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ASU tags 42 companies as investment schemes

Forty-two companies here have been tagged as high-yield investment schemes (HYIS) by the city’s Anti-Scam Unit (ASU).

A HYIS is a fraudulent investment scheme that purports to deliver extraordinarily high returns on investment to lure in victims. The scheme usually requires persons to make investments of money in a common enterprise with expectation of profits to be derived primarily from the efforts of others.

In a letter to Mayor Sara Duterte dated Feb. 10, ASU head Simplicio Sagarino Jr. said they received a total of 2,496 reported cases of fraud since 2016.

“Various investment schemes in Davao City and some of its adjacent cities in Mindanao (were) found to be fraudulent by this office in its initial case build-up,” Sagarino said.

He said they have referred the cases to the Criminal Investigation and Detection Group (CIDG) XI, the Investigation Division and Management Branch (IDMB), and the National Bureau of Investigation (NBI) XI.

Sagarino said there were 1,761 reported cases in 2016; 24 cases in 2017; 33 in 2018; 576 in 2019; and 62 reported as of January this year.

Immediately upon receiving fraud report, Sagarino said the ASU would conduct surveillance on the complained individuals and groups to confirm their modus operandi.

Once confirmed, the ASU head said they make close coordination with the other investigating agencies so criminal cases will be filed in court.

According to the ASU, the violation of these investment companies is that they are not registered with the Security and Exchange Commission (SEC) or do not have a secondary license authorizing them to deal in regulated activities in issuing, brokering, or dealing in these high-yield investment schemes.

These companies have not shown that the schemes are “Exempt Securities,” and they can’t provide proof or SEC confirmation that the issuance, brokering, or dealing of these schemes are catergorized as “Exempt Transactions.”

Exempt securities are those financial instruments generally backed by the government that do not need to be registered with the SEC, with tax-exempt status.

Exempt transactions, on the other hand, are those transactions where a business no longer needs to file registrations with any regulatory bodies as long as there is “relatively minor number of securities involved.”

The ASU pointed out that “they seriously misrepresent that they can solicit investments from public knowing that they do not have requisite registration or secondary license, which acts are indicative of their intent to deceive the public on what they can do or is doing to damage and prejudice of the investing public.”

These companies were said to have engaged in “ultra-vires act of corporation” as the solicitation of investment money from the public is not one of the purposes for which these corporation were formed.

Moreover, the SEC itself has issued advisories finding these high-yield investment schemes to have been engaged or are about to engage in fraudulent transactions, and some were also issued the corresponding Cease and Desist Order (CDO).

The high-yield investment schemes tagged by the ASU proliferating in the city and neighboring areas in Mindanao are:

KAPA Community Ministry International, Rigen Marketing, A21 Marketing, Dreamers, Dreamzion, Diamond Essential Products, Eden Marketing, King Elise Marketing/Network Solutions, Casino Financing, Crowd Royal, Dragon One, Genesis Company, Gold Skin and Health International, JACAMA Sales and Marketing, Jogle Innovative Marketing, LSM Wellness Product Trading, Davao Ponciano Cooperative, Credit Multi-Purpose Cooperative (CPMC), Shoppers Circle, PEDVEL/PEDCO, Global Intergold (Online), ENCO, Ever Arm Marketing, Gambaro Trading & Consultancy, Jogle Innovative Marketing, JY Marketing, LUCKY 9, Majestic Point Marketing, Nermie Health and Beauty Products Trading, Omega Trading, Premier Oil PLC/JMACl, Crowd Funding, Skinline, Snapcash, Sovereign Success Business Company, Tagum Pay, Triple 8 Trading, United Program, Victorious Mortuary & Allied Services, GILDASH Investment, Global Fusion Network, and High Class Trading.

Sagarino has urged the public not to engage in any transactions with these investment schemes.

“If there are any investment schemes that you suspect to be illegally soliciting, report it immediately to authorities,” he said.

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