The SEC lodged the complaints before the Department of Justice (DOJ), putting in as respondents Apolinario, trustee Margie Danao, corporate secretary Reyna Apolinario, Marisol Diaz, Adelfa Fernando, Moises Mopia, Catherine Evangelista, and Rene Catubigan.
The SEC accused the Kapa officers of violating Sections 8, 26, and 28 of the SRC or Republic Act No. 8799.
"A person found to have violated the SRC, or the relevant rules and regulations promulgated by the SEC, will face a maximum fine of P5 million or imprisonment of 7 to 21 years, or both," the SEC said.
The cited sections deal with the rules on selling or distributing securities in the Philippines, setting requirements such as registration and prior approval of the commission.
The SEC categorized Kapa's investment scheme as dealing securities without complying with the law.
"The investment scheme operated by Kapa 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," said the SEC.
The Court of Appeals has since frozen Kapa's assets following a petition by the SEC and the Anti-Money Laundering Council.
The commission found Kapa to be recruiting members to donate a minimum amount of P10,000 in exchange for a 30% monthly return for life, a clear Ponzi scheme according to the SEC.
While the SRC provides for imprisonment of 7 to 21 years for violators, the SEC wants to impose a one degree higher penalty as it considers the case to also be a violation of the anti-cybercrime law, "considering the use of Facebook and YouTube" in the illegal scheme.
The DOJ earlier issued an immigration lookout bulletin order against Apolinario and 14 others. – Rappler.com