The Bureau of Internal Revenue has secured a major courtroom victory in its intensifying campaign against ghost corporations, after a Quezon City court convicted the top officers of Decarich Supertrade, Inc. for deliberate tax fraud involving fictitious transactions and fake receipts.
In a decision promulgated on January 21, 2026, the Regional Trial Court of Quezon City, Branch 100, found Decarich president Fernando Bitoon Lawas, also known as Fernando Bitongon Lawas, and treasurer Adeline Manngas y Cañas, also known as Adeline Manggas y Cañas, guilty beyond reasonable doubt of criminal violations under the National Internal Revenue Code of 1997, as amended.
The ruling marks another enforcement win for the Bureau of Internal Revenue as it steps up efforts to dismantle networks using shell companies to evade taxes.
The court held the two corporate officers liable for failure to supply correct and accurate information in Decarich’s value-added tax return for the first quarter of taxable year 2021, an offense penalized under Section 255 of the Tax Code. Following a full trial, both were sentenced to imprisonment of up to three years and ordered to jointly pay fines totaling ₱120,000.
At the heart of the conviction was the court’s finding that Decarich Supertrade was a ghost corporation that existed on paper but not in reality, and was used to facilitate fraudulent transactions through the issuance and use of fake or ghost receipts.
While the company was duly registered with the Securities and Exchange Commission and the BIR, investigators discovered during an audit that it could not be found at its declared business address.
The investigation, conducted under a duly issued letter of authority and mission order, revealed that Decarich had no physical presence at its registered location. Certifications from barangay officials and the building administrator confirmed that the company neither occupied the address nor conducted any business there.
The absence of an actual office, the court said, fundamentally undermined Decarich’s claim that it was a legitimate, operating enterprise.
In its ruling, the court stressed that the mere act of providing a false or non-existent address to the BIR already constitutes a violation of tax law. It added that without a real place of business, Decarich could not have lawfully engaged in the commercial activities it declared.
Although corporate records were presented to suggest ongoing operations, the court found that these only exposed further inconsistencies, falsehoods, and fabricated claims.
Prosecutors also demonstrated that the data and documents submitted by the accused contained glaring discrepancies and were part of a scheme designed to reduce the company’s tax liabilities. The court said these inconsistencies showed a clear pattern of misrepresentation, concluding that the accused acted willfully and with fraudulent intent to prejudice the government’s right to collect the correct amount of taxes.
Specifically, Decarich declared millions of pesos in sales to various buyers in its quarterly VAT return, transactions that the court found never actually occurred. These false declarations were meant to conceal fictitious dealings of supposed clients and create the appearance of legitimate sales activity, despite the company’s lack of capacity to conduct such business.
The conviction sends a strong signal to individuals and entities using ghost corporations as tax-evasion vehicles, reinforcing the BIR’s warning that registration alone does not shield companies from scrutiny, and that fabricated compliance will be met with criminal accountability.