Court of Appeals Affirms Dismissal of AMLC Forfeiture Case Linked to Pastillas Scam

 

The Court of Appeals has reaffirmed its earlier decision dismissing the government's forfeiture case against a former National Bureau of Investigation official and three other individuals accused of having ties to the controversial pastillas scheme.

In a resolution promulgated on July 16, the appellate court's Former Eighth Division rejected the motion for reconsideration filed by the Anti-Money Laundering Council, effectively sustaining its April 2025 ruling in favor of former NBI Legal Assistance Section chief Joshua Paul Capiral, his brother and former immigration officer Christopher John Capiral, Rosalina Ang Chua, and Ma. Luisa Rosario Chua.

Associate Justice Eleuterio Bathan, who penned the two-page resolution, explained that the court found no legal basis to alter its previous findings. The panel concluded that the AMLC merely reiterated arguments that had already been thoroughly examined during the original proceedings and failed to introduce any new evidence capable of changing the outcome. Associate Justices Nina Antonio-Valenzuela and Florencio Mamauag Jr. concurred with the decision.

The latest ruling effectively closes another chapter in the civil forfeiture proceedings, reinforcing the principle that financial suspicion alone does not automatically establish money laundering. Courts require a demonstrable connection between disputed assets and a specific unlawful activity before property may be permanently forfeited.

The appellate court had previously overturned the Muntinlupa City Regional Trial Court's ruling, finding that the AMLC did not present sufficient evidence proving that the Capiral brothers engaged in money laundering. Although investigators identified approximately P5 million in deposits and withdrawals across the brothers' bank accounts between 2016 and 2021, the court determined that these transactions, by themselves, did not prove criminal conduct.

Earlier proceedings resulted in the seizure of the remaining P138,000 in the questioned accounts. However, the Court of Appeals ruled that while the financial activity appeared disproportionate to the declared income of the account holders, the AMLC failed to establish the crucial legal link connecting the funds to an underlying criminal offense. In money laundering cases, unusual financial transactions may raise legitimate concerns, but they cannot replace concrete evidence demonstrating that the money originated from illegal activities.

The forfeiture case stemmed from the broader investigation into the so called pastillas scheme, an alleged corruption network that enabled Chinese nationals, many reportedly connected to Philippine offshore gaming operator companies, to enter the Philippines without complying with standard immigration requirements.

Authorities also accused the Capiral brothers and their two co-respondents of accepting P200,000 from an immigration officer. Prosecutors alleged that they extorted money from immigration personnel in exchange for removing their names from potential complaints. The cash was reportedly rolled inside bond paper, resembling the Filipino milk candy known as pastillas, giving the scheme its widely recognized name.

While the allegations surrounding the pastillas controversy attracted significant public attention, the Court of Appeals emphasized that civil forfeiture requires proof that satisfies the legal standards established under anti-money laundering laws. Without evidence directly tracing the questioned assets to unlawful activity, the forfeiture action could not be sustained.