Swiss Bank Accounts Frozen in Marcos Case

TIMES LEGAL AFFAIRS WRITER

A Los Angeles federal judge ordered a freeze Monday on several Swiss bank accounts that may contain nearly $13 billion hidden in trust for the widow and children of the late Philippine President Ferdinand Marcos, according to testimony at a court hearing presented by a lawyer for Philippine human rights victims.

U.S. District Judge Manuel L. Real granted the preliminary injunction covering eight accounts in the Union Bank of Switzerland over the vigorous objections of bank lawyers who asserted that the documents that the rights victims are relying on are forgeries. They said bank officials told them that the accounts in question contained less than $6 million and that none of the money could be linked to the family of Marcos, who died in exile in 1989.

But Real said that based on evidence presented to him at the lengthy hearing, there was a likelihood that the plaintiffs would prevail and would suffer greater harm than the defendants if the injunction was not granted. Real said that if the accounts did not exist then the bank would not be hurt by issuance of the injunction.

"As Chick Hearn says, 'No harm, no foul,' " Real said, referring to the aphorism frequently used by the Los Angeles Lakers' longtime broadcaster.

The authenticity of virtually every document introduced by the plaintiffs' lawyer was challenged by bank attorneys during the hearing. Further complicating the proceedings was the fact that both sides introduced signed documents from the same Swiss lawyer containing diametrically contradictory statements.

The stormy hearing marked the latest chapter in a decade-long battle to determine just how much wealth Marcos and his cronies stole from their native land. Until now, Marcos' adversaries in the Philippines and elsewhere had alleged that Marcos and his wife Imelda had employed a series of elaborate financial schemes to illegally build a $5-billion fortune during 20 years in office. But on Monday, the sums at issue were more than double previous estimates.

One of the key documents introduced by Robert Swift, the lawyer for nearly 10,000 Filipinos who won a $1.9-billion judgment against Marcos' estate in 1994, states that as of June 30, 1997 there was $12.9 billion in an account in the Union Bank of Switzerland in the name of the Sandy Foundation.

Soon after the Marcos family fled into exile, Philippine investigators said that the Sandy Foundation, based in Vaduz, Lichtenstein, was one of several sham foundations set up to hide Marcos' assets.

Another document introduced by Swift was a Sept. 15 letter purportedly signed by a Lichtenstein lawyer, Peter Ritter, stating that he had been for many years the trustee of the Sandy Foundation, which "was established in 1970 by the former president of the Philippines, Ferdinand E. Marcos." The letter also states that on Aug. 21, 1986, after going into exile, Marcos signed a power of attorney giving his son Ferdinand Marcos Jr. and his daughter Imee Marcos authority over precious-metal accounts at Union Bank of Switzerland.

Ritter's letter further states that there have been a number of sales of the precious metal accounts, including large sales in June.

However, lawyers for the bank offered two affidavits from Ritter, challenging the authenticity of letters bearing his name that were introduced by the plaintiffs in court Monday. In these affidavits, Ritter contended that his signature was forged. "The signature is not mine, and the typed name is not in a form that I employ," Ritter said in the affidavit.

However, Judge Real refused to accept any of the affidavits offered by the bank lawyers. He said that bank officials, or others supporting the bank's position, had to first come to a U.S. court and subject themselves to cross-examination.

Bank lawyers said they will appeal Real's rulings.

During the hearing, Swift called to the stand Anthony Silano, who described himself as a Connecticut real estate developer hoping to gain a share of whatever money is recovered in the case. Silano testified he obtained documents from Ritter while in pursuit of information about hidden Marcos accounts. He said he obtained other documents from Reiner Jacobi, an Australian man who also has been involved in the search for Marcos' assets and is now a fugitive from drug charges in Florida.

Silano said he had met Ritter at his office in Lichtenstein. He was not asked, nor did he volunteer, why Ritter decided to make revelations about his relationship to the Marcos family.

Silano also described how he and associates of his in Switzerland hacked into Union Bank's computer system in Switzerland in search of Marcos' assets, which have been the subject of intense investigation by Philippine authorities and private parties since Marcos went into exile.

Silano said that after meeting Ritter earlier this year in Lichtenstein the Marcos trustee called him several times in Connecticut and that he returned the calls from pay phones.

Silano acknowledged in response to questions from Union Bank's New York lawyer, Philip Graham, that Swiss authorities had considered prosecuting him for espionage stemming from the computer hacking but that no charges were ever filed.

Since winning the $1.9-billion judgment against Marcos' estate in 1994, Swift has been in a protracted legal battle to collect on about $475 million of that amount, which records show are in two other Swiss banks--Swiss Bank Corporation and Credit Suisse. Those banks were not defendants in the human rights case, but evidence was introduced at a Honolulu trial that they were holding about $475 million in Marcos-linked funds under the name of dummy Lichtenstein foundations, Marcos cronies and aliases used by Marcos and his wife.

Those banks do not dispute that they hold the funds but contend that they are not authorized to release them because of conflicting claims from Imelda Marcos and her children and the Philippine government.

Attempts to settle claims over this money foundered last year.

Swift said that in recent months he had obtained information about vastly greater sums than he had previously known about. In early September, he filed a separate lawsuit, under seal, in Los Angeles federal court and obtained a temporary restraining order preventing Union Bank, Bank Julius Baer & Co. Ltd. and Standard Chartered Bank from transferring or dissipating assets in accounts allegedly linked to the Marcoses.

Swift also has submitted records stating that last June, $466 million from the sale of Marcos' gold was deposited in an account in the name of Philippine National Oil Corp. opened at Baer & Co. in Switzerland. Swift said the money was then quickly transferred to a second account. "It is believed that these accounts are controlled by a high-level Philippine official," Swift said.

Monday, Danforth Newcomb, a New York attorney representing Baer & Co., said bank officials had searched their records and found no such transaction. He, too, submitted affidavits from Swiss bank officials that Swift objected to.

Once again, Real sustained the objection, saying that those officials would have to subject themselves to cross-examination.

Both Graham and Newcomb said that because of Swiss banking secrecy laws the bank officials could only answer limited questions. Graham also said Swift and his clients were the victims of a "hoax."

John Bartko, a San Francisco lawyer who has represented the Marcos children for many years, said that "based on the evidence I've heard today, I'm very doubtful that there is an account with anywhere near this amount of money [$12.9 billion] that exists."

At hearing's end, Real appointed veteran New York lawyer Saul Schreiber, who previously worked for the judge in the Philippines human rights case, as a special master to conduct further discovery in the case.

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