MANILA, Philippines – Kapa-Community Ministry International's bank accounts and assets were ordered frozen by the Court of Appeals (CA) over allegations that it operated the largest investment scam in recent Philippine history.
The appellate court issued the freeze order last Tuesday, June 4, upon the petition of the Securities and Exchange Commission (SEC) and the Anti-Money Laundering Council.
The CA said it found probable cause that the organization was involved in unlawful activity.
Among the unlawful activities covered by the Anti-Money Laundering Act are fraudulent practices and other violations under the Securities Regulation Code.
The SEC previously revoked Kapa's certificate of incorporation for serious misrepresentation.
The commission found Kapa recruiting members to donate a minimum amount of P10,000 in exchange for a 30% monthly return for life.
SEC Chairman Emilio Aquino said on Monday, June 10, that Kapa was engaged in a Ponzi scheme, an investment program that offers ridiculously high returns and pays investors through the capital contributed by later investors.
Aquino said Kapa will eventually run out of cash, with the last investors to suffer the most.
"As sure as the sun will rise in the east tomorrow, they will never be able to sustain that, especially with a 30% return per month for life," the SEC chairman said.
Kapa will need P15 billion a month to pay its alleged 5 million members, who have contributed at least P10,000 each. Without recruiting new members or soliciting more investments from the public, the pooled funds would not last beyond 3 months.
Aquino said the Kapa scheme is the biggest investment scam in recent history since the Aman Futures Group pyramid scam. (READ: Timeline: The Aman Futures pyramid scam)
Aquino said Kapa has no means of sustaining its operations, as it had assets of only P465,000 as of 2017.
Kapa is headed by pastor Joel Apolinario, who is based in Bislig City, Surigao del Sur.
Kapa registered with the SEC as a non-stock and independent religious corporation. Its registration explicitly stated that it is not authorized to undertake business activities unless it secures a secondary license.