THE Sandiganbayan has denied a motion from defendant businessman Ernest Escaler seeking the disqualification of the Office of the Special Prosecutor (OSP) and expunging from the records all pleadings and documents filed by it in relation to the $2 million ill-gotten wealth case.
Escaler is a co-defendant of former Justice Secretary Hernando “Nani” Perez in the 2014 case for the forfeiture of $2 million undeclared cash in a bank allegedly extorted by the respondents from former Manila Rep. Mario Crespo, alias Mark Jimenez, in 2001 in exchange for his exclusion in a criminal investigation for plunder involving former President Joseph Estrada.
Government lawyers said the money was moved around in various transactions through the Trade and Commerce Bank in Cayman Islands to the Coutts Bank in Hong Kong in February 23, 2001; the EFG Private Bank in Singapore on March 6, 2001; the Standard Chartered Bank in New York, USA to Escaler’s Coutt’s Bank, HK account on May 16, 2001; and smaller cash transfers through a bank draft for $250,000 issued to Arceo, $200,000 transferred to Escaler’s account in Citibank, Manila, and $700,000 transferred to EFG Private Bank, Singapore – all three happening on May 23, 2001.
However, Ombudsman investigators said copies of Perez’s Statements of Assets, Liabilities, and Net Worth (SALNs) did not disclose financial interests of $1.7 million as he declared total assets of only P40.305 million in 2001 and P40.279 million in 2002.
Since the $1.7 million in the EFG Private Bank AG account of Perez and his wife was not declared, the Office of the Ombudsman found the sum to be “manifestly out of proportion to his salary as public officer and to his other lawful income.”
It likewise filed a petition asking the Sandiganbayan to forfeit the bank deposits and other sums from Escaler and Arceo totaling $2 million in favor of the government.
Despite pendency in court for more than a decade, Escaler moved to disqualify the OSP, claiming that under Republic Act No. 6770, it is solely the Office of the Ombudsman that has the power to prosecute cases and that the OSP is under its control.
He said the OSP exercised the power it never had in filing and prosecuting the forfeiture case.
The OSP countered that it has always represented the Republic in other forfeiture cases and has been handling the Perez case for 10 years without any question being raised.
It pointed out that it is an organic component of the Office of the Ombudsman assigned to prosecute cases, criminal or otherwise, at the Sandiganbayan.
In its resolution dated March 7, 2025, the Sandiganbayan Third Division ruled that the forfeiture case and the representation of the OSP as counsel for the state are both valid.
The ruling was penned by Associate Justice Ronald B. Moreno, with Associate Justices Karl B. Miranda and Bernelito R. Fernandez concurring.
The court noted that for all ill-gotten wealth cases before February 25, 1986, it was the Office of the Solicitor General that was supposed to file the petitions.
“It is undisputed that this case for forfeiture of unlawfully acquired properties under R.A. No. 1379 against respondents Hernando Perez, et al. was instituted by the Office of the Ombudsman on behalf of the Republic of the Philippines, and not by the OSP. Hence, there was no violation as regards the filing of the petition,” the anti-graft court said.
It clarified that the OSP is not only vested with the power to conduct preliminary investigations and prosecute criminal cases before the Sandiganbayan, but it may likewise enter into plea bargaining agreements and perform other duties assigned to it by the Ombudsman.
“The effective discharge of the OSP’s duty and power to investigate and prosecute criminal cases within the jurisdiction of the Sandiganbayan carries with it the duty to pursue all legal means in connection with its investigation and prosecution,” the court added.
