By Maureen Koh

If you lend money to your friends and receive interest on the loan, do you risk being charged with illegal moneylending?

A Filipino maid spent almost one year agonising over her fate for doing just that.

And on the same day the judgement was delivered in her case, another Filipino maid was sentenced to 20 months' jail for moonlighting as a loan shark.

Ms Gemma Hernandez is now grateful for the blessings that have come her way. Not only was she acquitted and discharged on five counts of extending loans for interest, her employers helped to pay her legal fees of about $5,000.

They engaged lawyer Adrian Chong from Low Yeap Toh & Goon to defend her. The family declined to be interviewed. But they had earlier explained to Lianhe Zaobao - through Mr Chong - the reason behind their decision to pay her legal bills. "Gemma's chances of winning the case would've been tremendously reduced if she could not afford to engage a defence lawyer," they said.

The 43-year-old maid, who has been working for the American family since December 2004, said: "I'm lucky to be working for a good employer."

Well-liked by employers

Her duties included taking care of two young children in the household. Mr Chong added: "Gemma is definitely fortunate to have the support of the family. But that's also because she has worked for them for a few years and is well-liked by them."

Her woes began in April last year when her relationship with one of four close friends turned sour. Ms Nerissa Batong Mangrobang filed a police report, alleging that Ms Hernandez had given out loans and charged interest.
She had lent between $100 and $500 to four Filipinos. It was charged that Ms Hernandez tagged a 10 to 15 per cent interest to the loans between March 2006 and April 2007.

Ms Hernandez denied this and said it was her friends who offered the interest. She said she did not reject the offers of interest, made out of gratitude. "I said if you really would like to give me money, I of course would receive it."

She added: "I would only lend money to those who are my friends. They are all from the Philippines." She did not look for or approach the borrowers to lend them money, and she considered all four women her friends, she said.

Ms Hernandez said: "What normally happened was my friends would contact me on their own if they need(ed) cash." She believed they had done so because they knew "I was serving a good employer who give(s) me a high salary".

Ms Hernandez has been drawing a monthly salary of $525 since 2007. She was paid a monthly salary of $500 in 2006.

Most Filipino maids here are paid between $300 and $400 a month.

Her employer also pays her an allowance when she does not take a day off on public holidays. "She gives me gifts or presents for Christmas, birthdays and Chinese New Year in cash," said Ms Hernandez. "On my birthdays, I am given like $150. When my employer gave birth, she gave me $350."

Ms Hernandez's Filipino boyfriend, who works here, also gives her money every month to save for their wedding. Her borrower-friends were also aware that she did not need to send so much cash back home.

"My parents are helping to take care of my children, who are both in their early 20s," she said.

Ms Hernandez said she only wanted to help fellow Filipinos and was sad that her generosity had cost many sleepless nights.

She could have been fined $20,000 to $200,000 or jailed up to two years had she been convicted.

She could only place her faith in prayers. She also felt the sharp stab of betrayal.

Mr Chong said: "The past year has been traumatising for Gemma. She felt played out." He added: "At one point, she was on the brink of throwing in the towel."

Mr Chong felt that one key point that contributed to her acquittal was the "common cultural factor".

Common to lend money

He explained: "In their country, it is quite common for them to lend money to one another freely."

So for Ms Hernandez, it was a matter of extending the same generosity to others here.

It went beyond the level of common acquaintance, evident from some of the points that came up during the trial.

Mr Chong said: "In this background, you'd find the difference between the loans that Gemma gave out and those given by the usual loan sharks. Her case was such that it arose from her personal relationships with her debtors."

But he cautioned: "It... could still be an offence to lend money and receive interest, even from friends."

The law prohibits the business of moneylending and not the act of moneylending. A moneylender is not a person who lends money, but one who carries on the business of moneylending.

The critical point, as noted by District Judge Jasvender Kaur, was that Ms Hernandez "did not lend to all and sundry". She had even turned down a repeated loan request.

And this is something that Ms Hernandez may do more often now. She said: "In the past, I would have lent (my friends) money freely, as long as I could afford it.

"But this case has taught me a bitter lesson. I'll now think twice. Unless it is for a very good reason, I don't think I'll do it."

This article was first published in The New Paper on Oct 12, 2008.