It was on May 27,1977 when Dolores Ventoza who was then based in New York requested the First National City Bank (FNCB) to transfer $1,000.00 to the bank account of Victoria Javier. Ventoza is a sister of Melchor Javier who is married to Victoria.
FNCB in turn gave instructions to Mellon Bank to effect the transfer to Prudential Bank through Manufacturers Hanover Bank. Victoria and Melchor Javier were clients of Prudential Bank in the Philippines. Somewhere along the line, and probably because of the involvement of too many banks in the remittance order, the original $1,000 became $1,000,000. It was obviously a clerical error but because of the amount involved, the wire transfer was unwittingly approved by a busy but trusting senior bank officer who was reportedly sacked for gross negligence.
(This writer was at that time a senior executive of Bank of America, Manila Branch. He was aware of what was going on in banking circles.)
Roberto Griño, the Chief Accountant of Prudential Bank notified the Javier spouses of the inward remittance. Melchor Javier could not believe that his sister in New York would send him such a huge amount. He knew that past remittances were much smaller and that his sibling did not have that kind of money. Thus, he asked Prudential Bank to verify the amount on the wire transfer. Through another tested cable, the amount was certified by the remitting bank.
Without wasting time, the spouses immediately opened a new dollar account at Prudential Bank. They withdrew the money and converted it into a cashier’s check. Per their instructions, Prudential Bank issued six cashier’s checks, each amounting to P1 million. Each check was made payable to different companies and were delivered to Jose Marquez and Honorio Poblador, Jr., a former school mate of Melchor Javier at Ateneo de Manila.
Poblador eventually sold Javier a 160-acre property in the Mojave Desert in California for P3,268,800 ($437,405). Foreign exchange rate at that time was roughly P7.50 to $1.00. Javier bought the property without bothering to see the barren land.
Learning about the purchase of the land, Mellon Bank filed a complaint in California, against the Javier spouses to impose constructive trust of the property from the money erroneously transferred to their account.
The bank also filed a complaint before the Court of First Instance of Rizal, Branch X, to recover the proceeds of the California property.
There was further attempt by the bank to trace the remainder of the funds but it was unsuccessful because the Javiers invoked Republic Act 1405 which pertained to the secrecy of bank deposits.
Other unconfirmed reports indicated that Mellon Bank offered fifty per cent or $500,000 to the Javier couple just to recover half of the money but the spouses responded that the rest of the money went to gambling losses. Thus, all efforts by the bank to recover the money were unsuccessful.
But the law caught up with the Javiers. The Bureau of Internal Revenue filed a case of tax evasion and fraud against the couple for non-declaration of the money erroneously received from Mellon Bank. The Supreme Court declared the couple guilty of filing a fraudulent tax return. Melchor Javier and his wife were sentenced to a prison term of 20 years. They were released after serving an undetermined number of years behind bars.