Judge Weighs Fraud in Marcos Lawsuit
At stake is $40 million allegedly belonging to the deceased dictator
Wednesday, February 25, 2004
The Philippine government may have misrepresented itself in a U.S. court case that seeks to determine ownership of about $40 million reportedly belonging to late Philippine dictator Ferdinand Marcos, a federal judge said yesterday.
"It's possible the government of the Philippines has committed fraud," U.S. District Judge Manuel Real said at the opening of a nonjury trial to determine ownership of the assets.
The $40 million originally was held by a Panamanian financial company alleged to be a shell corporation established by Marcos to hide illegally obtained assets.
Attorneys representing a class action of 9,539 Filipinos that successfully sued the Marcos estate for human-rights abuses are trying to recover the $40 million to start paying a $2 billion judgment awarded to the class by a Honolulu jury in 1995.
To date, none of the plaintiffs nor their estates has received any compensation, and the award has grown to more than $3.1 billion with interest.
The Philippine government cited "sovereign immunity" and refused to be part of the case, saying it had no connection to the $40 million and that it should not be a party.
But Real said information brought up at an earlier hearing made it appear that perhaps some form of agreement was reached between the Philippine government and other parties in the case -- specifically the Philippine National Bank and the Panamanian corporation, Arelma Inc. -- to turn the funds over to the government should either party prevail.
Any such agreement would constitute fraud, Real said. He ordered attorneys to investigate the relationship between all three parties.
The trial was recessed until May 24.
Jay Ziegler, an attorney representing Arelma and the Philippine National Bank, declined comment.
Robert Swift, an attorney for the class of plaintiffs, said Arelma was established by Marcos in Panama in 1972 -- the same year he declared martial law in the Philippines -- as a shell corporation to hide illegally obtained assets.
He said $2 million from Arelma was placed in a New York brokerage firm in 1972, and through the management of a Swiss financier grew to $40 million by 2000. The financier, Jean-Louis Sunier, testified in a deposition last year that he managed the account for Marcos, Swift said.
Ziegler said the undisputed facts show only that Arelma was incorporated in 1972 and that funds were transferred to a New York account. He said there is no evidence to definitively link either account to Marcos.
Also staking a claim to the $40 million was attorney Daniel Cathcart, who represents the estate of Rogelio Roxas, a Filipino treasure hunter who contends Marcos assets deposited into Arelma included money from the sale of items stolen from him, including a diamond-encrusted gold Buddha statue and some $22 billion worth of gold bullion.