Attorney Disbarred for Investment Scam, Bounced Checks, and Ethical Violations Under the CPRA

A.C. No. 13757, October 22, 2024

Imagine entrusting your life savings to a lawyer, believing their professional status guarantees integrity. Then, the investment turns out to be a scam, and the checks they issued bounce. This scenario became a harsh reality for Abigail Sumeg-ang Changat, Darwin Del Rosario, and Pauline Sumeg-ang, leading them to file an administrative complaint against Atty. Vera Joy Ban-eg. The Supreme Court’s decision in this case underscores the strict ethical standards demanded of lawyers, both in their professional and private dealings, and serves as a stern warning against misconduct. The case also helpfully elucidates the application of the penalty framework of the Code of Professional Responsibility and Accountability (CPRA) for the first time.

Ethical Duties of Lawyers Under the CPRA

The legal profession demands the highest standards of morality, honesty, and fair dealing. The Code of Professional Responsibility and Accountability (CPRA) emphasizes that lawyers must act ethically in all aspects of their lives. Canon II of the CPRA is particularly relevant, mandating that lawyers must maintain propriety and the appearance of propriety in both personal and professional conduct.

Specifically, Section 1 of Canon II prohibits lawyers from engaging in “unlawful, dishonest, immoral, or deceitful conduct.” Section 2 further requires dignified conduct, including respect for the law, courts, and other government agencies. Violations of these standards can lead to severe disciplinary actions, including suspension or disbarment.

Issuing bouncing checks, as in this case, directly violates these ethical duties. Batas Pambansa Blg. 22, the Bouncing Checks Law, makes it illegal to issue checks without sufficient funds. Such actions reflect a lack of personal honesty and good moral character, undermining public confidence in the legal profession.

In addition, Section 11 of Canon II obligates lawyers not to make false representations, with liability for any material damage caused by such misrepresentations.

Key Provisions:

• Canon II, Section 1: “A lawyer shall not engage in unlawful, dishonest, immoral, or deceitful conduct.”
• Canon II, Section 2: “A lawyer shall not engage in conduct that adversely reflects on one’s fitness to practice law, nor behave in a scandalous manner, whether in public or private life, to the discredit of the legal profession.”

The Investment Scheme and Subsequent Complaint

The complainants alleged that Atty. Ban-eg operated an investment house called Abundance International, promising investors they could double their money in three months. Enticed by these representations and Atty. Ban-eg’s status as a lawyer, the complainants invested significant sums. Darwin Del Rosario invested PHP 1,000,000.00, Pauline Sumeg-ang invested PHP 300,000, and Abigail Sumeg-ang Changat invested PHP 400,000. When the checks issued by Atty. Ban-eg to secure these investments bounced due to a closed account, the complainants realized they had been defrauded.

Further investigation revealed that Abundance International was not registered with the Securities and Exchange Commission (SEC), and Atty. Ban-eg was not a registered broker. This led the complainants to file a joint affidavit-complaint with the Integrated Bar of the Philippines (IBP), alleging violations of the Code of Professional Responsibility.

The procedural journey included:

• Filing of the complaint with the IBP.
• IBP ordering Atty. Ban-eg to submit an answer.
• Multiple attempts to serve the order, complicated by Atty. Ban-eg’s change of address.
• Mandatory conference proceedings, which the parties failed to attend.
• Submission of the case for report and recommendation due to the parties’ failure to submit position papers.

The IBP Commission on Bar Discipline (IBP-CBD) recommended a two-year suspension for Atty. Ban-eg, finding her guilty of issuing dishonored checks and disregarding legal processes. The IBP Board of Governors adopted this recommendation, adding a fine of PHP 15,000.00 for her failure to file her answer, mandatory conference brief, and position paper.

Key Quotes from the Court:

• “The practice of law is not a right but merely a privilege bestowed by the State upon those who show that they possess, and continue to possess, the qualifications required by law for the conferment of such privilege.”
• “A high sense of morality, honesty and fair dealing is expected and required of members of the bar. They must conduct themselves with great propriety, and their behavior must be beyond reproach anywhere and at all times.”

Disbarment, Fines, and Future Implications

The Supreme Court adopted the IBP’s findings but increased the penalty to disbarment. The Court emphasized Atty. Ban-eg’s violation of Canon II, Sections 1 and 2 of the CPRA for issuing dishonored checks, and Sections 1 and 11 for misrepresenting Abundance International’s capacity to operate as an investment house.

This case underscores the importance of due diligence when investing, even when dealing with professionals like lawyers. It also highlights the severe consequences for lawyers who engage in dishonest or deceitful conduct, regardless of whether it occurs in their professional or private capacity.

Key Lessons:

• Lawyers are held to a high ethical standard, both professionally and personally.
• Issuing bouncing checks and making false representations can lead to severe disciplinary actions.
• The CPRA provides a structured framework for determining penalties for attorney misconduct.
• Always conduct thorough due diligence before investing, regardless of the other party’s professional status.

Frequently Asked Questions

Q: What is the Code of Professional Responsibility and Accountability (CPRA)?

A: The CPRA is a set of ethical rules governing the conduct of lawyers in the Philippines, effective May 30, 2023. It outlines the standards of behavior expected of lawyers in their professional and personal lives.

Q: What are the penalties for violating the CPRA?

A: Penalties range from fines, censure, and reprimand for light offenses to suspension and disbarment for serious offenses.

Q: What should I do if I believe my lawyer has acted unethically?

A: You can file a complaint with the Integrated Bar of the Philippines (IBP), which will investigate the matter and recommend appropriate disciplinary action.

Q: Does this case mean I can automatically recover my investment losses from Atty. Ban-eg?

A: Not automatically. The administrative case is separate from any civil or criminal cases you might file to recover your losses. You would need to pursue those avenues separately.

Q: What is the significance of the SEC certification in this case?

A: The SEC certification proved that Abundance International was not a registered corporation and that Atty. Ban-eg was not a registered broker, supporting the claim of misrepresentation.

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