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Definition, Legal Basis, and Elements of Syndicated Estafa

The crime of syndicated estafa is different from the crime of simple estafa. Syndicated estafa is punished under Presidential Decree No. 1689 (“PD 1689”) while simple estafa is punished under Article 315 of Act No. 3815, or otherwise known as the Revised Penal Code (“RPC”).

The crime known as syndicated estafa is set forth and penalized by Section 1 of PD No. 1689. The said section reads:

“Section 1. Any person or persons who shall commit estafa or other forms of swindling as defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if the swindling (estafa) is committed by a syndicate consisting of five or more persons formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in the misappropriation of moneys contributed by stockholders, or members of rural banks, cooperative, “samahang nayon(s)“, or farmers’ associations, or of funds solicited by corporations/associations from the general public.”

In essence, syndicated estafa is but the commission of any kind of estafa under Article 315 of the RPC (or other forms of swindling under Article 316) with two (2) additional conditions, namely:

  1. the estafa or swindling was perpetrated by a “syndicate“; and
  2. the estafa or swindling resulted in the “misappropriation of money contributed by stockholders, or members of rural banks, cooperative, samahang nayon(s), or farmers association, or of funds solicited by corporations/associations from the general public.

In the recent case of Remo, et al. vs. SOJ Devanadera, et al., G.R. No. 192925, 09 December 2016, the Supreme Court detailed the elements of syndicated estafa as follows:

Estafa or other forms of swindling as defined in Articles 315 and 316 of the Revised Penal Code is committed:

  1. The estafa or swindling is committed by a syndicate; and
  2. The defraudation results in the misappropriation of moneys contributed by stockholders, or members of rural banks, cooperatives, samahang nayon(s), or farmers associations, or of funds solicited by corporations/associations from the general public.

What is considered as a syndicate?

As stated in the foregoing discussion, in order to commit the crime of syndicated estafa, the estafa must be committed by a “syndicate” as contemplated by the law. In PD No. 1689, the term syndicate is described as “consisting of five or more persons formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme x x x.”

This definition is somewhat vague that is why the term syndicate has been elucidated upon by the Court.

In order to be considered as a syndicate under PD No. 1689, the perpetrators of an estafa must not only be comprised of at least five individuals but must have also used the association that they formed or managed to defraud its own stockholders, members or depositors. Only those who formed or manage associations that receive contributions from the general public who misappropriated the contributions can commit syndicated estafa.

The Court was able to come up with the following standards by which a group of purported swindlers may be considered as a syndicate under PD No. 1689:

  1. They must be at least five (5) in number;
  2. They must have formed or managed a rural bank, cooperative, “samahang nayon,” farmer’s association or any other corporation or association that solicits funds from the general public.
  3. They formed or managed such association with the intention of carrying out an unlawful or illegal act, transaction, enterprise or schemei.e., they used the very association that they formed or managed as the means to defraud its own stockholders, members and depositors.

What is the penalty for syndicated estafa?

The penalty for syndicated estafa under PD No. 1689 is significantly heavier than that of simple estafa under Article 315 of the RPC. The penalty imposable for simple estafa follows the schedule under Article 315, as amended by Republic Act No. 10951, and is basically dependent on the value of the damage or prejudice caused by the perpetrator. Syndicated estafa, however, is punishable by life imprisonment to death regardless of the value of the damage or prejudiced caused.

About Nicolas and De Vega Law Offices

If you need assistance in civil or other criminal law-related issues,  we can help you. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website www.ndvlaw.com.

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