By Beting Laygo Dolor i Contributing Editor
The Securities and Exchange Commission (SEC) filed a complaint of syndicated estafa against the Kapa Community Ministry before the Department of Justice last week, accusing the Mindanao-based organization of defrauding its members through an “investment program” which turned out to be a pyramiding scam, a.k.a Ponzi scheme.
The Ministry was ordered to cease operations on orders of President Rodrigo Duterte following complaints from some of its former members that they had been defrauded of what they believed were valid investments.
The President ordered the closure two weeks ago, after which thousands of members of the Ministry held prayer rallies in General Santos City asking Duterte to rescind his order, to no avail.
GenSan was the site of the biggest rally, where an estimated 100,000 to 150,000 showed up.
Over the weekend, smaller rallies were held by Kapa members in different parts of the country, mostly in Mindanao.
They blamed the Duterte administration of denying them their freedom to practice their religion as guaranteed by the Constitution.
Members of the Ministry may have lost as much as PHP50 billion (about US$1 billion), based on estimates by the SEC.
Charged with fraud were Kapa Ministry founder and President Joel Apolinario, Corporate Sec. Reyna Apolinario, and trustee Margie Danao.
Duterte described Apolinario as a “con artist.”
The SEC said the scam perpetrated by the accused was one of the biggest in the Philippines. Anyone wishing to join the Ministry had to first “donate” PHP10,000 (approximately US$200), after which he or she would receive a monthly interest of 30 percent.
The SEC froze PHP100 million of the Ministry’s assets.
The SEC complaint said the Ministry “amassed wealth through an investment scam in the guise of religion and at the expense of the investing public.”
The Kapa Community Ministry claims to have five million members, including Filipinos working overseas.
The National Bureau of Investigation (NBI), however, has been having a hard time convincing more members to file a suit against what the members insist is a “religious ministry.”
An NBI regional officer assigned to the case said the members were “hoping against hope” that the organization would be allowed to resume operations, adding that most “refused to antagonize” officials of Kapa.
Most of the current or former members who have approached the NBI did not want to file a complaint against the ministry, only wanting to recover their “love donations.”
Based on records, Kapa founder Apolinario began his adult life as a fisherman, construction worker, and disc jockey then began his ministry in Bislig, Surigao del Sur, before moving his operations to General Santos City.
Kapa does not have chapels or churches but rather offices where donations are accepted.
He is known to move around the city in a big bike or chopper, and his Ministry is known to own a helicopter.
In the Philippines, pyramiding scams sporadically appear, mostly in provincial areas. At the same time, religious organizations are exempt from paying taxes.
In the case of Apolinario’s organization, it is registered with the SEC under the name Kapa Community Ministry International, Inc., making it a private corporation and thus subject to government audit.
As with all Ponzi schemes, the Kapa Ministry allegedly offered impossibly high interest earnings albeit under a different guise. The earnings came from the investments or donations of new members.
The scheme collapses when no new members join the organization.
As of this writing, Apolinario was still in hiding, addressing his followers through video messages over social media. The crime of syndicated estafa is a non-bailable offense.
Aside from the case already filed against him, Apolinario may also be charged with securities violations for operating without a license to sell securities.