The Securities and Exchange Commission on Tuesday asked the Department of Justice to criminally prosecute Kapa Community Ministry International Inc. and its officials over an alleged large-scale investment scam.
In a complaint filed with the DOJ, the SEC accused Kapa, its founder and president Pastor Joel Apolinario, trustee Margie Danao, corporate secretary Reyna Apolinario and officers Marisol Diaz, Adelfa Fernandico, Moises Mopia, Catherine Evangelista and Rene Catubigan of violating the provisions of Republic Act 8799 or Securities Regulation Code.
In particular, the SEC accused the respondents of perpetrating an investment scam by violating Sections 8 and 28 of the SRC.
Section 8 of the SRC prohibits sale or distribution of securities without a registration statement duly filed and approved by the SEC.
Section 28, on the other hand, prohibits any person from engaging in the business of buying or selling securities as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered with the SEC.
After investigation, the SEC also found that respondents violated Section 26 of the law that prohibits Ponzi schemes, or schemes that offer impossibly high returns and pays investors using the money contributed by other investors.
The SEC said its investigation showed that Kapa and its officers enticed the public to “donate” at least P10,000 in exchange for a 30 percent monthly “blessing” or “love gift” for life, without having to do anything other than invest and wait for the payout.
The investment scheme operated by respondents involved the sale and offering for sale or distribution to the public of securities, in the form of investment contracts.
SEC chairman Emilio Aquino said Kapa “amassed wealth through an investment scam in the guise of religion and at the expense of the investing public.”
The SEC said it already issued an advisory against Kapa’s operations as early as March 2017 and also issued a cease and desist order last February and an order of revocation of the nonstock corporation’s registration last April.
The commission, through the Anti-Money Laundering Council, also obtained a freeze order from the Court of Appeals on June 4 to preserve some P100 million in assets linked to Kapa.
Based on investigation conducted by the SEC, Kapa and its officers have at least nine luxury cars and sport utility vehicles, and a helicopter.
The group also claimed to have acquired a hospital, a school and other properties.
The SEC said it will name more respondents as it identifies other persons who have participated in the unlawful public offering or selling of securities by Kapa.
It also called on victims of Kapa to file charges against the group.
The Philippine National Police, meanwhile, said it has implemented 12 search warrants against various groups involved in investment scams.
Brig. Gen. Ferdinand Divina, deputy director of the PNP Directorate for Intelligence, said they have teamed up with the National Bureau of Investigation and the SEC to dismantle the operations of investment companies and corporations allegedly involved in scams.
Divina said the subject of these search warrants include Organico Agribusiness Ventures Corp. based in Cebu City; Ada Farm Agriventures in Mandaue City, Cebu; Rigen Marketing and Ever Arm Any Marketing.
“There were several search warrants, five from the CIDG [Criminal Investigation and Detection Group] and seven from the NBI and these were conducted in a number of regions namely Regions 7, 8, 11, 13 and also one in Region 2. So as you see, this is on a nationwide scale because this is really a concern,” Divina told reporters during the press briefing.
Maj. Gen. Amador Corpus, director of the PNP-Criminal Investigation and Detection Group, said most of the companies and corporations that they have operated against have initial permits from the SEC, which enabled them to be considered as a corporation.
He explained that what these firms do not have is the secondary permit, which is supposed to allow them to engage in the sale of securities.
Corpus said the PNP found documents that detailed the operations of the investment companies and corporations.
He said the documents will be used in the filing of cases against the investment companies and corporations for violation of the Securities Regulation Code.
“The SEC will file the case and we will be assisting them in the filing of cases for violation of the Securities Regulation Code,” Corpus said.
PNP Chief General Oscar Albayalde said that educating the public is a must to strengthen their campaign against companies involved in pyramid schemes.
He said the companies and corporations were allegedly luring unsuspecting victims to invest money with a promised return of 15 to 400 percent interest within a month.
“No matter who you ask, may it be the SEC, DTI (Department of Trade and Industry) or any businessman, earning 15 to 400 percent interest monthly from your invested money is impossible,” he said.
Meanwhile, the former general manager of the Metro Rail Transit, Al Vitangcol III, now acting as a lawyer for Ahon ng Kahirapan (ASK) Movement, said Kapa might file a petition with the Court of Appeals to seek the lifting of the cease-and-desist order issued by the SEC.
“All legal problems have legal remedies,” Vitangcol said.
Danilo Mangahas, ASK convenor and a Kapa member, branded the seizure and raid operations on various Kapa branches nationwide as a form of harassment.
He challenged the directive of the Department of the Interior and Local Government to cancel Kapa’s permits to operate. With PNA
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