RELATE TO PHILIPPINE SETTING

LEGACY GROUP OF COMPANIES

Mastermind and concept of the scheme

The banks presidents claimed that between the last quarter of 2006 until November
2008, De Los Angeles presided in at least four meetings of presidents of Legacy banks
to discuss the “Motorcycle Loan Program,” “Investments Loans” program and—before
the banks closed in December 2008—the necessary “clean up” to cover their tracks.
The “Motorcycle Loan Program” and “Investment Loan” program siphoned P1.6 billion
up to P2 billion from the three banks to other companies allegedly owned by De Los
Angeles.

Motorcycle Loan Program

The first “series of meetings” were held in the last quarter of 2006 in de los Angeles’s
office in Makati City. Mr. Celso de los Angeles explained that his company, Legacy
Motors Inc. (LMI), would purchase motorcycles from China and these would be offered
for loans through banks to interested borrowThe procedure was simple. The banks will
convince the prospective borrowers to each avail of the P55, 000 motorcycle loans. For
every approved loan, P51,000 would be deposited to the account of LMI. The rest was
recognized as income by the bank.

LMI would deliver the motorcycles to the approved borrowers, who would pay a monthly
amortization of P3,000 for period of three years. So, out of the total motorcycle
borrowers, only a few motorcycles were delivered and distributed to the borrowers.
Another victim has witnessed that out of the 2,000 borrowers; only 100 motorcycles
were delivered and distributed to the borrowers.

The LMI account covered all the funds that would be taken out from the bank. A
withdrawal slip was issued every time de los Angeles asked for funds from the bank to
be deposited to the LCPI account at Banco De Oro Corp Bel-Air Branch.

The said account was also used to clean up simulated loans, motorcycle loans, and
other Legacy related loans and to pay for marketing incentives

Investors Loan Program

De los Angeles presided in another meeting in November 2007. It was held at the 29th
floor of the World Center Building in Makati City. It is said to be the personal office of de
los Angeles.

The concept of the “investment loans” program is for the bank to grant loans to
individuals with the proceeds of their loans to be invested in Fusion Capital Corporation,
a company owned by Mr. Celso de los Angeles. In this program, the borrower individual
is given one percent “incentive/commission” by the bank in consideration for his/her
loan availment and investment at Fusion Capital. Mr. Celso de los Angeles also said
that these loans shall be unsecured loans. Mr. de los Angeles encouraged his client
(banks) to market said product to their existing depositors, friends, and relatives.

A cashier’s check was issued in the name of the borrower to make it appear that they
received the loan. The cash discrepancy in the bank cannot be noticed because it would
be covered by the alleged withdrawal from the account of FCC in our bank

Covering their tracks

One testified about meetings in August and November 2008, which Mr. de los Angeles
presided jointly with Mr. Petralba.

During the meeting, Mr. de los Angeles and Mr. Petralba instructed all presidents of
Legacy banks to secure real properties from Legacy Consolidated Assets Holdings Inc.
(LCAHI) and Fusion Capital, or for Fusion Capital to purchase and acquire real
properties from prospective individual owners who are willing to sell their properties at a
low price. The purpose of the scheme was to clean up and erase all traces of the
investment loans and simulated loans from the books of Banks (e.g. Bank of Asia) and
replace them in the bank’s books with real properties. Before the closure of banks in
December 2008, one said Mr. Petralba also instructed to get rid of the originals and loan
documents covering the investment loans and simulated loans.

One of the employees of the bank also mentioned how Legacy Plans Inc. chief finance
officer Namnama Pasetes and chief executive officer Carolino Hinola would instruct
them to take out funds from the bank—ranging from P100,000 to P1.5 million—to
deposit to the account of Legacy Consolidated Plans Inc. And explained that those were
directives of Mr. Celso de los Angeles, thus, no other choice but to follow the
instructions because Mr. de los Angeles is the titular head of their bank.