Corporate Securities Info

Innovative Ponzi scheme

Today’s scam artists have become more creative in their promotional activities and choice of target.

Kapa Community Ministry International, a religious group that traces its roots to Mindanao, has been ordered closed and its assets seized by the Securities and Exchange Commission (SEC) for allegedly engaging in an investment scam.


In a complaint filed with the Department of Justice, the SEC said Kapa solicited investments from its members in the guise of donations with the promise of paying 30-percent monthly interest.

Kapa has denied the accusation and stated the donations were voluntarily given without any payback promise. And that the benefits, in cash or in kind, the members receive after making the donations are “love gifts” sourced from the organization’s collective efforts.


The “donation and love gift” concept seems to be the latest version of the Ponzi scheme in the country. This time, it’s being done under the auspices of a religious organization and verses in the Bible are invoked to justify the donations.

Noticeably, none of the Kapa members have, to date, come out in public to validate or bear witness to the SEC’s complaint.

The refusal to cooperate may be interpreted as an endorsement of their spiritual leader’s claim that their donations are consistent with their religious beliefs and not meant to rob them of their money.

In the past, investment solicitations were linked to gold or silver certificates, dormant Swiss bank deposits, commodities futures, untapped oil reserves and other sources of income that supposedly assure lucrative rates of returns to investors.

The scammers’ targets then were people in Metro Manila and other urban areas who had substantial disposable income and were unsatisfied with low interest rates on bank deposits.

When things got hot in those places, the con artists brought their wheeler dealing to the provinces and took advantage (and continues to do so) of the gullibility of many of our countrymen.

Last week, with the Kapa problem still in the news, a Davao Del Norte-based company named Enterprise Co. was reported to have engaged in an investment scam that promised 300-percent interest on investments in foreign exchange transactions payable in 20-day intervals.


The company president is believed to have absconded with P80 million in investments and is nowhere to be found like the Kapa spiritual leader.

It’s a puzzler that these scams continue to proliferate and reach staggering amounts despite the government’s repeated warnings against too-good-to-be-true investment schemes.

From the looks of it, the cautionary notices are either not being heard or listened to by their intended audience, or something is lost in the transmission of the message through the traditional media and lately, social media.

Sociologists attribute the “success” of investment scams even in the face of government’s concerted actions to stamp them out to a human trait: greed.

The desire to get rich fast and with the least effort makes many Filipinos lower their guard when glib con artists present them with financial or investment arrangements that can supposedly help make that happen.

Some years ago, a victim of an investment scam was asked in a TV interview why she continued to invest in spite of warnings.

She said she took the risk because the promised returns were very attractive and (this takes the cake) she did not want to be left behind by friends who were getting rich from the scam.

In other words, greed and envy made her throw all caution to the wind. So how do you argue against that reasoning?

The challenge to the government under these circumstances is how to overcome or reorient that human element and make the public aware that it is in their best interests to stay away from get-rich-quick schemes and instead invest their extra income in safe investment accounts.

So now religion appears to be the latest vehicle for a Ponzi scam? What’s next? Cure for cancer? LGBT-oriented products? Age retardation drugs?

A proactive, not reactive or catch-up, approach is needed to keep scam artists at bay.

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TAGS: Business, Kapa Community Ministry International, Ponzi scheme
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