The Court of Appeals (CA) has declared valid the 20 search warrants issued by the Manila regional trial court (RTC) against officers and members of the Kapa-Community Ministry International, Inc. (KAPA) for alleged involvement in the reported P50-billion Ponzi investment scheme.
With declaration of the validity of the search warrants, the National Bureau of Investigation (NBI) can now continue, without legal impediment, on its probe on KAPA.
Google says “a Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk.”
The CA ruling was contained in a decision written by Associate Justice Mary Charlene Hernandez Azura. It dismissed the petition filed by KAPA through its representative Pastor Joel Apolinario.
The validity of the search warrants was elevated to CA after the Manila RTC denied KAPA’s motion to reconsider the trial court’s ruling that denied the quashal of the warrants which covered KAPA’s offices in Quezon City, Sarangani Province, General Santos City, Taytay in Rizal, Compostela, among other places.
The warrants were issued on the petition of the NBI based on the complaint filed by the Securities and Exchange Commission (SEC) in 2019.
SEC charged KAPA members and officers of alleged violations of Sections 8 and 26, in relation to Section 73, of the Securities Regulation Code (SRC) and eight counts of syndicated estafa as defined and penalized in Presidential Decree 1689.
Section 8 of SRC provides 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,” while Section 26 prohibits a Ponzi type of investment scheme as it considers it as a fraudulent transaction.
In filing the complaint, SEC acted on complaints from KAPA investors who claimed they were duped by its officers into investing their hard- earned money with guaranteed high returns of at least 30 percent a month.
SEC told the NBI that based on records, KAPA has no license or permit to sell or offer for sale, or distribution of securities within the Philippines as certified to by the SEC’s Markets and Securities Regulation Department (MSRD), the Corporate Governance and Finance Department (CGFD) and the Company Registration and Monitoring Department (CRMD).
In seeking search warrants, the NBI said that a team of its agents went to KAPA offices to investigate and conduct case build-up and personally witnessed the pyramiding activities of KAPA.
The NBI also said that its agents acted as poseur investors to fully verify the illegal activities of KAPA.
In seeking the nullity of the warrants, KAPA claimed there was lack of probable cause since the evidence presented were mere “hearsay” and that the places to be searched and things to be seized were not specified in the warrants.
The CA ruled that in special criminal cases, a trial court is authorized to issue search warrants outside of its territorial jurisdiction pursuant to administrative guidelines issued by the Supreme Court (SC).
It pointed out that the issuance of a search warrant in places outside of the jurisdiction of a trial court to prevent leakage of information.
“The trial court made a careful examination of all the documents submitted before it and propounded probing questions to the witnesses from respondent NBI and SEC investigating teams, who then testified based on their personal knowledge obtained during their investigation and surveillance operations,” the CA said.
“Their personal knowledge is more than enough to sustain a finding of probable cause for the issuance of the subject search warrants,” it stressed.
It said that the NBI was able to describe sufficiently the places and things to be searched and seized.
“The machines, computer sets, laptops, cellular phones, electronic gadgets, equipment, and paraphernalia, as well as the vehicles, motorcycles, and other means of transportation, are means or tools used in ensuring the commission of the offenses under Sections 8 and 26 of the SRC,” it also said.