The Securities and Exchange Commission has filed a criminal complaint against the Hyper Program International Direct Sales and Trading Corp. (HPI) and its affiliate companies, incorporators and officers for illegally selling securities under what was believed to be a “pyramiding” scam.
The SEC, through its Enforcement and Investor Protection Department, filed on Tuesday the 35-page complaint-affidavit in the Department of Justice against the HPI Group as its investigation showed the group had been soliciting investments that promised to yield as much as 30-35 percent within 40 to 50 days.
HPI, its affiliates and their officers were accused of violating the securities law that prohibited the sale of unregistered securities and selling without registration as brokers, dealers, salesman and associated persons.
The group was said to be engaged in a pyramiding scheme, an investment fraud that rewarded participants for recruiting people into the network.
The scheme is seen inherently injurious to consumers because as a mathematical certainty, the pyramid will eventually collapse.
Typically, a pyramiding scam is masked by layering the investment with products without much value. In the case of HPI, participants are given facial masks, an eco bag and “business codes” that would supposedly allow them to monitor online their investments.
Under the law, the violations cited by the SEC are punishable by fine of no less than P50,000 but no more than P5 million or imprisonment of not less than seven years but no more than 21 years.
Apart from HPI, others named in the criminal complaint are: HPI Direct Sales and Trading Corp. (HPI Direct), Hyper Program International Holdings Corp., Business Icon Premier Trading Inc., Darlito Dela Cruz, Queen Ashley Ablan, Pablito Andal, Aida-Lyn Gabriel, Arleen Dela Cruz, Angelita Basbas, Mary Jane Terrible, Ernesto Lee Pineda Jr., Bernadette Villapaz, Jasem An Vienice Ella, Irene Mercado, Ian Manguera, Mark Anthony Ballesteros, Antony Purganan, Maytham Mutadha Akbar Abbas, Mohammad Murtadha Akbar Abbas, Mark Levonne Cortado, Marlon Bathan Muya, Tom Arthur Dela Cruz, Jeaun Christopher Tolsa, Jenn Santos and several Jane and John Does.
HPI and HPI Direct are both SEC-registered but they do not have license to sell investment securities. Most of the individuals named in the complaint are incorporators or officers of HPI-related firms.
The SEC had formed and sent an investigative team to go to the HPI office pretending to be interested investors and found out the company was offering several investment packages that promised high returns within 40 to 45 days. The “business” packages are worth P7,350 (bronze) to P268,000 (platinum).
The complaint also noted that the group’s website www.hpidirectsales.ph also pitched a project that promised a return of P1 million for an investment of P50,000 in “12 cycles.”
On Nov. 5, 2015, the SEC issued a cease-and-desist order against HPI and HPI Direct, after which the SEC said more complainants had come forward. It appeared, however, that the same group used other entities such as Business Icon Premier and HPI Holdings to continue their scheme.