Court freezes KAPA bank accounts, properties

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Metro Manila (CNN Philippines, June 10) — The Court of Appeals has issued a freeze order on money and properties linked to the Kapa-Community Ministry International, Inc. as authorities shut down the illegal investment scheme.

KAPA, short for Kabus Padatoon [translation: making the poor rich], poses as a religious group that has been recruiting members and asking them to donate funds to the organization. In exchange, donors are promised a 30 percent monthly return -- called "love gifts" or "monthly blessings" -- for life without doing anything else.

The Securities and Exchange Commission (SEC) announced on Monday that the court on June 4 granted a request to freeze KAPA's assets. The SEC and the Anti-Money Laundering Council filed the freeze order petition.

With the freeze order in place, KAPA and its officials cannot make withdrawals or fund transfers through the covered bank accounts.

President Rodrigo Duterte ordered the shutdown of KAPA and similar investment scams on Saturday, saying their practices were too good to be true and are clear cases of "syndicated estafa."

In a press briefing on Monday, SEC chairman Emilio Aquino said KAPA is effectively shut down after the regulator revoked its certificate of registration back in April. This followed warnings issued against KAPA since October 2018 against its "fraudulent investment scheme."

Aquino said KAPA's investment promises are "ridiculously high" and "mathematically unexplainable."

The SEC also noted that this is one of the biggest investment scams in the Philippines.

KAPA operates mainly in Southern Mindanao, but has spread out to more areas like Cebu. It accepts donations from a low of ₱10,000 to as much as ₱2 million.

Aquino said KAPA had "no substantial assets" to sustain its operations, as it had only declared ₱465,000 assets as of 2017. It did not file a financial statement for 2018.

To sustain the 30 percent payout for the minimum placement for its declared five million members, KAPA will need ₱15 billion a month or ₱180 billion yearly.

"The financial statements do not show it (KAPA) can deliver except by relying on new investors. We have put a stop to it, otherwise there will be new victims recruited," Aquino added. "Ultimately, it will collapse. It is inevitable, it is as sure as the sun will rise in the east tomorrow."

The regulator will pursue criminal charges against KAPA's officers, as well as those helping recruit members into the group.

The SEC also discovered that the supposed donations given to KAPA are not reflected in the group's bottom line, and are instead being channeled elsewhere, including luxury vehicles and insurance contracts under the name of Reyna Apolinario, the wife of KAPA founder Pastor Joel Apolinario, Aquino said.

Offices raided

Following Duterte's order, a joint team of the police and National Bureau of Investigation raided Apolinario's home in General Santos City. They also raided KAPA's offices in Taytay in Rizal, Compostela in Cebu, Tagum City in Davao del Norte, Valencia City in Bukidnon, and Opol in Misamis Oriental.

The search warrant for the raids came from the Regional Trial Court of Manila Branch 20. KAPA reportedly violated Section 26 of Republic Act 8799, or the Securities Regulation Code of the Philippines -- which referred to fraudulent transactions.

NBI agents from Rizal and Laguna found bundles of money and boxes of acknowledgement receipts -- supposed proof of KAPA's "love gifts" -- from the Taytay office.

Local police also visited KAPA's Compostela headquarters to hang a tarpaulin declaring the office closed effective immediately. This comes two days after the facility was burned down and robbed by unidentified men.

Cotabato Provincial Police Spokesperson Police Bernard Tayong said they cannot close KAPA's office in North Cotabato just yet, as they have not received an official order to shut down the establishment as of Monday morning.

Presidential Spokesperson Salvador Panelo, however, said that Duterte's word should be enough to start closing down KAPA offices.

"If the crime is being committed now, they can stop it, they can padlock that company," Panelo said in a press briefing in Malacañang.

KAPA voluntarily closed their offices for a week to observe Week of Prayer, with a prayer rally scheduled Wednesday in General Santos City.

Philippine National Police chief Oscar Albayalde said they are working with the National Bureau of Investigation to build up cases against KAPA, adding that this "may lead to an operation within the week."

Kidapawan City-based journalist Abner Francisco and CNN Philippines Correspondent Gerg Cahiles contributed to this report.