Philippine Daily Inquirer: Refiled tax credit scam cases designed to fail, says witness: “Shell had cases filed against it, but it was a mere transferee, or buyer of fraudulent tax credit certificates sold by the Chingkoe group.” (ShellNews.net)

Michelle V. Remo

Aug 30, 2004

A KEY witness to the country's biggest tax credit scam has scored the way the Bureau of Customs, already battered by accusations of deliberately bungling the prosecution of tax credit fraud cases, is currently handling the cases it refiled which could lead to another round of case dismissals.

Felix Chingkoe, a witness to the multibillion-peso tax credit scam involving the Chingkoe group of companies owned by his brother Faustino Chingkoe, said the government could not expect to get justice in the tax fraud cases with the kind of prosecution initiated by the BOC's collection team.

"I believe the bungling of the cases is intentional... Wrong addresses, wrong or dead respondents, incomplete data and information. What else can we expect from these cases (but dismissal)," said Felix.

Felix was referring to the data used by the BOC's collection team, headed by Deputy Commissioner Gil Valera, in refiling the dismissed tax credit fraud cases which involved about P2 billion in lost revenues for the government.

He said the wrong and incomplete information on the refiled cases against the Chingkoe group of companies showed lack of seriousness on the part of the BOC to successfully prosecute the suspects in the tax credit scam.

The BOC has refiled with the Court of Tax Appeals the 14 tax credit fraud cases that were earlier dismissed by the Manila Regional Trial Court.

The cases involved the following companies: Master Color System, Integrated Multi-Cotton Mills, Nikko Textile Mills, Express Colour Industries, FLB International Fiber Inc., Tex Asia Inc., Kultura Knitex, Fiber Technology Corp., AR Packaging Corp., Kultura Knitex and Pilipinas Shell Petroleum Corp. Shell had cases filed against it, but it was a mere transferee, or buyer of fraudulent tax credit certificates sold by the Chingkoe group.

Valera had denied that the dismissals were caused by "lack of interest to prosecute" as earlier reported, but were due to technical reasons, such as the failure of the court's summons to reach the respondents because of fictitious addresses.

But Felix Chingkoe noted that because of the perceived lack of effort by the BOC to rectify the failures of prosecution in the past, the cases would hardly prosper.

He noted that in the case against Integrated Multi-Cotton Mills, which was refiled with the CTA, the BOC tagged the wrong people as respondents. The respondents named in the case-Hernando Lagera, Victorino Gallana, Carmencita Camara and Tan Po Chu and himself-were not connected with Integrated. These people, including himself, used to work for the Chingkoe group of companies, but Integrated was not a member of the group, Felix explained.

According to Inquirer sources, Integrated was owned by the Tan family, headed by its matriarch Genoveva. It includes her two sons Melchor and Julio, and Julio's wife Blanquita.

The Tan family allegedly accounted for the second-biggest tax scam in the country after that of the Chingkoe couple Faustino and Gloria.

On the cases refiled against Express Colour Industries, Fiber Technology and FLB International Fiber Corp., all owned by Faustino and Gloria Chingkoe, Felix said the BOC again tagged the wrong respondents.

Instead of naming the Chingkoe couple as respondents, the BOC named people who used to work with the Chingkoe group but were either dead or had nothing to do with the companies' use of tax credits.

According to documents obtained by the Inquirer, the respondents in the cases included Vianita Acilo, Luningning Lamson, Hernando Lagera and Victorino Gallana.

Acilo is the wife of Faustino's personal driver, while Lamson was only a nominee to the companies' board. Felix said that Lagera and Gallana had nothing to do with the tax credit scam. Lagera is dead while Gallana had left for Canada.

It was only in the case against Master Colour System Inc. that the prosecutors named Faustino Chingkoe as a respondent. The prosecutors, however, used a wrong address for Faustino of Doneza St., Valenzuela, Metro Manila, in its complaint instead of the correct address of Corinthian Gardens, Quezon City.

"They gave the CTA the wrong address so the summons will be sent and will not be served again," said Felix Chingkoe.

Felix, who was granted immunity for turning state witness in the tax credit cases, likewise questioned his inclusion in two of the cases, branding the move as an act of "pure harassment."

In response to the accusation he deliberately bungled the cases, Valera earlier denied doing so in exchange for favors.

"I am not guilty of what they are accusing me because if I were so, I should not be coming out in the open, and should not have initiated the refiling of the cases," he had earlier said.