THE DEPARTMENT of Justice (DoJ) found probable cause to criminally charge Kapa-Community Ministry International, Inc. (KAPA) for operating an investment scam.
Corporate regulator Securities and Exchange Commission (SEC) said in a statement yesterday a Sept. 25 resolution by the DoJ saw violations by KAPA of the Securities and Regulation Code (SRC).
The violations were on Section 8 (8.1), which requires securities to be registered in the SEC to be sold; Section 26.1, which prohibits the use of schemes to defraud; and Section 28, which requires brokers and dealers to be registered with the SEC to buy and sell securities.
The resolution identified KAPA founder and president Joel A. Apolinario, trustee Margie A. Danao and corporate secretary Reyna L. Apolinario as among those that may be charged for violating the law. It also named Marisol M. Diaz, Adelfa Fernandico, Moises Mopia and Reniones Catubigan, whom it said were engaged in the illegal selling of securities by KAPA.
In a separate statement, DoJ Undersecretary Markk L. Perete said the scheme KAPA employed is a “classic Ponzi scheme considering the impossibly high yields of return promised to investors.”
“(The Panel) rejected respondents’ argument that such investments were in the nature of religious donations, pointing out that the promise of return negates the giver’s liberality that is the hallmark of every donation,” he added.
SEC Chairperson Emilio B. Aquino noted the indictment of KAPA and the people behind it “is an affirmation of our unwavering commitment to championing investors and tackling abuses in the corporate sector.”
The SEC filed a criminal complaint against KAPA with the DoJ in June, which trailed a history of its own investigations on the organization’s investment schemes. It first issued an advisory against KAPA in March 2017, until the issue grew bigger over the two years that followed, leading to a cease and desist order in February and a revocation of its certificate of incorporation in April.
“This should also serve as a stern warning against other groups engaging in unlawful investment-taking activities and other predatory practices to the detriment of the investing public,” Mr. Aquino added.
The SEC said KAPA operates by collecting investments of at least P10,000, which it guises as “donations,” in exchange for a 30% “blessing” or “love gift” every month, for life. This happens even as the investors have to do nothing but wait for the returns.
The SEC flagged this as an investment contract, as defined in the SRC, therefore a separate registration should have been obtained from the Commission to legalize the activity.
Violation of the SRC is subject to a penalty of a maximum P5-million fine or imprisonment of seven to 21 years, or both.
KAPA was sought for comment through its Facebook page on the DoJ resolution, but did not respond as of press time.
Last month, the SEC warned the public that KAPA is returning to operations as KAPA Worldwide Ministry Association. At the time, KAPA is alleged to have collected about P50 billion — based on its supposed 5 million members and the minimum investment of P10,000 per head. — Denise A. Valdez