Court of Appeals Freezes Bank Accounts, Insurance Policies Linked to Flood-Control Fund Diversion

The Court of Appeals has issued a freeze order on 135 bank accounts and 27 insurance policies connected to public works officials and contractors suspected of embezzling funds from flood-control projects. This measure, requested by the Anti-Money Laundering Council (AMLC), aims to prevent the withdrawal or transfer of funds under investigation as authorities prepare criminal and civil charges.

"This represents a crucial step toward pursuing both civil and criminal actions, including money laundering and civil forfeiture," said AMLC executive director Matthew David, who highlighted initial findings pointing to a laundering operation involving billions of pesos in public money.

The freeze follows a complaint filed on September 12 by the Department of Public Works and Highways (DPWH) with the Office of the Ombudsman. The complaint names 20 DPWH personnel and six private contractors accused of conspiring to divert project funds.

"The banks holding accounts of the individuals identified in the initial complaint have been instructed to freeze these assets. This is a significant move to ensure accountability and recover public funds," stated Public Works Secretary Vince Dizon, who estimated the alleged irregularities could amount to hundreds of billions of pesos.

Those affected by the asset freeze include former DPWH officials Henry Alcantara (assistant regional director), Brice Ericson Hernandez (district engineer), Jaypee Mendoza (assistant district engineer), and John Michael Ramos (chief of the Construction Section). Others include Ernesto Galang (Planning and Design), Lorenzo Pagtalunan (OIC–chief of Maintenance), Norberto Santos (Quality Assurance and Hydrology), Jaime Hernandez (Maintenance), Floralyn Simbulan (Administrative Section), Juanito Mendoza (Finance), Roberto Roque (Budget), Benedict Matawaran (Procurement), Christina Mae Pineda (cashier), along with project engineers Paul Jayson Duya, Merg Jaron Laus, Lemuel Ephraim Roque, Arjay Domasig, John Carlo Rivera, John Benex Francisco, and Jolo Mari Tayao.

Private contractors with frozen assets include Cezarah Rowena Discaya, Pacifico Discaya II, and Ma. Roma Angeline Rimando from St. Timothy Construction Corp.; Mark Allan Arevalo, general manager of Wawao Builders; Sally Santos, owner of SYMS Construction Trading; and Robert Imperio, owner of IM Construction Corp.

In parallel, the Bangko Sentral ng Pilipinas (BSP) has initiated its own investigation under the recently enacted Anti-Financial Account Scamming Act (AFASA), marking its first use of the law.

"This is the inaugural application of AFASA," BSP general counsel Roberto Figueroa confirmed. "The legislation empowers us to examine financial accounts suspected of involvement in money-muling without first obtaining a court order."

Money-muling, defined as using financial accounts to transfer criminal proceeds, carries penalties including six to eight years of imprisonment, fines ranging from P100,000 to P500,000, and possible civil liabilities including asset forfeiture.

Secretary Dizon emphasized, "This is merely the initial phase. We anticipate additional asset freeze requests in the weeks and months ahead."

Matthew David reaffirmed the AMLC's commitment to work closely with the Solicitor General, DPWH, BSP, and other relevant agencies to safeguard public funds and ensure justice is served.