The Philippine Deposit Insurance Corp. (PDIC) recently reported that the former president of a closed Legacy affiliate bank was arrested last week.
Romualdo Lugtu, former president of The Center Rural Bank in Alabang and former director and vice president for loans and credit of Banco Paranaque, was arrested on Thursday, January 28.
The Center Bank of Alabang and Banco Paranaque (Bank of Paranaque) are just two of dozens of Legacy-related banks that either went on a bank holiday or were closed by the Bangko Sentral ng Pilipinas. Most of these banks face allegations of fraud and unsound banking practices.
Mr. Lugtu allegedly created fictitious loans for the bank totaling P12 million. The borrowers named in the loan have denied their loan obligations, claiming that Mr. Lugtu asked them to sign blank documents which turned out to be loan documents.