The government will take action against alleged rice cartel and smuggling “Goliath” Davidson Bangayan alias David Tan this week after Justice Secretary Menardo Guevarra said yesterday criminal charges against the trader are now up for resolution.

In response to a query of Daily Tribune on the status of the probe against Bangayan, Guevarra said he will act to get updated on its status tomorrow.

“That’s for resolution as far as I know. But let me double-check on Monday,” Guevarra said in his response yesterday.

Last November, the Department of Justice (DoJ) completed the preliminary investigation on the criminal charges against Tan in connection with his alleged involvement in the rice cartel uncovered during the Aquino administration and which is being pointed to in the recent spike in rice prices and the disappearing supply of cheap National Food Authority (NFA) rice.

A three-person investigating panel headed by Assistant State Prosecutor Susan Villanueva was formed to investigate the allegation against the supposed rice smuggler.

The complaints were submitted for resolution after the National Bureau of Investigation (NBI) opted not to reply to the counter-affidavits submitted by Bangayan and the other respondents.

Worse than pork scam

Based on the findings of the Senate Committee on Agriculture released during a hearing on the rice cartel, as much as 600,000 metric tons (MT) of rice are smuggled each year and an estimated P200 billion to P450 billion in potential revenues is lost to smuggling of farm goods mainly grains.

Senate Committee on Agriculture and Food chairman Cynthia Villar had said “smuggling is more serious than the pork barrel scam.”

Under the anomaly an estimated P10 billion was pilfered from the Priority Development Assistance Fund (PDAF) that was declared unconstitutional in 2013.

Based on the documents from the NFA presented in House inquiries, import permits were given to five entities out of 31 importers who applied for permits under the administration of former President Aquino.

The permits were for the importation of well-milled rice under the country specific quota of 163,000 MT for 2013.

Among those granted with import permits were Starcraft International Trading Corp. (5,000 MT); San Miguel MPC (5,000 MT); Bold Bidder Marketing and General Merchandise (3,560 MT); Inter-Continental Grains International Trading Inc. (2,200 MT) and Kwin Rice Trading (5,000 MT).

Starcraft International Trading which cornered the biggest share of the permit was owned by Bangayan, who was the subject of a Senate probe in 2013 for supposed “big-time smuggling operation” in Davao City.

Villar had lamented that efforts to run after Tan became futile after the case against Tan was withdrawn and returned to the preliminary examination stage of the NBI under former Justice Secretary, now detained Sen. Leila de Lima.

The case was, however, refiled with the DoJ after President Rodrigo Duterte took over.

Smuggling facilitated

The previous Aquino administration implemented the “Farmers as Importers Program” in which the government through NFA allows farmers groups or their cooperatives to import grains subject to limits that the country committed to the World Trade Organization (WTO).

The scheme bred smuggling and corruption through direct bribes and protection money from smugglers.

Rice imports from Vietnam in 2013, for instance, were estimated to have been overpriced by as much as $18.8 million with the modus operandi of rice cartels and smugglers that uses farmers’ cooperatives as dummies, a scheme that was an open secret inside the NFA.

Cause-oriented groups in the farm industry said the racket can’t happen without top-level blessing from the previous government.

Complaints filed

Bangayan is facing complaints for bid fixing in violation of the Government Procurement Reform Act (Republic Act 9184), monopoly and restraint of trade and using a fictitious name or concealing his true identity.

He shrugged off the complaint, saying the allegations were baseless and “speculative.”

Bangayan and his co-respondents were accused of financing farmer cooperatives and single proprietorships in 2012 to become dummies in rice importation facilitated by the NFA that effectively allowed them to corner rice importation.

The affidavit of Bangayan stated that the evidence against him and the others were hearsay.

He also argued the NBI did not present any competent and credible proof that he was a financier of cooperatives suspected of being involved in the scam.

His co-respondents in the complaint for monopolies and combinations in restraint of trade were spouses Judilyne Lim and David Lim, Leah Echiveria, Elizabeth Faustino and Eleanor Rodriguez.

Judilyne Lim, Faustino, Rodriguez and Echiveria were named as Tan’s co-respondents in the complaint for violation of RA 9184.

Others named in the complaint were Eugene Pioquinto, Mary Joyce Lim, Jason Colocado, Michael Villanueva, Denis Gonzales, Willy Sy, Sandra Lim, Gil Calipayan and Inigo Espiritu.

NBI holds probe

The panel of Valdes conducted preliminary investigation against Tan and the others based on the complaint of the NBI-Anti-Graft Investigation Division.

Tan and company were investigated by the NBI upon the request of the Senate, through its Committee Report 763 (Committees on Agriculture and Food, Ways and Means, Trade and Commerce and Accountability of Public Officers).

Tan was charged with monopolies and combinations in restraint of trade, as penalized under Article 186 of the Revised Penal Code (RPC); bid fixing under Section 65 of RA 9184 (Government Procurement Act); using fictitious name or concealing true name, as penalized under Article 178 of the RPC and violation of Commonwealth Act 142, as amended by RA 6085.

On 30 October last year, Tan appeared at the DoJ to file a counter-affidavit on the charges filed by NBI.

In his reply, Bangayan denied using “David Tan” — the person dubbed by authorities rice smuggling king — as his fictitious name or alias.

David Tan disowned

“I am categorically denying that I am ‘David Tan’ who supposedly was the ‘financier’ of certain cooperatives. My name is Davidson Bangayan. I was born out of wedlock to my parents Victoria Bangayan and Dy Ting Ham. Considering my illegitimacy, I am using my mother’s surname in all my personal and business dealings,” read his counter-affidavit.

“There is no evidence that I represented myself as David Tan to a certain Hernandez and Ingal. I do not know them nor have I met them,” he pointed out.

Businessman Jess Arranza, however, presented to the NBI “a duly signed and notarized complaint affidavit of Bangayan” against him for libel.

In the libel charge on Arranza, Bangayan said, “Clearly, the foregoing publicity categorically imputed to me and the company Advanced Scrap Specialists Corp. the following wrongful acts, namely, swindling, contraband shipment…and the identification of the person referred to in the publication definitely referred to me considering that there is no other person by the name of Davidson Bangayan a.k.a. David Tan.”

Cartel scheme known

In its complaint, the NBI alleged that respondents conspired to use rice farmers “for the purpose of acquiring substantial allocations on the Private Sector Financed Importation Tax Expenditure Subsidy importation program of the NFA with the end goal of monopolizing the supply of rice.”

“The aforementioned individuals conspired or agreed to organize the farmers’ cooperatives and organizations as well as other juridical personalities in order to monopolize the supply and distribution of rice through pre-arranged bidding and other false pretenses, thereby preventing free competition in the market,” the complaint added.