KAPA 'donors' can pray to court to get money back
MANILA, Philippines — Hoping for a better life, members of non-stock and independent religious corporation KAPA Community Ministry International, Inc. donated their money expecting to receive a return in “blessings”.
But donors are now uncertain whether they can still get their money back amid accusations that KAPA orchestrated a fraudulent investment scheme.
Calling on the government to reverse its actions against their organization, thousands of KAPA members held prayer rallies across the country last month. But the plea seemed to have fallen on deaf ears, with the National Bureau of Investigation filing syndicated estafa and other raps versus KAPA’s founder and officials.
NBI files syndicated estafa raps vs KAPA founder, others
Meanwhile, the Court of Appeals — acting on a petition filed by the Securities and Exchange Commission and the Anti-Money Laundering Council — issued a freeze order on several banks accounts and other assets linked to KAPA.
With its assets frozen, KAPA will no longer be able to give investors the returns they were promised.
Can donors still get their money back?
KAPA stands for Kabus Padatoon, which is Bisaya for "make the poor rich." But authorities warned it will actually not do that.
The SEC explained that KAPA’s activity constituted a “Ponzi” scheme, an investment program that offers impossibly high returns and pays investors out of capital contributed by newly recruited members.
Comments online from people claiming to be members have raised that KAPA's "donors" are not complaining and that the ministry should be given a chance to just return the money to members who want their "donations" back.
But it will not be that simple.
EXPLAINER: Too good to be true: Why the government is shutting KAPA down
In an interview with CNN Philippines last month, Justice department spokesperson Markk Perete said the government can’t guarantee KAPA members a refund.
“That would really depend on the liquidity of the company at the time it may be ordered to return,” Parete said.
But according to corporate regulators, KAPA’s investment scheme is “unsustainable.” Without recruiting new members or soliciting more investments from the public, KAPA’s pooled funds will not last beyond three months, the SEC said.
The Aman Futures case
Many watchers have qualified that KAPA’s case brings to mind the multibillion-peso scam involving Aman Futures Group Philippines, Inc. — which has been tagged as one of the biggest scams in the Philippines.
The Aman Futures scandal was exposed in October 2012 after the firm was accused of siphoning as much as P12 billion from some 15,000 investors — mostly farmers, fisherfolk, government employees and market vendors, among others.
According to reports, Aman Futures had promised its investors a 30%-40% return on investment within eight days and a 50%-80% return after 18 to 20 days.
It turned out, though, that early investors were allegedly being paid using the contributions of new members. The scam collapsed when Aman Futures ran out of money to pay its members the promised profits.
Victims then filed charges of syndicated estafa. The Court of Appeals issued a freeze order on all bank accounts and finance companies linked to Aman Futures.
BusinessWorld reported in 2016 that investors—particularly Fabian Tapayan, a complainant in a syndicated estafa case related to the scam—had yet to recover their investments.
Class suit an option
To recover the donors’ investments, the SEC and Malacañang said investors may file a class suit against KAPA.
Under the Rules of Court, the requisites of a class suit are:
- The subject matter of controversy is one of common or general interest to many persons;
- The parties affected are so numerous that it is impracticable to bring them all to court; and
- The parties bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned.
However, media reports say only the NBI—and three investors who have come forward—have so far filed a complaint against KAPA.
Quoting NBI Regional Director Patricio Bernales, Sun.Star reported on June 11 that while investors may sue KAPA, their money will not be returned immediately as “it will form part of the evidence” against the group. — With a report from BusinessWorld