MANILA, Philippines — The Supreme Court (SC) Second Division has affirmed the conviction of a former bank manager for his role in a fraudulent scheme that siphoned over PHP 2 million from the local government of Meycauayan, Bulacan. In a Decision promulgated on May 19, 2025, and penned by Associate Justice Antonio T. Kho, Jr., the Court upheld the graft conviction of Alberto V. Reyes while modifying his other charges from estafa to the more serious crime of malversation of public funds through falsification of public documents.
Altered Checks and ‘Red Flags’
The case involved nine criminal charges against Reyes, the former branch manager of Philippine Business Bank (PBB) in Meycauayan, and his co-accused, Ma. Victoria Z. Atienza, the former City Accountant of Meycauayan. Atienza remains at large.
The prosecution established that between July and October 2007, the Meycauayan local government unit (LGU) issued checks for valid obligations to various individuals and entities. Atienza would instruct the original payees to return the checks to her office for “encashment.” Once she had the checks, she would materially alter them—changing the payees and significantly increasing the amounts.
Reyes, acting as the PBB branch manager, facilitated the “rediscounting” of these altered checks. The Court noted that the alterations were glaringly obvious; for instance, the original entries were written in black ink, while the fraudulent changes were made in red ink. Despite these “red flags” and strict Bangko Sentral ng Pilipinas (BSP) regulations regarding second-indorsed checks, Reyes processed the transactions. This allowed Atienza to receive the inflated cash amounts, which were eventually cleared by the drawee bank on the strength of her official “Accountant’s Advice.”
From Estafa to Malversation
While the Sandiganbayan originally convicted Reyes of estafa through falsification of public documents, the Supreme Court modified this finding. The High Tribunal explained that since the funds involved were public in character and the primary perpetrator (Atienza) was an accountable public officer, the crime committed was Malversation, not Estafa.
The Court clarified that the distinction lies in the nature of the property: Estafa involves the misappropriation of private property, whereas Malversation involves public funds for which a public officer is accountable by reason of their office. Furthermore, the Court ruled that even though Reyes is a private individual, his conspiracy with a public official renders him equally liable for the crimes.
Bad Faith and Gross Negligence
The Supreme Court found that Reyes acted with “evident bad faith” and “gross inexcusable negligence.” As a bank manager, Reyes had a duty to scrutinize the genuineness of the checks, especially given the blatant material alterations. The Court pointed out that Reyes had a personal interest in the transactions, as they helped him meet his bank quotas, and he reportedly received gratuities from the “financiers” who accepted the rediscounted checks.
By acting as a “middleman or conduit” for Atienza, Reyes enabled the misappropriation of PHP 2,006,218.00 in government funds. The Court emphasized that his failure to follow banking protocols regarding second-indorsed checks was not merely a mistake but a willful breach of duty.
Sentencing and Civil Liability
For the violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (RA 3019), Reyes was sentenced to an indeterminate period of six years and one day to eight years of imprisonment, along with perpetual disqualification from public office. He was also ordered to indemnify the government the full amount of the undue injury caused, plus 6% legal interest.
For the seven counts of Malversation of Public Funds through Falsification of Public Documents, Reyes was sentenced to six years to 12 years of imprisonment for each count, along with a fine of PHP 1,000,000.00 per count.
The ruling serves as a stern warning to both public officials and private individuals in the financial sector that conspiracy in the misuse of government funds carries severe legal consequences. The Supreme Court underscored that the power of inquiry and audit by the Commission on Audit (COA) is vital in uncovering such schemes, and those who facilitate the plunder of the public treasury will be held fully accountable under the most appropriate penal laws.
