BIR gets DOJ nod for P1.68B tax cases against ‘BGC Boys’

The Bureau of Internal Revenue (BIR) said the Department of Justice (DOJ) has found probable cause to file 44 criminal tax cases against former Department of Public Works and Highways (DPWH) officials Jaypee De Leon Mendoza, Henry C. Alcantara, and Brice Ericson D. Hernandez – colloquially known as the “BGC Boys” –   over alleged tax liabilities totaling more than P1.68 billion.

In a Thursday statement, the BIR said the cases stem from separate investigations that uncovered substantial discrepancies between the BGC Boys' declared income and actual expenditures, as well as the alleged non-filing and underreporting of income tax returns over multiple taxable years.

The BIR said it used the expenditure method—a recognized tax investigation technique that reconstructs income by comparing reported earnings with actual spending. Under this approach, unexplained expenditures exceeding declared income may be treated as evidence of unreported taxable income.

Following the DOJ's resolutions, the corresponding criminal informations may now be filed before the Court of Tax Appeals.

For Mendoza, the DOJ recommended the filing of 16 criminal informations covering taxable years 2021 to 2024 involving alleged income tax liabilities of P179.79 million after investigators found significant underdeclarations of income.

Alcantara faces 18 criminal informations covering taxable years 2022 to 2024 involving alleged tax liabilities of P913.83 million. The BIR said its investigation found substantial discrepancies between his reported income and acquisitions and determined that he failed to file income tax returns during the period.

Hernandez, meanwhile, faces 10 criminal informations covering taxable years 2020 to 2024 involving alleged tax liabilities of P593.78 million. The BIR said his expenditures consistently exceeded his reported income over the five-year period and that he also failed to file income tax returns for the covered years.

“The DOJ's finding of probable cause is an important milestone in the enforcement process. These cases demonstrate the Bureau's continuing commitment to enforce the tax laws based on evidence and in accordance with the law,” BIR Commissioner Charlito Martin R. Mendoza said.

Former DPWH officials Alcantara, Mendoza, and Hernandez—collectively referred to in media reports as the "BGC Boys" (Bulacan Group of Contractors)—have also been accused of irregularities involving flood control projects, including alleged ghost projects, overpricing, and kickback schemes tied to government contracts. 

They likewise face allegations of unexplained wealth, tax evasion, and the use of fake driver's licenses and aliases in official transactions. The trio has denied or disputed key allegations, while also providing testimony in front of the Senate’s Blue Ribbon Committee.

“The Bureau will continue to enforce the tax laws firmly, fairly, and consistently, while respecting due process at every stage of the proceedings,” Mendoza added.