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Angeles City RTC indicts Rico Hizon, 2 sisters for estafa

Former CNN Philippines news anchor Federico M. Hizon, better known as “Rico Hizon”, was indicted on March 20, 2024, for estafa by the Angeles City Prosecutor’s Office in the amount of P762 million.

Also indicted were Hizon’s sisters Bernadette Hizon Deduque, a real estate landowner and investor; and Maria Belen M. Hizon, a practicing psychologist.

This criminal indictment resulted after due preliminary investigation by the Office of the City Prosecutor.

In a Criminal Information filed by said Office before the Regional Trial Court of Angeles City, Hizon and his two siblings were charged for the crime of Estafa under Article 315 par. 1(b) of the Revised Penal Code for alleged abuse of authority as directors, and misappropriation of corporate funds of the Angeles City-based Morlan Corporation, founded by their late aunt, the philantrophist Luz D. Morales, who passed away in 2015. 

The said corporation had about P5 billion in assets and P1 billion in cash deposited in the bank, but Hizon and the other respondents allegedly withdrew P762 million in the guise of cash advances during the Covid-19 pandemic, despite owning less than .007 percent of shares in Morlan Corporation.

Morlan reported a loss in 2021 and 2022, with a negative cash balance and with little cash reserves left. The bulk of the shares was owned by their aunt, who owned 97%  of the company in her name, and whose estate had not yet been settled by her heirs (the 3 accused and their sibling Ernesto) despite passing in December 2015.

The Criminal Complaint was filed in November 2023 by the oldest sibling of the accused, Atty. Ernesto Rafael Morales Hizon, who now resides in the United States and is represented by Atty. Elfren P. Hipolito, Jr. of the HTCC Law Offices based in Angeles City. 

Said complaint alleges that Hizon and his two sisters granted unto themselves interest-free loans, with no call date, or deadline to repay the loan, depriving the Morlan Corporation, which was established as a real estate company, from corporate opportunities to develop the firm’s real estate business through investments in other real properties and/or securities.

In the complaint, the so-called interest-free cash advances were obtained with no stated corporate purpose notwithstanding the fact that the company was involved in the business of real estate development, management, sales and lease of properties in Angeles City, Mabalacat City and Metro Manila.

The bulk of the cash on hand came from the sale in 2017-2018 of a property located in Barangay Mining, Angeles City owned by the Morlan Corporation to the Ayala Land Incorporated for over P800 million which now constitutes part of the Ayala Land Alveo Project known as Centrala, which is now pre-selling to the public. The sale was approved by the Morlan Board of Directors controlled by the three Hizon siblings accused in the criminal case.

The Estafa Complaint was filed in conjunction with an intra corporate dispute or commercial case (Petition for Mandamus) filed by Ernesto against the same accused/respondents in the Regional Trial Court of Angeles City.  Said commercial case involves the production of corporate records and accounting which petitioner Ernesto had been demanding from his respondent siblings, but in vain. The respondents were declared in default by the Regional Trial Court and the case is now submitted for decision after presentation of evidence by the petitioner.

To date, Ernesto, one of the compulsory heirs, has yet to receive any dividend, money, or property from the estate of Morales, much less, corporate records and accounting of financial transactions of the corporation.

The Hizon siblings and their father Jose are also parties to several cases filed by Ernesto  involving the estate of the their deceased mother Leonila Morales Hizon (only sibling of Luz) and the another family corporation, San Rafael Realty Corporation.

In an order by the RTC Branch 114, it was stated that the Court, upon examination and perusal of the information, record of the preliminary investigation, including the affidavits and written statements and other attachments to the Information, finds probable cause for the issuance of warrant of arrest against the accused on the offense charged.

PNN welcomes the side of Hizon and his siblings. Efforts to contact them in past proved futile.