‘Innocent bystander’: SC affirms CA decision to drop Emerson Palad from insurance fraud case

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The Supreme Court (SC) has affirmed a Court of Appeals’ (CA) decision that dropped lawyer and former Agriculture Undersecretary Emerson Palad from charges arising from an insurance fraud scheme in 2010.

In a recent 19-page decision, the SC 3rd Division denied the petition of BDO Life Assurance, Inc.—formerly Generali Pilipinas Life Assurance Co., Inc.— assailing the CA’s amended decision dated October 2, 2017.

The SC affirmed that there was no probable cause to indict Palad for estafa through falsification, as he was merely performing his duties as a lawyer for clients who turned out to have allegedly impersonated the kin of a deceased couple.

“Not only will Palad, which in the eyes of the Court is an innocent bystander unduly caught up in the controversy, be rightfully excluded on account of his apparent non-involvement, so too will the State be spared from exerting its resources persecuting an innocent individual,” read the decision penned by Associate Justice Andres Reyes, Jr.

Palad was one of the three persons arrested in a July 2, 2010 entrapment operation by the National Bureau of Investigation (NBI). He had accompanied Raynel Alvarado and Genevie Gragas to receive the checks for P6.24 million in accident insurance benefits.

It turned out that Alvarado had submitted fake documents and pretended to be the son of deceased spouses Carlos and Norma Andrada. Gragas pretended to be Alvarado’s aunt.

The Makati City Prosecutor’s Office’s December 30, 2010 resolution and the Prosecutor-General’s May 16, 2015 resolution did not find Palad to be part of the conspiracy as he merely accompanied the suspected fraudsters.

The CA in a May 12, 2017 decision initially found merit in the insurance firm’s petition seeking Palad’s indictment. It said the prosecutors had applied the stricted standard of “clear and convincing evidence” and “proof beyond reasonable doubt” in absolving Palad, instead of the standard of “probable cause.”

But, the CA reversed itself in its October 2, 2017 amended decision. It said Palad was merely performing his duty as a lawyer and the checks were already prepared by the time of his presence.

The SC said it was not convinced to make an exception to the rule that it will not review factual findings. It noted that the CA decision “conforms without deviation” to the resolutions of the city prosecutor and the Prosecutor-General.

In any case, the SC agreed there would not be probable cause against Palad. It said “reasonable evidence” was “wanting” to establish the probability of Palad’s involvement.

It said the insurance company was “unable to show that Palad acted in concert pursuant to the objective to defraud the company, nor had any knowledge about the scheme.”

The company argued Palad’s actions during the entrapment operation were suspicious enough, and that he was the brother-in-law and lawyer of alleged mastermind Vincent Paul Amposta.

However, the SC said these were “grounded on hypothesis more than actuality.” It stressed that speculation would not establish probable cause.

“The mere fact that a lesser scintilla of proof is necessary in order to find probable cause as to a suspect’s involvement does not take away the fact that the burden is on the part of the accuser to show a substantial probability that an accused’s actions or lack thereof constitute participation in the offense,” read the decision.

The SC agreed with the CA that Palad’s actions were routine for a lawyer. His act of showing his Integrated Bar of the Philippines (IBP) identification card to the NBI agents also showed he was “completely out of the loop” that his clients were alleged impostors.

Although there “may have been lack of absolute diligence” on Palad’s part, the SC said there was “no legal nor even ethical compulsion” for him to check if the police report was legitimate.

Since the checks were already prepared, the SC said it was “incorrect for petitioner to state that the crime could not have been consummated without Palad’s presence.” It also stressed that Palad’s relationship to Amposta was “not enough to attribute criminal responsibility.”

The SC rejected the insurance company’s argument that Palad could just defend his innocence in a court trial. It said this would defeat the purpose of a preliminary investigation “to secure the innocent against hasty, malicious and oppressive prosecutions.”

Two years after his arrest, Malacañang announced Palad’s appointment as Agriculture undersecretary in February 2012.

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