In Alex Sulit y Trinidad v. People of the Philippines, the Supreme Court affirmed the conviction of Alex Sulit for estafa, highlighting the importance of proving conspiracy in investment fraud cases. The Court emphasized that even if a person’s direct participation in the initial fraudulent act is not evident, their subsequent actions indicating a common design to deceive investors can establish liability through conspiracy. This ruling clarifies the extent of responsibility individuals bear when involved in fraudulent investment schemes.

When a ‘Mere Presence’ Becomes a Conspiracy: The Valbury Assets Estafa

The case revolves around the operations of Valbury Assets Ltd., an unregistered company engaged in foreign currency trading. Alex Sulit, serving as the Marketing Director, along with Edgar Santias and George Gan, enticed several individuals to invest in Valbury with promises of high returns. Caridad Bueno, Ma. Lita Bonsol, and Gregoria Ilot, the private complainants, invested substantial amounts, only to discover that Valbury was not authorized to conduct such business, and their investments were lost. The central legal question is whether Sulit’s involvement, including his presence during key transactions and his encouragement for further investments, constituted conspiracy, thus making him liable for estafa under Philippine law.

The prosecution presented evidence showing that Sulit actively participated in the fraudulent scheme. He, along with Santias and Gan, misrepresented Valbury as a legitimate investment firm. They assured investors of guaranteed profits and easy withdrawals, which proved false. The complainants testified that Sulit was present during meetings, endorsed fraudulent transactions, and even received marked money from the National Bureau of Investigation (NBI) intended as an additional investment. These actions, viewed collectively, demonstrated a clear intent to deceive the investors, thereby establishing conspiracy.

The defense argued that Sulit’s ‘mere presence’ during the transactions did not necessarily imply conspiracy. However, the Court rejected this argument, emphasizing that once conspiracy is established, the act of one conspirator is the act of all. The critical factor was that Sulit’s actions were not isolated incidents but part of a coordinated effort to defraud the complainants. The court cited People of the Philippines v. Jesalva, stating,

“Once conspiracy is shown, the act of one is the act of all the conspirators.”

The evidence indicated a common objective among Sulit, Santias, and Gan, which was to induce the private complainants to part with their money through false pretenses.

The Court also addressed Sulit’s claim that the private complainants should have been aware of the risks involved, given the ‘Risk Disclosure Agreement’ they signed. The Court dismissed this argument, stating that Valbury’s lack of registration with the Securities and Exchange Commission (SEC) made their operations inherently illegal. The misrepresentation that they could legally trade foreign currencies was a clear act of deceit. The SEC certification confirmed that Valbury was not authorized to buy, sell, or trade foreign currencies, thus invalidating any claims of legitimate investment activities.

Furthermore, Sulit contended that he was deprived of due process because his counsel waived his right to present evidence. The Court noted that Sulit’s counsel filed a demurrer to evidence without leave of court, which, under Section 23 of Rule 119 of the Revised Rules of Criminal Procedure, constitutes a waiver of the right to present evidence. The Court also invoked the principle that the negligence of counsel generally binds the client, unless it amounts to gross incompetence. In this case, Sulit failed to demonstrate that his counsel’s actions constituted gross negligence that deprived him of a fair trial.

The Court also considered the appropriate penalty in light of Republic Act No. 10951, which adjusted the penalties for estafa based on the amount defrauded. Given the total amount defrauded was P697,187.13, the imposable penalty was adjusted to arresto mayor in its maximum period to prision correccional in its minimum period. Applying the Indeterminate Sentence Law, the Court imposed a penalty of two months and one day of arresto mayor, as minimum, to one year and one day of prision correccional, as maximum. The court also ordered Sulit to pay P192,187.13 to Caridad Bueno; P255,000.00 to Ma. Lita Bonsol; and P250,000.00 to Gregoria Ilot, with a legal interest of 6% per annum from the finality of the decision until full payment, as per Bangko Sentral ng Pilipinas Circular No. 799, Series of 2013.

FAQs

What is estafa under Philippine law?	Estafa is a crime under Article 315 of the Revised Penal Code, involving fraud or deceit that causes damage to another person. It typically involves false pretenses or fraudulent representations used to induce someone to part with their money or property.
What are the elements of estafa by means of deceit?	The elements include a false pretense or fraudulent representation, made prior to or simultaneously with the fraud, reliance by the offended party on the false pretense, and resulting damage to the offended party.
What is conspiracy in the context of estafa?	Conspiracy exists when two or more persons agree to commit estafa and decide to pursue it. Once conspiracy is proven, the act of one conspirator is considered the act of all.
What is a demurrer to evidence?	A demurrer to evidence is a motion filed by the accused after the prosecution rests its case, arguing that the evidence presented is insufficient to prove guilt beyond reasonable doubt.
What happens if a demurrer to evidence is filed without leave of court?	Filing a demurrer to evidence without leave of court constitutes a waiver of the accused’s right to present evidence, and the case is submitted for judgment based on the prosecution’s evidence.
What is the Indeterminate Sentence Law?	The Indeterminate Sentence Law requires courts to impose an indeterminate sentence, consisting of a minimum and maximum term of imprisonment, to allow for parole consideration.
How does Republic Act No. 10951 affect the penalties for estafa?	Republic Act No. 10951 adjusted the penalties for various crimes, including estafa, based on the amount defrauded, leading to potentially lighter penalties for certain cases.
What was the SEC certification in this case?	The SEC certification confirmed that Valbury Assets Ltd. was not a registered corporation authorized to buy, sell, and trade foreign currencies, which was a key piece of evidence in proving the fraudulent nature of their operations.
What is the legal interest rate imposed in this case?	The Court imposed a legal interest rate of 6% per annum on the amounts owed to the private complainants, from the date of finality of the decision until full payment, in accordance with Bangko Sentral ng Pilipinas Circular No. 799, Series of 2013.

This case underscores the importance of due diligence when making investments and highlights the potential liability of individuals involved in fraudulent schemes, even if their direct participation in the initial deceit is not immediately apparent. The ruling serves as a reminder that active participation in a conspiracy to defraud can lead to criminal liability and significant financial repercussions.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Alex Sulit v. People, G.R. No. 202264, October 16, 2019