The Securities and Exchange Commission (SEC) said it has secured more than P100 million worth of assets linked to Kapa Community Ministry International, Inc. (KAPA) under a freeze order issued by the Court of Appeals.
SEC in a statement said it will pursue more assets sourced from the investment scam perpetrated by KAPA.
Through the Anti-Money Laundering Council (AMLC), the SEC obtained the freeze order last June 4 in an effort to protect the interests of investors duped by KAPA.
Several banks have initially frozen more than P100 million following the issuance of the freeze order, which also covers insurance policies, cryptocurrency holdings and other assets linked to KAPA.
However SEC said public records show at least nine luxury cars and sports utility vehicles, along with a helicopter, are registered under the name of KAPA and its officers.
KAPA also claims to have acquired a hospital, a school and other properties.
Under Section 10 of Republic Act No. 9160, or the Anti-Money Laundering Act (AMLA) of 2001, as amended, the CA may issue a freeze order upon a verified ex parte petition by the AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity.
Section 12 of AMLA also empowers the AMLC to move for the forfeiture of any monetary instrument or property related to an unlawful activity or other monetary instruments or properties with equivalent value. The forfeited assets may accordingly be distributed to affected investors.
“KAPA amassed wealth through an investment scam, in the guise of religion and at the expense of the investing public,” SEC Chairman Emilio B. Aquino said.
“We cannot simply wait for the fraudulent investment scheme to crumble and for the investors to suffer before we take action.”
The SEC issued an advisory against KAPA as early as March 2017. It would later issue a cease and desist order on Feb. 14 and an order of revocation of the non-stock corporation’s registration on April 3.
KAPA was found to have recruited and encouraged members to “donate” at least P10,000 in exchange for a 30 percent monthly return on investment for life, without having to do anything other than invest and wait for the payout. Such a scheme constituted the sale and offering of securities, in the form of investment contracts.
SEC said KAPA also employed a Ponzi scheme, an investment program that offers impossibly high returns and pays investors using the money contributed by other investors. Such a scheme qualifies as a fraudulent transaction prohibited under Section 26 of the Securities Regulation Code.
“KAPA violated the law and must now face the consequences of its actions. Any and all persons behind and involved, in one way or another, in the investment scam will be prosecuted and held criminally liable,” Aquino said.
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