanueva’s for their part have its origin from the TCT on one Catalina Villanueva.

Catalina Villanueva, in turn, acquired the title from the questioned property by virtue of a deed of conveyance issued based on sales certificate issued by then Director of Lands Jose Dans in 1952.

Yet, in the original LMB probe, not one of the Villanuevas appeared during the hearing.

The 5-man committee also concluded that the Deed of Conveyance allegedly listed in Catalina Villanueva’s name does not exists, including supporting documents like friar lands sale application, investigation reports, report of bidding, sales certificate or letter of transmittal of an alleged deed of conveyance in the Register of Deeds.

“This clearly show that the Deed of Conveyance, if one has been issued, did not pass through the regular process such as filing of an application, investigation of the application between payment of the purchase price and issuance of a sales certificate and deed of conveyance, “the report stated.

Setting aside the initial findings of the 5-man LMB committee, the LMB ordered a reinvestigation. However, this time, a surveyor was tasked to conduct the probe.

In the exchange of motion and manifestations before the LMB, Adiao argued that the deed of conveyance of Catalina Villanueva was invalid.

Granting that the Villanueva title was invalid, Mendoza argued, “the fact that it has undergone several transfers to innocent purchasers has validated and consolidated the title.”

He cited a Court of Appeals ruling in 1998 where it upheld the validity of transaction of innocent purchasers who relied on the correctness of certificate of titles issued to them.

“Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued and the law will in no way oblige him to go behind the certificate to determine the condition of the property,” the CA ruling said.

Fictitious documents

SIDEBAR: Imus Estate land key to Villar-Ayala deal


MANILA, Philippines – The parcel of land in Imus Estate was crucial to Adelfa Properties and to the entire Villar Group since this was part of what was then a pending financial transaction with another property company, Ayala Land.

At that time, Villar’s real estate companies were burdened with heavy debts as a repercussion of the 1997 Asian financial crisis. Villar’s companies, including the former flagship company, Camella & Palmera Homes could not pay debts that peaked at P12.28 billion in 2001.

Villar’s companies resorted to payment-in-kind arrangement, or dacion en pago in industry parlance. They were using real estate assets to pay for the mounting obligations. READ MORE

While the legal defense was being prepared, one of Villar’s senior officers, engineer Mommar Santos, “wasted no time in talking to LMB officials on how Adelfa could secure the reversal of their previous decision in favor of Adiao,” Mendoza explained in his complaint filed at the labor department.

Santos is a known fixture and fixer at LMB, according to LMB officials interviewed by Newsbreak who requested for anonymity for fear of losing their jobs. Two of the LMB officials told Newsbreak that Santos tried to offer them bribes in relation to the Imus Estate land case.

Mendoza said he was instructed by Santos to file motion for reinvestigation. Mendoza obeyed, submitting documents provided by Santos, such as sales certificate, letter authorizing registration and letter from the Director of Lands to support Adelfa Properties’ claims.

At that time, Mendoza said he was “amazed at the resourcefulness of Mommar (Santos) because in a short time, he was able to secure the documentary evidence.”

He would later find out that the documents were fictitious, “as would be later on admitted to him by Mommar.”

In contrast with Adelfa Properties, which provided original documents, Mendoza pointed out that Adiao could not produce original documents to back up his claim.

In his labor complaint, Mendoza said (Mommar) Santos would later admit to him that the Adelfa Properties documents were all falsified with the help of LMB officials.

“The falsified sales certificate indicates the applicant-awardee as Villanueva and used dates prior to the ones existing in favor of Adiao. Worse, complainant (Mendoza) was also told that the existing documents initially found in the name of Adiao were pulled off from the records to make it appear that only the falsified records were existing,” Mendoza narrated.

The surveyor’s findings went in Villar’s favor.

P7 million settlement

LMB officials that Newsbreak interviewed could only shake their heads that a surveyor’s finding in favor of the Villar group on the Imus friar land estate could overturn that of a 5-man committee composed of lawyers.

They heard money exchange hands, but could not corroborate it with other evidence or testimony.

In documents supporting his labor complaint, Mendoza noted that concerned LMB officials received money for a favorable ruling. “Here, I witnessed the brazen power of corruption when Mommar (Santos), the senior engineer handling the case with me, immediately met with the officers at LMB, including the hearing officer to devise a way to counter the previous ruling. Upon the advise of the LMB officials, the company presented falsified mother titles, sales certificate and other documents that would establish that the title of Villanueva is validly issued when in truth it was not,” Mendoza wrote in his labor complaint.

Mendoza said he would also find out that Adiao’s heirs were paid P7 million in bribe money as settlement for the Imus Estate case. The settlement money was a drop in the bucket as it salvaged what could have been a P300 million reinstated debt of Villar to Ayala Land, Mendoza said.

It was at this point that Mendoza said he struggled internally, whether he was winning his cases or through “lakad,” or under the table negotiation.

Eventually, he had a falling out with his superiors, then he was dismissed. – With reports and additional research from Ma. Althea Teves and Purple Romero, abs-cbnnews.com/Newsbreak

How Villar built business empire with deceit, corruption: ex-lawyer

How Villar built business empire with deceit, corruption: ex-lawyer
By Aries Rufo
abs-cbnNEWS.com/Newsbreak

First of 3 Parts

MANILA, Philippines – Octogenarian Maxima Policarpio had spent most of her life in the mountains of Norzagaray, a small town in Bulacan, near the foothills of the Sierra Madre. She had hoped to spend the twilight of her life there in peace and quiet, tending a tiny vegetable garden and surrounded by fruit-bearing trees she had planted many years ago.

Related Stories:

PART 2 of 3: Villar firm faked titles through ‘layering’: ex-lawyer
SIDEBAR: The man who turned his back on Villar
PROFILE: The man who turned his back on Villar
INTERACTIVE GRAPHIC: How Villar company obtained titles to contested land
SIDEBAR: Imus Estate land key to Villar-Ayala deal

Last February, despite her age, she left the comfort of her town and braved Quezon City’s noise, pollution and confusion to join dozens of Norzagaray farmers seeking attention to the imminent loss of their ancestral lands. “I am here to protect my land. I may be old, but I still have rights.”

“We are up against an influential person,” she said.

That person is presidential aspirant and billionaire Senator Manuel Villar Jr.

Represented by a counsel, the farmers detailed how they lost their ancestral lands, in the blink of an eye, to companies connected with Villar.

They also told of harassment efforts to force them to leave their lands.

“Before, we would wake up and see all those crops pulled out from the soil. They would do it at night. We were helpless. Some of them were armed. What would you do? We would just put back the plants,” Inocencia Pascual, 67, said.

The harassment, however, stopped as the election season neared. And they knew it is only a respite. “Tapos kami pag nanalo sya (We’re finished if he wins),” Pascual said.

Contested land

Court records show that the contested land in Norzagaray is supposedly now the property of the Bangko Sentral ng Pilipinas after it was mortgaged in 2001 by two companies where Villar’s wife, Las Piñas Rep. Cynthia Villar, has a stake.

The two companies–Capitol Development Bank (now Optimum Development Bank) and Manila Brickworks–defaulted on a P1.5 billion loan it secured from BSP in April 1998 following the financial crisis that hit Asian countries. The money was allegedly spent to finance the House Speakership bid that year of Villar, who was then a congressman.

Yet, documents gathered by Newsbreak show that the two companies acquired possession of the ancestral lands through fraud and manipulative layering scheme.

It appears that the Villars brought to life the defunct Manila Brickworks out of nowhere to act as the original owner of the contested land. Fake Transfer Certificates of Titles (TCTs) were produced in connivance with the Malolos Registry of Deeds to show possession of property.

Court records in Bulacan show that Manila Brickworks was originally owned by Puyat Enterprises and had claimed possession of the property in the 70s. Poultry houses were put up by Puyat Enterprises but abandoned the area after some time.

After years of inactivity, Manila Brickworks resurfaced in 1998 with new incorporators that interlocked with those of Capitol Development Bank.

Capitol Bank, which had financial problems attributed to the financial crisis, eventually sold select assets to Yuchengco-led RCBC Savings Bank to pay off some obligations, then was renamed  Optimum Development Bank. (Initially, we reported that Capitol Bank was closed. It was not. – Eds)

In June 2001, Optimum signed a deed of real estate mortgage over the questioned property in favor of BSP to secure Capitol and Manila Brickworks’ unpaid loans.

The conveyance of land titles, coupled with fake ones, from one alleged owner to another, creates different layers that were used as an argument to legitimize property acquisition.

This has been the standard operating procedure of Villar’s lawyers and companies to acquire government and previously awarded lands, according to a lawyer formerly employed by the Nacionalista Party bet.

Pandora’s box of testimony

The man who turned his back on Villar

Lawyer Restituto Mendoza is seeking restitution for his sins of commission and omission as a former employee of Senator Manuel Villar Jr’s. housing empire.

Mendoza has filed a labor complaint before the National Labor Relations Commission (NLRC) for his alleged illegal dismissal after refusing the game that Villar’s senior officers play.

In his complaint, he wrote that he turned a blind eye and deaf ears to the mischief that his employers were getting into and how they get out of trouble. But an unexpected twist of events made him see the light.

He is waging a lonely battle against the billionaire and his senior officers.

His labor complaint is also a tell-all account on how the businesses of Villar acquired land for property development. Read more

The Norzagaray land case is just one of the many legal cases faced by Villar’s real estate empire, which was spawned by the production and sale of affordable houses.

Interviews with different sources and documents show his companies have been fending off legal disputes, mostly land grabbing cases, like the Norzagaray case.

In 2004, Villar hired Atty. Restituto Mendoza to handle problematic raw land cases for Household Development Corp., one of the firms under his real estate empire.

Mendoza has a pending complaint before the National Labor Relations Commission for illegal dismissal. Named respondents were Villar, his flagship real estate firm Vista Land and Lifescapes Inc., Casa Regalia, Adelfa Properties and lawyers and officers of the companies. Newsbreak obtained a copy of the complaint, including other documents.

In the labor case, Mendoza opened the Pandora’s box of irregularities of Villar’s businesses, practices and ethics. It was a tell-all testimony, bordering on violating the lawyer-client privilege, as he accused Villar of bribery, corruption, deceit and fraud in rebuilding his empire from bankruptcy.

Mendoza charged Villar on the ground that he is well aware of the practices of the firms’ senior officers—from paying off government officials and judges to faking titles—to skirt potential legal issues. Mendoza said Villar is a hands-on manager, supposedly even concerned about where to put trash cans in the subdivision projects.

Newsbreak sought to corroborate Mendoza’s serious allegations, which included duping another land developer, Ayala Land, and an alleged attempt to bribe Customs officials to release an undervalued crane imported by his company, MGS Corp. (Details in Part 3 of the series, to be published on April 14.) We found some corroborative documents and information to back up Mendoza’s claims.

Ayala Land, which got questionable titles as in exchange for a previous P300 million loan from a Villar firm, has yet to reply to our query as of this posting. (Read: Imus Estate land key to Villar-Ayala deal)

Customs officials, on the other hand, provided data of the botched importation. (Details in Part 3)

Violation of lawyer-client relationship

Villar’s chief legal officer, Ma. Nalen Rosero-Galang, who has been countering the land grabbing complaints hurled against Villar since the campaign began, dismissed Mendoza’s stories and narration as “all lies.” In an interview with Newsbreak, Galang said she is “shocked of Mendoza’s allegations.”

Galang pointed out that Mendoza took five years to come out and expose the unethical practices of Villar’s businesses.

“I would have wanted to ignore him so as not to dignify his claims,” Galang said in an interview. Besides, she added that Mendoza’s claims would not have been admissible in court since “it violates the lawyer-client relationship.”

“Actually I pity him, since no one would want to hire him as a lawyer after this,” she added.

We also sought to interview Mendoza, but he begged off, saying his complaint would suffice. Mendoza was dismissed in May last year and filed his complaint in August.

The C-5 controversy

In his complaint, Mendoza mentioned some of the properties that benefitted from the controversial C5 road extenstion project. The road traversed through 50-52 hectares of Villar’s property holdings.

Villar’s peers in the Senate conducted ethics committee hearings. In a report, the senators found Villar guilty of conflict of interest when he supposedly benefited from the P6.96 billion road project. A public works feasibility study stated that Villar conceived and funded the project.

Mendoza provided the context in the arrangement between two real estate properties associated with Villar. Masaito Development Corp and Adelfa Properties supposedly swapped properties affected by the C5 road extension.

Based on documents submitted by Mendoza to the NLRC, it was Villar’s Adelfa Properties that initiated the arrangement with Masaito. Adelfa then claimed the bulk of expropriation proceeds from the Masaito property.

The agreement stated Masaito would only get only P7 million while Adelfa would get the remainder, amounting to P15 million.

A total of P168.1 million was paid by the government for the right of way involving Villar’s properties while only P22 million for non-Villar properties.

And yet, based on Mendoza’s claims on the Masaito agreement, through careful planning and foresight, Villar even got proceeds from his supposed non-properties.

Why would Masaito agree to swap properties with Adelfa if it would be paid for the right of way anyway? Was government informed about the swap or was there an attempt to cloak it through internal arrangement?

Internal arrangement

A source familiar with the case said that Villar’s senior officers had anticipated the road extension would pass through the Masaito properties. The properties were raw lands at that time and would have commanded low zonal valuation.

Yet, through connections in the DPWH and the Bureau of Internal Revenue, the Masaito property was valued at P30,000 per square meter, a “unique” situation that Adriano told the Senate since it was the only property that commanded that high price.

In the Senate probe, former revenue district officer Carmelita Bacod admitted that the valuation was “grossly disadvantageous to the government.”

The source explained that Masaito knew it would only get a lower zonal valuation and thus, lower payment for its properties, if only government would have its way. Entering into an agreement would be a win-win situation for both Adelfa and Masaito—the former gets a portion of the right of way payment without essentially losing with its property while the latter gets the bulk of the proceeds.

To facilitate the agreement, Masaito and Adelfa signed a memorandum of undertaking (MOU) where they agreed to open a joint bank account at the Landbank where expropriation proceeds would be deposited. Adelfa president Jerry Navarette and Masaito president Joseph Wang would be the joint signatories.

After the first tranche of P22 million has been deposited, of which P7 million would given to Masaito, Adelfa would assume “sole right” of the remainder of the proceeds, the MOU stated. Navarrete would then be the sole signatory of the Landbank account.

Mendoza said it was the C5 controversy that shattered his respect of Villar. He recalled that he was the one who drafted the Masaito agreement upon hearing Senator Jamby Madrigal mentioning the company. “Evidently, Senator Villar was not telling the truth when he had been consistently denying in public that he and his companies never received a single centavo from the C-5 road extension project,” Mendoza said.

In drafting the Masaito-Adelfa agreement, Mendoza said he “unknowingly had been an instrument of corruption in what is now the C5 road scandal.”

In his Feb. 2 speech before the Senate to rebut the ethics, Villar maintained that he did not financially benefit from the C5 project. “Wala po akong ninakaw sa kaban ng bayan. Wala po akong kasalanan, wala pong anomalya sa C5 project at hindi po ako nakinabang,” Villar said. – With reports and additional research from Althea Teves and Purple Romero, abs-cbnnews.com/Newsbreak