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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.

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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