The Securities and Exchange Commission (SEC) has moved closer to putting the officers and promoters of Kapa-Community Ministry International (KAPA) behind bars with the filing of criminal charges against the scamming group.
In separate information sheets filed with the Bislig City Regional Trial Court Branch 29, the Department of Justice (DOJ) accused KAPA of “willfully, unlawfully and criminally” engaging in the selling or offering for sale or distribution of securities to the general public without a registration statement duly filed with and approved by the SEC.
The DOJ charged KAPA Founder and President Joel A. Apolinario, Trustee Margie A. Danao and Corporate Secretary Reyna L. Apolinario of violating Sections 8(8.1), 26.1 and 28 of Republic Act No. 8799, or the Securities Regulation Code (SRC).
The DOJ also indicted Marisol S. Diaz, Adelfa Fernandico, Moises Mopia and Reniones D. Catubigan for violation of Section 26.1 of the SRC for promoting the investment scam.
The DOJ further charged Diaz before the Rizal Regional Trial Court for violation of Section 28. It filed similar information sheets against Mopia and Fernandico with the Quezon City Regional Trial Court Branch 93.
The concerned judges, upon finding of sufficient probable cause for the issuance of Warrants of Arrest, shall order the arrest of the indicted officers and promoters of KAPA, in accordance with the Revised Rules of Criminal Procedure.
So far, the SEC has verified that a warrant of arrest was issued by the Quezon City Regional Trial Court on December 2, 2019 against Fernandico.
The criminal proceedings stemmed from the complaint filed by the SEC on June 18, 2019 against KAPA for the unauthorized sale or offering for sale or distribution of securities to the general public.
In a resolution issued on September 25, 2019, the DOJ found probable cause to bring charges against KAPA, affirming the findings of the SEC.
The Commission found KAPA to have enticed the public to invest at least P10,000 in exchange for a 30% monthly return for life, without having to do anything other than invest and wait for the payout.
The SEC also found KAPA to have employed a Ponzi scheme, an investment program that offers impossibly high returns and pays investors using the money contributed by later investors.
Under Section 8(8.1) of the SRC, securities shall not be sold or offered for sale or distribution within the Philippines without a registration statement duly filed and approved by the SEC.
Section 26.1 further provides that it shall be unlawful for any person, directly or indirectly, in connection with the purchase or sale of any securities to employ any device, scheme, or artifice to defraud.
Section 28 adds that no person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered with the SEC.
The SEC initially issued an advisory against KAPA in March 2017. It would later issue a cease and desist order on February 14, 2019 and an order of revocation of the KAPA’s certificate of incorporation on April 3, 2019.
In the interest of affected investors, the Commission, through the Anti-Money Laundering Council, likewise obtained a freeze order from the Court of Appeals on June 4, 2019 to preserve assets linked to KAPA.
Meanwhile, the SEC reiterated its advice for the general public to exercise more caution and discernment as certain supporters and promoters of KAPA peddled false information about the group’s supposed revival.
Only recently, the Commission called out Roger Abing Camingawan and Daniel Flash Villas for falsely claiming, in paid radio broadcasts from General Santos City, that KAPA successfully registered as a crowdfunding entity, pursuant to SEC Memorandum Circular No. 14, Series of 2019, among others.
KAPA, through its counsel on record, earlier disclaimed authorizing the publication of such false claims on social media and noted that only Catubigan and Ronnie Garay may speak on behalf of the group.
“We are committed to see the criminal proceedings against KAPA through to the end,” SEC Chairperson Emilio B. Aquino said. “We will pursue everyone involved in the investment scam that played havoc with the future of our fellow Filipinos, including those who continue to attempt to perpetuate it.”
A person found to have violated the SRC, or the relevant rules and regulations promulgated by the SEC, will face a maximum fine of P5 million or imprisonment of 7 to 21 years, or both.
Considering the use of Facebook and YouTube in the illegal investment scheme, the DOJ recommended that the penalty to be imposed against KAPA, its officers and agents be one degree higher than what is prescribed by the SRC, pursuant to Section 6 of Republic Act No. 10175, or the Cybercrime Prevention Act of 2012.
The SEC has secured convictions under the SRC since its enactment in July 2000.
In November 2015, for instance, the Makati City Regional Trial Court Branch 56 convicted spouses Saturnino and Rosario Baladjay, who operated a pyramiding scam through Multitel International Holdings, Inc., of 65 counts of violation of Section 8 of the SRC.
The court sentenced the Baladjays to serve seven years in jail for each count of violation for a total of 455 years and ordered them to pay the complainants a total of P8 million. In addition, Rosario was sentenced to suffer life imprisonment in a separate conviction for syndicated estafa, affirmed by the Supreme Court in July 2017.