PolEco: The mother of all scams: Napoles' P10-B scam (from the Inquirer News website) (2nd of a series)

‘I am not involved in any scam’

By Nancy C. Carvajal
Philippine Daily Inquirer

2:23 am | Saturday, July 13th, 2013

 

‘IT’S CLEARLY ABSURD’ Napoles: Modesty aside, given our financial and social status, it’s clearly absurd for us to commit the crime charged and even alleged to engage in such an activity… for what benefit can we gain? INQUIRER PHOTO

Janet Lim-Napoles, who first appeared on the radar screen of whistle-blowers in 2001, has dismissed as a “product of lies,” allegations she engineered a P10-billion scam over the past decade using mainly pork barrel funds of senators and congressmen for ghost projects.
In an affidavit prepared by the MOST law firm, the 49-year-old trader said she and her company, JLN Corp., had “never transacted business or closed deals with the government or any of its agencies or instrumentalities.”
“I certainly was not involved in any of the high-profile scams which occurred during the previous administration,” she said in the document prepared by MOST, which stands for the first letter of the last names of the law firm’s lead partners—Lisa Araneta Marcos, wife of Sen. Ferdinand “Bongbong” Marcos Jr., Executive Secretary Paquito Ochoa, Edward Serapio and Joseph Tan. Ochoa is on leave from the firm.
 
Letter to Aquino
Napoles also wrote a letter to President Benigno Aquino III dated April 17 saying the charges against her and her family were “false, fabricated, and a mere product of lies” perpetrated by business competitors conspiring with “corrupt agents” of the National Bureau of Investigation “with the ulterior motive of besmirching our reputation.”
The following day, April 18, the NBI received a directive from Justice Secretary Leila de Lima to investigate the allegations contained in Napoles’ letter to the President.
In the affidavit, Napoles denied claims by Benhur K. Luy, 31, a distant cousin and her personal assistant in JLN Corp., that she had ordered his kidnapping last Dec. 19  after she reportedly learned that he wanted to engage in the same racket she was in.
On March 22, Luy was rescued by a special task force of NBI agents led by Rolando Argabioso, a regional director, from a condominium unit owned by Napoles in the South Wings Gardens of Pacific Plaza Tower at Bonifacio Global City.
Luy then proceeded to execute affidavits, joined by five other whistle-blowers, outlining the alleged scams Napoles had undertaken, purportedly using funds from the lawmakers’ priority development assistance funds (PDAF), or pork barrel, and various government entities, for ghost projects executed by several dozen bogus contractors the past 10 years.
Napoles, the president and CEO of JLN Corp., said Luy was never detained. She said her brother was always with Luy and that at the end of the day, Luy was accompanied to Bahay San Jose, a dormitory used by priests and nuns, where he stayed for the night throughout the supposed kidnapping ordeal.
She said “unscrupulous individuals, in cohorts (sic) with some ‘corrupt’ agents of the NBI,” were subjecting her and her family to “continuous threats, intimidation, and even physical harm.” She said the NBI special team, without an arrest warrant, detained her brother Reynald Lim.
Alleged extortion attempts
The NBI prepared kidnapping charges against Napoles and her brother, Reynald Lim, but these were dropped for lack of probable cause by Assistant State Prosecutor Pedro Navera on June 10.
Napoles said Luy’s lawyer, Levito Baligod, had allegedly demanded P38 million from her to drop the kidnapping charges, later raising this to P250 million to P300 million, and asking a Canadian visa for Luy and his family, pocket money of $1.5 million for the travelers and another P30 million for a pharmaceutical business of his sister to be left behind.
“Modesty aside, given our financial and social stature, it is clearly absurd for us to commit the crime charged or even attempt to engage in such an activity. There is absolutely no reason for us to do such criminal acts for what benefit can we gain therefrom? Such an accusation is truly illogical and unbelievable,” she said in her letter to Aquino.
“We are decent law abiding citizens all our lives. We are not kidnappers; we are not criminals. My family and I are legitimate businessmen. We have been engaged in the business for the past 29 years, and the main reason for our success is because of the trust and integrity attached to our good name,” she said.
In an interview with the Inquirer, Baligod shrugged off Napoles’ accusation of extortion and said it was Reynald Lim’s lawyer, Freddie Villamor, who offered him P5 million in exchange for dropping the kidnapping case filed by Luy’s family against the siblings. “The offer was made in the morning after Benhur was rescued by the NBI,” Baligod said.
“JLN Corp. has never transacted business or closed deals with the government or any of its agencies or instrumentalities, much less the government offices which Benhur mentioned, and those enumerated by Arturo, Gertrudes, Arthur and Annabelle … in their joint sworn statement,” Napoles said, referring to the other whistle-blowers who sought to corroborate Luy’s accusations.
High-profile scams
“I certainly was not involved in any of the high-profile scams which occurred during the previous administration. In fact, I found out in news reports that the Sandiganbayan issued a resolution clearing the suspects in the (Joc-joc Bolante) fertilizer scam. My name or JLN Corp. was not even mentioned in the said resolution clearing the suspects in the fertilizer scam.
“My name or JLN Corp. was not even mentioned in said resolution, proving that I and my business outfit are not involved in said scam,” Napoles said in her affidavit.
She said that Luy concocted the supposed kidnapping after she confronted him about a claim that he had secured an unauthorized loan for the company of P5 million and that he pocketed P300,000 she had asked him to deposit in the bank.
Since 2001
In 2001, Napoles and her husband, retired Army Maj. Jaime Napoles, were among 18 personnel of the Navy Marine Corps and civilians, charged by the Office of Ombudsman in the Sandiganbayan with graft and malversation in connection with the acquisition of substandard Kevlar helmets worth P3.8 million.
Seven years later, Napoles was called in the investigation conducted by the Senate blue ribbon committee on the P728-million fertilizer scam involving then Agriculture Undersecretary Jocelyn “Joc-joc” Bolante. The inquisitors extracted from her statements that she had formed dummy companies to launder the funds of the Department of Agriculture. Curiously, no charges were officially filed against her.

PolEco: The mother of all scams: Napoles' P10-B scam (from the Inquirer News website) (1st of a series)

NBI probes P10-B scam

Pork, gov’t funds used in ghost projects

By Nancy C. Carvajal
Philippine Daily Inquirer

12:01 am | Friday, July 12th, 2013 

 

P10-B SCAM SUSPECT Janet Lim Napoles on a magic carpet ride in April last year on her 30th wedding anniversary with an Indian motif and Bollywood-style hoopla. INQUIRER PHOTO

(First of a series)

The National Bureau of Investigation is looking into allegations that the government has been defrauded of some P10 billion over the past 10 years by a syndicate using funds from the pork barrel of lawmakers and various government agencies for scores of ghost projects.
Described by an NBI investigator as the “mother of all scams,” the con game came to light in March following the kidnapping—and subsequent rescue—of an employee of a trading company, JLN Corp., which was purportedly behind the scheme, according to sworn affidavits and interviews conducted by the Inquirer.
JLN stands for Janet Lim Napoles, who has been identified as the alleged brains behind the racket. She runs the company with her brother, Reynald “Jojo” Lim.
The sworn affidavits—prepared by six whistle-blowers with the assistance of their lawyer, Levito Baligod, and submitted to the NBI—stated that JLN Corp., with offices on the 25th floor of Discovery Suites in Ortigas Center in Pasig City, had defrauded the government of billions of pesos in ghost projects involving the creation of at least 20 bogus nongovernment organizations. These NGOs were supposedly the ultimate recipients of the state funds, but the money went to Napoles, according to the affidavits of the six whistle-blowers.
All six were interviewed by the Inquirer, which also secured copies of their sworn statements. The extent of the swindling brought tears to one NBI agent in an interview.
The kidnap victim, Benhur K. Luy, the principal witness to the scam, was rescued by a special task force headed by Rolando Argabioso, assistant NBI regional director, on March 22 from a condominium unit in the South Wings Gardens of Pacific Plaza Tower in Bonifacio Global City.
Kidnapping charges were brought by the NBI against Napoles and Lim, but these were subsequently dropped purportedly for “lack of probable cause.” Lim was arrested and briefly detained. Napoles issued an affidavit denying involvement in the abduction.
Since then, the 31-year-old Luy, Napoles’ cousin and personal assistant in JLN Corp., has executed affidavits detailing his abduction and the reasons why he was kidnapped. In one signed statement, he said he was accused by Napoles of striking out on his own concocting illegal deals, without her knowledge, copying schemes from his cousin’s operations.
Five others who had worked in JLN Corp. have come out to corroborate the account of Luy, detailing the activities of Napoles. One of them was a project coordinator and another was a nanny who was made president of a dummy NGO. The rest were clerks and support staff.
Joc-joc scam probe
The 49-year-old Napoles was summoned to the investigation conducted in 2008 by the Senate blue ribbon committee on the P728-million fertilizer scandal involving then Agriculture Undersecretary Jocelyn “Joc-joc” Bolante. She then testified she had used dummy companies in that scheme but no charges have so far been brought against her in connection with that case.
The sources of funding for the supposed projects, ostensibly meant largely to benefit poor farmers through provisions of fertilizers and farm equipment and implements, came from the priority development assistance funds (PDAF), or pork barrel, of three senators and 11 members of the House of Representatives.
Also tapped by the syndicate were the Malampaya oil fund and allocations by the Department of Budget and Management for the Technology Resource Corp. (formerly the Technology and Livelihood Resource Corp.), National Livelihood Development Corp. and National Agri-Business Corp., Department of Agriculture and Department of Agrarian Reform.
 
Lawmakers’ commissions
The whistle-blowers said JLN Corp. was able to carry on the swindle through Napoles’ vast network and connections.
“JLN offered to lawmakers commissions equivalent to 40 to 60 percent of the amount of PDAF in exchange for the right to determine the implementing agency and fund beneficiary,” according to Luy.
“Apart from senators and congressmen, Madame Janet has also connections in almost all branches of government, friends in the right places, and lawyers who do her bidding,” he told the Inquirer in an interview.
Luy, who has a ready smile and sports a white side wall haircut, said he began working for his cousins in September 2002. Over the past decade, he said he had gained intimate knowledge of their operations, how they manufactured receipts, forged signatures of local government officials, fabricated names of beneficiaries of the state funds.
He said he had planned to put up his own business and establish his own network similar to his cousins’. But before he could go on his own, Napoles learned of his plan and locked him up first in the JLN office on Dec. 19, 2012, before he was later taken to the condominium.
The NBI team rescued Luy on the evening of March 22 on orders of Justice Secretary Leila de Lima and NBI Director Nonnatus Rojas following a complaint for abduction lodged by Baligod in the Department of Justice.
Money in bathtub
In his letter to De Lima, Baligod stated that Luy was detained by the siblings “to ensure that nobody can directly implicate them with the issues on the fertilizer scam, Malampaya scam and anomalies in the implementation of several PDAF-funded projects.”
In his sworn affidavit to the NBI, Luy said he opened accounts in various banks, including the Air Materiel Wing Savings and Loans Association, and deposited and withdrew money for Napoles.
“The accounts and transactions were in the tens of millions of pesos and all of these were remitted to Madame Janet,” Luy told the Inquirer.
He said that cash withdrawn from the banks were placed in luggage strollers and duffel bags and taken to Napoles in her office or her condominium unit in 18-B North Tower of Pacific Plaza in Taguig City
“These bags were piled in the master bedroom and in the bathtub of her bathroom,” he said.
(Part 2 on Saturday: Napoles’ denials)