DOJ affirms SEC’s criminal charges vs KAPA

Published October 22, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The Department of Justice (DOJ) has affirmed the findings of the Securities and Exchange Commission (SEC) and recommended the filing of criminal charges against Kapa-Community Ministry International (KAPA) for defrauding the investing public.

In a resolution issued on September 25, 2019, state prosecutors found probable cause to charge KAPA, its founder and president Joel A. Apolinario, trustee Margie A. Danao and corporate secretary Reyna L. Apolinario for violations of provisions of the Securities Regulation Code (SRC).

The DOJ also indicted Marisol M. Diaz, Adelfa Fernandico, Moises Mopia and Reniones Catubigan for promoting and participating in the unlawful public offering and/or selling of securities by KAPA.

The SEC filed a criminal complaint against KAPA before the DOJ on June 18, 2019, after uncovering the group’s unauthorized investment-taking activities.
KAPA has enticed the public to invest 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 commission said the group’s scheme involved the sale and offering for sale or distribution to the public of securities, in the form of investment contracts without prior registration with the SEC.

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 other investors. This qualifies as a fraudulent transaction prohibited under Section 26 of the SRC.

Accordingly, the Commission 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.

“The indictment of KAPA along with its founder, officers and promoters is an affirmation of our unwavering commitment to championing investors and tackling abuses in the corporate sector,” SEC Chairperson Emilio B. Aquino said.
He added, “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.”