(UPDATE) THE Department of Justice (DOJ) has authorized the filing of criminal tax evasion charges against business owners Pacifico “Curlee” Discaya and his wife, Cezarah “Sarah”, after finding sufficient evidence to support a likely conviction.
In resolutions dated Jan. 14, but made public on Wednesday, the DOJ found prima facie evidence to indict the couple for willful violations of the National Internal Revenue Code (NIRC) for taxable years 2020 and 2021.
According to the Office of the Prosecutor General, prosecutors concluded that Curlee, as sole proprietor of St. Gerrard Construction General Contractor and Development Corp., and Sarah, as sole proprietor of Fine Things Fashion Wear House, violated Section 254 of the NIRC, or willful attempt to evade or defeat tax by allegedly concealing and under-declaring their true incomes.
The DOJ also found the couple liable under Section 255 of the NIRC, or the willful failure to supply correct and accurate information, for allegedly submitting incorrect data in their respective income tax returns for the same periods.
The cases will be filed before the Court of Tax Appeals, which has jurisdiction over tax and customs-related criminal cases.
However, the DOJ dismissed three other tax-related complaints against the Discayas and their firm St. Gerrard Construction, which stemmed from alleged violations of Section 263 of the NIRC, or unlawful possession or removal of articles subject to excise tax without payment of tax.
DOJ spokesman Assistant Secretary Paulo Martinez said the liability for excise taxes rests with the importer, not the end consumer.
“The Discayas were simply end consumers. The local dealer, as the importer, is the one obligated to pay the excise tax. Buyers have no liability if the importer fails to remit the proper taxes,” Martinez said.
The dismissed cases involved luxury vehicles previously seized by authorities, including Land Rover, Range Rover, Cadillac Escalade and Mercedes-Benz units, which the Discayas had purchased from local dealers.
The DOJ also said one complaint against Sarah was junked after prosecutors found she was not the importer of the vehicles, while two other complaints against Curlee and St. Gerrard were dismissed for being filed beyond the five-year prescription period.
The Bureau of Internal Revenue and the Bureau of Immigration filed the complaints in October, citing alleged tax liabilities amounting to around P7.18 billion.
The Discayas, who are linked to controversial flood control projects, have been under investigation amid allegations of anomalous government contracts. Sarah is currently detained over graft and malversation cases in Cebu, while Curlee has been under Senate detention since last year after being cited in contempt for refusing to cooperate in a Senate probe into flood control spending.
Pretrial reset
Meanwhile, the Regional Trial Court Branch 27 in Cebu has reset to Feb. 27 the pretrial of contractor Sarah Discaya and nine others facing graft and malversation charges over an alleged P96.5-million ghost flood control project in Davao Occidental.
Presiding Judge Nelson Leyco moved the pretrial, originally set on Feb. 3, after the defense requested more time to complete the mandatory pre-marking of documentary exhibits.
The court granted the request to allow both the prosecution and the defense to review and organize the evidence, which totals more than 100 files and at least 4,000 pages.
Discaya, owner of St. Timothy Construction, and company president Maria Roma Rimando stand accused alongside Department of Public Works and Highways Davao Occidental District Engineering Office officials Rodrigo Larete, Michael Awa, Joel Lumogdang, Harold John Villaver, Jafael Faunillian, Josephine Valdez, Ranulfo Flores and Czar Ryan Ubungen.
Prosecutors charged them with violating Section 3(e) of Republic Act 3019, or the Anti-Graft and Corrupt Practices Act, and with malversation of public funds through falsification of commercial documents.
During the Feb. 3 hearing, defense counsel Joseph Randi Torregosa, representing Larete, told the court that the pre-marking was “premature,” citing the volume of exhibits that still required careful review to determine whether the defense would admit or contest them.
Ombudsman–Visayas officer in charge Jess Vincent Dela Peña said the documentary evidence could fill about three pieces of luggage.
Leyco ordered at least five pre-marking settings and directed both parties to submit a joint pretrial stipulation covering the existence, due execution and authenticity of documents.
Pre-marking resumed on the afternoon of Feb. 3 and is scheduled to end by Feb. 13, with sessions on Feb. 3 to 5 and Feb. 11 and 13.
The court required the parties to file the joint stipulation on or before Feb. 19 and to submit a complete list of documentary exhibits by Feb. 26.
All accused attended the Feb. 3 hearing via videoconference from the Lapu-Lapu City Jail, while their lawyers appeared in court. Leyco reiterated that virtual attendance remains allowed unless the Rules of Court require physical presence, particularly for document identification or verification, or upon manifestation by the prosecution.
The court also denied the defense’s motion for reconsideration of the denial of their motion to quash and rejected their request for an ocular inspection of the alleged flood control project site in Davao Occidental.
The defense had argued that the Supreme Court Office of the Court Administrator Circular 328-2025, which orders the transfer of cases outside the judicial region where accused officials hold office, does not apply to their case.
Leyco set the petitions for bail for summary hearing after the pretrial scheduled on Feb. 27.
The case was transferred to Lapu-Lapu City from the Digos City Regional Trial Court following a Supreme Court-approved re-raffling. Republic Act 10660, which expanded the jurisdiction of regional trial courts over graft cases, underpinned the transfer.
Discaya, who had surrendered to the National Bureau of Investigation central office and was initially held in Muntinlupa, arrived in Cebu under tight security on Dec. 19, 2025.
She and the other accused were committed to the Lapu-Lapu City Jail, where male and female detainees are held in separate dormitories.
The Office of the Ombudsman filed the charges after reviewing documents, conducting site inspections and obtaining sworn statements from witnesses, establishing probable cause for malversation of public funds and violations of the Anti-Graft and Corrupt Practices Act.
