WHAT WENT BEFORE: ‘Bunnyscam’

Philippine Daily Inquirer

First Posted 04:59:00 02/15/2011

Filed Under: Crime and Law and Justice, Investments

MANILA, Philippines—Josephine “Bunny” German, wife of then Vice President Joseph Estrada’s former media relations officer Aurelio
“Reli” German, was implicated in 1998 in a moneymaking scheme called pyramiding.

Pyramiding is defined in the Consumer Protection Act as “a scheme whereby a person, upon condition that he makes an investment, is
granted the right to recruit for profit one or more additional persons who will also be granted such right to recruit upon the same
conditions.”

Profits from the scheme are primarily derived from the recruitment.

The complainants alleged that Bunny German asked them to invest a certain amount of money on a promise that it would “grow” when
they recruited other investors. German, in turn, issued post-dated checks as repayment for their capital as well as profits. They said
German assured them the business was stable and safe because of her “connections” with Estrada.

Initially, the venture proved profitable. Investors said that they got the promised returns, and this encouraged them to roll over their
investments.

Then German’s checks began to bounce. Five investors filed a complaint against German in the Department of Justice (DoJ). They
presented five checks amounting to more than P26.7 million that bounced. The scheme was estimated to have reached P800 million
before it collapsed.

On Feb. 27, 1998, German left the country and flew to Frankfurt, Germany.

On March 12, German gave her first media interview. She said the pressures by several investors led by the Reyes and Mateo families,
her neighbors in Pasig City, caused the collapse of her venture, which she maintained was “perfectly legitimate.” German also stressed
that Estrada had nothing to do with her business. (On March 25, a DoJ fact-finding panel later cleared Estrada of involvement in the
scheme.)

German said that in early February, she told the two families she was having financial difficulties and could not continue the operation.

However, German said the Reyeses and Mateos insisted that she return their capital plus interest. The Reyeses even warned other
investors to withdraw because she was running out of money, German said.

German said the two families, among other big-time investors, had profited millions from the scheme. Sonia Mateo, who initially
invested P10 million in 1994, earned P128 million in the past four years; and the Reyes couple got P38 million out of a P15 million
investment.

But sources told the Inquirer that other investors had lost millions as well. Dr. Loi Estrada, Estrada’s wife, was said to have lost P27
million to the scheme, while then Makati Mayor Jejomar Binay and his wife together purportedly lost P75 million.

A DoJ resolution on Feb. 16, 1999, recommended the filing of charges against German on five counts of violation of the Bouncing
Checks Law.

On April 8, 1999, the cases against German were filed in the Pasig City Regional Trial Court. Warrants were issued for her arrest but
they could not be served since she was still in Bangkok at the time.

But on May 5, 1999, police arrested her in Pasig City. She posted a P200,000 bail bond. On her arraignment, German pleaded not
guilty to all the charges. Inquirer Research

Source: Inquirer Archives

Bunny German guilty of estafa, meted out 6 yrs
By Niña Calleja
Philippine Daily Inquirer
First Posted 04:58:00 02/15/2011

Filed Under: Crime and Law and Justice, Investments,Punishment

MANILA, Philippines—Josephine “Bunny” German, wife of former President Joseph Estrada’s media relations officer Aurelio “Reli”
German, has been convicted of estafa and sentenced to six years up to 20 years imprisonment.

Judge Danilo Buemio of the Pasig Regional Trial Court Branch 268 also ordered German to pay P10.7 million in actual damages to the
complainant, businessman Roy Eduardo T. Lucero.

The decision was dated Aug. 2, 2010, but was released only on Thursday because of postponements in its promulgation.

German and her lawyer Harvey Bracero questioned the verdict, saying the evidence presented in court was sufficient to acquit her.

“They can’t claim fraud … How can I defraud him when everybody knows me,” German told the Inquirer over the phone.

German said that over 50 cases had been leveled against her in connection with her investment schemes.

“I won them all,” she said, except the Lucero suit.

Bracero said the ruling was not yet “final and executory.” He said he planned to file a motion for reconsideration of the court’s decision.

“We will pursue our remedies under the law. We will certainly question the decision,” Bracero said.

German and Lucero were neighbors at San Antonio Village in Pasig City and colleagues at the village association where she was the
president and Lucero was the vice president.

Lucero claimed that German, who has been living in her home in New Manila, had induced him to invest a total of P10,769,520 in a
money-making scheme beginning in 1995.

He testified that German told him she needed an investor to buy seized goods from the Bureau of Customs at a low price for resale. He
allegedly was promised his money would earn 15 percent in 10 days.

Lucero declined German’s offer, saying he needed a collateral first.

After some time, German proposed another way to earn with Tri-Star Inc. in which he was told that his P200,000 would yield a weekly
rate of P2,100 for six months. He agreed to invest after German showed him the contract.

Checks bounced

Lucero said all the post-dated checks given to him were later dishonored by the bank while German refused to settle the bouncing
checks.

He said that he later learned German had no business at the customs bureau.

German, however, told the court that Lucero’s total investments amounted only to P5 million—not P10 million—and that these had been
liquidated and settled from July 29, 1997, to August 1997.

She said she made a total payment to Lucero amounting to P69,836,377 as of Feb. 23, 1998. She told the Inquirer that Lucero had
made a total of P81 million in earnings from her.

German said she found the guilty verdict confusing, pointing out she was acquitted in another case of violation of the anti-bouncing
check law filed by Lucero at Pasig Regional Trial Court Branch 69.

Same evidence

“We submitted the same evidence to the two courts,” German told the Inquirer yesterday.
“Mr. Lucero admitted he invested P6 million to P7 million. And subsequently, I presented in court the original checks issued to Mr.
Lucero with the amount of P81 million. And that was why I was acquitted by (Branch 69),” she added.

“How could Mr. Lucero still sue me when he earned P81 million?” she said.

In his decision, Buemio said the prosecution sufficiently proved that German committed estafa while the defense failed to establish any
legitimate business where the money of Lucero was invested.

“The private complainant was deprived of his property because of the false pretense made by the offender, that is, by pretending to
possess business,” Buemio said.