Masterminds of Kapa Community Ministry International, Inc., considered one of the biggest investment scams in the country’s history, were found guilty of swindling money from its investors.
The Securities and Exchange Commission (SEC) in a statement sent over weekend said KAPA founder Joel Apolinario was found guilty of estafa following a complaint filed by one of its investors in Cebu, who did not receive the promised interest for his P500,000 investment.
In a decision dated January 19, the 7th Municipal Circuit Trial Court Liloan-Compostela sentenced Apolinario and KAPA’s officer-in-charge in Cebu, Christopher D. Abad, to suffer imprisonment of up to one year and one day for violating Article 315, paragraph 2(a) of the Revised Penal Code.
The court also directed Apolinario and Abad to pay complainant Kenneth A. Gabuya actual damages amounting to P500,000.
Last year, Branch 33 of the Regional Trial Court of Butuan City also sentenced Apolinario and KAPA leaders Cristobal R. Baradad and Joji A. Jusay to suffer life imprisonment for eight counts of syndicated estafa.
In the case, the court held that Apolinario and Abad enticed Gabuya to invest in KAPA in exchange for a monthly interest rate of 30 percent called “blessing,” despite knowing that the group has no paid-up capital and has no clear source of profit to meet their promise to investors.
Through such false pretense or misrepresentation, Gabuya invested P500,000 on May 24, 2019, and had suffered damages as he did not receive the guaranteed interest following KAPA’s closure.
“It is clear that both [Apolinario and Abad] participated in the deceptive scheme to solicit money from a private complainant in exchange for a promised high return of investment cleverly called ‘blessings,’” the court held.
The court also affirmed that KAPA engaged in a Ponzi scheme, a type of fraud that involves using the investments of new investors to pay existing investors their purported returns.
“It is not an investment strategy but a gullibility scheme, which works only as long as there is an ever-increasing number of new investors joining the scheme,” the court said.
SEC issued advisories against KAPA as early as March 2017, for soliciting investments worth as low as P10,000 in the guise of donations, without the necessary requirements from the SEC.
This is in violation of Republic Act No. 8799, or the Securities Regulation Code, which requires that securities, including investment contracts, must be registered with the SEC before they can be offered to the public.
The SEC later issued a cease-and-desist order on February 14, 2019, and an order of revocation of KAPA’s certificate of incorporation on April 3, 2019.
