SEC files criminal raps against HPI ‘pyramiding’ group

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 is believed to be a “pyramiding” scam.

The SEC through its Enforcement and Investor Protection Department filed on Tuesday the 35-page complaint-affidavit at the Department of Justice against the HPI Group as its investigation showed that the group had been soliciting investments that promise to yield as much as 30-35 percent within 40-50 days.

HPI and its related companies and their officers were accused of violating the securities law which prohibits the sale of unregistered securities as well as selling without registration as brokers, dealers, salesman and associated persons.

The group was accused of using the pyramiding scheme, an investment fraud which rewards participants by recruiting other people, in which case only those on top makes money. The selling point is that the participant can make more money by bringing more people into the net. Such schemes are seen as inherently injurious to consumers because as a mathematical certainty, the pyramid is going to collapse.

Typically, a pyramiding scam is masked by layering the investment with products without much value like soaps or lotions, which participants typically do not want or need. In the case of HPI, participants are given facial masks, an eco bag and “business codes” which supposedly allow them to monitor online their investments.

Under the law, the violations cited by SEC are punishable by fine of no less than P50,000 and no more than P5 million or imprisonment of not less than seven years and no more than 21 years.

Apart from HPI, the following entities and individuals were slapped with the criminal complaint: 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, with offices both located at 301 Cabrera Building, Timog Avenue, South Triangle Quezon City, are both registered at the SEC 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.

Apart from receiving complaints from investors, the SEC formed and sent an investigative team to go to the HPI office pretending to be interested investors and found out they were offering several packages where an investor can invest money and earn high profit share in a span of 40 to 45 days. The “business” packages are worth as low as P7,350 (bronze) to as high as P268,000 (platinum). Earnings are distributed via a reward system which focuses more on investment-taking and not on the underlying products.