DOJ to file tax evasion raps vs pawnshop owner

The Department of Justice is set to file tax evasion charges against William Villarica, owner of the W. Villarica pawnshop chain, before the Court of Tax Appeals. In a nine-page resolution, dated June 1, the DOJ gave weight to a complaint filed by the Bureau of Internal Revenue and said there was probable cause to file charges against Villarica for violating the National Internal Revenue Code. The complaint against Villarica was the first tax evasion complaint to be filed during the administration of President Benigno Aquino III. [See: BIR files tax evasion case vs pawnshop owner] Citing BIR and Land Transportation Office (LTO) records, the DOJ questioned how Villarica was able to buy a P26-million luxury vehicle in 2007 despite saying that he did not earn any income that year because his business was shut down. Villarica did not pay taxes that year, the DOJ noted. However, the department said in its resolution: "Evidence shows that respondent (Villarica) had substantial income in 2007 for he was able to purchase and fully pay an expensive Lamborghini luxury sports car worth P26 million which was duly registered under his name with the LTO, but said income of respondent was undeclared and unaccounted." But DOJ dismissed the BIR's allegation that Villarica was deliberate when he did not file his income tax returns for from 2002 to 2009. "It appears for now that the evidence submitted for the said charge is insufficient yet to establish probable cause against respondent; hence, the same must be dismissed without prejudice," said the DOJ. Assistant State Prosecutor Edna Valuenzuela penned the resolution. Prosecutor General Clara Arellano and Senior Deputy State Prosecutor Miguel Guido approved Valenzuela's findings. Villarica's defense In his counter-affidavit, Villarica denied the charges against him and said that his pawnshop business stopped operating in 2001. He said that he leased his pawnshop outlets, but the venture did not generate any income. After his business collapsed, Villarica said he started lending money to individuals who pay taxes and customs duties for imported motor vehicles. The imported vehicles would then be given to him as collateral, and would remain under his custody until the loans were paid, according to the businessman. The DOJ found Villarica's explanation insufficient. "Neither did he specifically state that the imported car was offered to him as a security, and which he took custody and possession of, pending full payment of the loan is the Lamborghini sports car subject matter of this investigation. Such explanation, therefore, of respondent is hypothetical and a mere supposition. The DOJ also said that LTO records show that the Lamborghini was registered under Villarica's name. That he bought the car was supported by a deed of sale dated April 2, 2007, which allowed him to get a certificate of registration and official receipt from the LTO. — VS, GMA News