The Justice department has recommended the filing of criminal charges against the independent religious corporation Kapa-Community Ministry International or Kapa for defrauding the investing public.
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The department made its recommendation as it affirmed the findings of the Securities and Exchange Commission against the company.
In a resolution issued on Sept. 25, state prosecutors found probable cause to charge KAPA, its founder and president Joel Apolinario, trustee Margie Danao and corporate secretary Reyna Apolinario for violating Sections 8 (8.1), 26.1, and 28 of Republic Act 8799, or the Securities Regulation Code.
“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 chairman Emilio B. Aquino said.
“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.”
The Justice department also indicted Marisol Diaz, Adelfa Fernandico, Moises Mopia and Reniones Catubigan for promoting and participating in the unlawful public offering and/or selling of securities by Kapa.
On June 18, the SEC filed a criminal complaint against KAPA before the department after uncovering the group’s unauthorized investment-taking activities.
Based on the SEC’s findings, Kapa 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 investing and waiting for the payout.
The group’s scheme involved the sale and offering for sale or distribution to the public of securities in the form of investment contracts as defined under Section 3 of the SRC, according to 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.
The SEC initially issued an advisory against KAPA in March 2017. It would later issue a cease-and-desist order on Feb. 14, and an order revoking KAPA’s certificate of incorporation on April 3, 2019.
To protect the investors, the SEC, through the Anti-Money Laundering Council, likewise obtained a freeze order from the Court of Appeals on June 4, to preserve the assets linked to Kapa. With Rey E. Requejo
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