The Court of Appeals (CA) has sustained an asset preservation order (APO) freezing over ₱15.5 million in bank deposits held by a married couple and their two companies for allegedly handling funds derived from illegal drug operations.
In a 13-page ruling authored by Associate Justice Ronaldo Roberto Martin and published on May 26, the appellate court backed the previous decisions of the Manila Regional Trial Court (RTC) to maintain the restrictions against spouses Annie Faustino Co and Jacky Mateo Ty, alongside their businesses, Crystalline Trading (CT) and CRS Foreign Exchange (CRS).
The legal battle began in December 2011 when the Anti-Money Laundering Council (AMLC) lodged a civil forfeiture complaint against 39 respondents, including the couple, citing violations of Republic Act No. 9165, or the Comprehensive Dangerous Drugs Act.
The AMLC asserted that the targeted bank accounts served as “pass-through” channels to funnel earnings generated from manufacturing and trafficking illegal narcotics.
Spouses Claim Business Legitimacy
The couple contested the allegations, asserting that their businesses were lawful entities properly registered and licensed by the government, and insisted their funds had no ties to illicit activities.
Nevertheless, the Manila RTC slapped the accounts with an asset preservation order on January 5, 2012, blocking the spouses and their firms from making withdrawals, transfers, or any other transactions involving the frozen funds.
After more than a decade, the couple petitioned to lift the freeze order, claiming the government dragged its feet in resolving the civil forfeiture case. When the RTC rejected their plea in April 2024, they took the matter to the CA.
Failure to Prove Source of Funds
Representing the AMLC and the trial court, the Office of the Solicitor General (OSG) countered that the couple failed to disprove the probable cause linking their accounts to narcotics and money laundering.
The OSG emphasized that the spouses could not justify the massive transaction volumes or prove they stemmed from clean business operations.
The appellate court acknowledged the clashing arguments of both camps in its review.
“Here, petitioners argue that the material allegations are false, and that their properties are not in any manner connected with the alleged unlawful activity. On the other hand, the OSG claims that the AMLC provided sufficient evidence to support the finding of probable cause that the accounts and other properties subject of the civil forfeiture proceedings are connected in any way to illegal drug activities and/or money laundering,” the CA said.
The CA further pointed out that the frozen amount was relatively minor compared to the multi-billion-peso scale of the broader criminal enterprise.
“Further, the issuance of an APO is only to secure the funds contained in the subject accounts which have a total balance of ₱15,592,911.76 and $501.04. The amount is minuscule considering the money involved in the alleged illegal activities and/or money laundering amounting to billions of pesos, or a total of ₱3,168,487,831,” the decision stated.
The Burden of Proof
In upholding the RTC’s stance, the CA emphasized that once a preservation order is in place, the responsibility falls squarely on the account owners to prove their wealth is legitimate.
The court also observed that the couple waited ten years before requesting relief and never once asked to accelerate the case proceedings.
“Finding that the RTC correctly denied petitioners’ Omnibus Motion to Discharge Asset Preservation Order for their failure to prove that the transactions came from legitimate sources, the allegation that the RTC committed grave abuse of discretion amounting to lack or in excess of jurisdiction has no merit,” the court ruled.
“Wherefore, the instant Petition for Certiorari is dismissed. The Orders dated 05 October 2023 and dated 22 April 2024 issued by the Regional Trial Court, National Capital Judicial Region, Branch 46, Manila City in AMLA Case No. 11-006-22 are Affirmed.”