Kapa investment scam

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

The Kapa investment scam (Tagalog: [ˈkapa]) was one of the biggest financial investment fraud scandals in Philippine history. An estimated five million people were duped by the religious company Kapa-Community Ministry International, which promised a 30% monthly return on investments for life. Kapa started in 2016 as Kapa Coop Convenience Store and General Merchandise in the city of Bislig, founded by Joel Apolinario. The City Economic Enterprise Department (CEED) shut down the business for failing to comply with some provisions.[example needed] In August 2017, Apolinario was charged with 102 cases for not settling claims; 27 arrest warrants were issued. However, all the cases were dismissed with the complainants compensated. Apolinario's company moved south, becoming Kapa-Community Ministry International. The company enlisted new recruits, who became member-donors and in turn recruited new members. On June 8, 2019, Philippine President Rodrigo Duterte ordered the corporation to be shut down over the scheme.[1][2]

Background[edit]

The founder of Kapa, Joel Apolinario, formerly worked as a DJ and technician at a radio station in Bislig, Surigao del Sur, for ten years. In the same city, he started an investment firm that provided funding to poor people.[3][4] According to members of Kapa, Apolinario is a native from Hinatuan, Surigao del Sur, where he lived as a fisherman and a construction worker in his early life.[5] Since then, people started to send donations to Apolinario. When numerous people began donating, Apolinario resigned from his position at a radio station and rented a small space at a feeds store,[clarification needed] where he resumed his business.[4] On September 2016, he obtained a business permit from the local government of Bislig to establish a company named "Kapa-Co Convenience Store and General Merchandise". He renamed the establishment to "Kapa-Community Ministry International Inc." in March 2017. In February 2017, the local government discovered that the establishment promised 30% interest per month to those who received "blessings" from donations.[4] Apolinario and his family then moved to the city of General Santos, leaving their house to be temporarily occupied by a friend. Some Kapa members claimed that because of the blessings, their businesses flourished. Conversely, a friend of Apolinario's claimed that he never received a full refund of his donation after Apolinario moved to General Santos; he was one of the first people to file charges against Apolinario for fraud.[4] Kapa was reported to have 10,000 members in the province of Davao del Norte alone.[6]

Events[edit]

The Securities and Exchanges Commission (SEC) filed criminal charges against Kapa-Community Ministry International and its executives, citing an investment scam.[7][8] President Rodrigo Duterte was the first government official to announce the legal actions, doing so on June 8, 2019 when he ordered the National Bureau of Investigation (NBI) to shut down Kapa. Duterte said that the company was "clearly a form of 'syndicated estafa [fraud].'"[7][6] Kapa claimed that it helped millions of Filipino people raise money, promising to donors that they would "be receiving 30% of the amount for life."[8][2] A criminal investigation revealed that members would have to donate at least 10000 Philippine pesos (₱; US$198) to receive the promised return.[8][9]

On June 10, the NBI raided the home of Apolinario in General Santos while he was absent.[10] It also raided 14 branches of Kapa with a warrant issued by the Manila Regional Trial Court Branch 20.[11] The Court of Appeals (CA) had already frozen the bank accounts and assets of Kapa due to the suspected scheme.[12] On June 14, the Department of Justice (DOJ) issued an immigration lookout against 15 members of Kapa including Apolinario.[13]

On June 13, a certain Xian Gaza exposed that Apolinario would escape the country with no plans of returning.[14]

On June 16, the SEC announced that over ₱100 million (US$1983981) worth of assets were linked to Kapa. The SEC cited public records that showed at least nine luxury cars, other sports utility vehicles, and still other properties were registered under Kapa and its executives.[15] It also revealed that Kapa members were promised to receive a "love gift" as the interest.[16] The SEC estimated that Kapa had invested about ₱50 billion (US$991990278) from donations from its members over the last three years.[16] Shutting down Kapa resulted in a reduction in the income of sari-sari store (similar to a general convenience store) owners, who operated outside the Kapa headquarters. Prior to the shutdown, Apolinario had transferred Kapa's headquarters to Alabel, Sarangani.[16]

On June 21, a video message posted by Apolinario stated that "he also asked the government to help Kapa return the money to its members" after the Anti-Money Laundering Council (AMLC) froze the company's accounts.[17] On the same day, Rhema International Livelihood Foundation, an alleged donor of Kapa that had been involved in an Ponzi scheme, petitioned the Supreme Court to have Duterte submitted for impeachment proceedings because he shut down Kapa. In addition, the petition urged the removal from office of SEC Chairman Emilio Aquino.[18]

On July 21, 2020, after more than six months of hiding, Apolinario and 23 of his companions were arrested by the police on an island in Lingig, Surigao del Sur after a shootout in which two of his bodyguards were killed. The police were serving the arrest and search warrants issued by the Bislig City Regional Trial Court.[19] Several firearms were confiscated from Apolinario's group, including automatic rifles, a machine gun, a sniper rifle, and two rocket-propelled grenades.[20][21]

Reactions[edit]

Kapa community members had asked President Duterte to reconsider his decision to close the organization.[10] On June 13, about 50,000 Kapa members attended the prayer rally held in Acharon Sports Complex at General Santos in support of Apolinario.[22] He later arrived in a helicopter and told the crowd that Duterte "already assured him that Kapa would continue to operate as long as it complied with government regulations."[22] Despite being faced with controversy, Apolinario and the crowd continued to support President Duterte and his family by chanting.[5] On June 20, members of Kapa held a rally in different areas in the country, urging President Duterte to re-open the establishment.[23][24] The group also added that they had "helped the poor and the Lumad."[24] On the same day, Kapa members had been reluctant to file complaints against Apolinario, stating that they did not "want to antagonize" Kapa officials and bite "the hands that [fed] them."[16] A report states that some Kapa members had urged Pastor Joel Apolinario to run in the 2022 Philippine presidential election.[25]

See also[edit]

References[edit]

  1. ^ "[ANALYSIS] Kapa Ministry: A symptom of poor financial inclusion". Rappler.
  2. ^ a b "Too good to be true: Why the government is shutting KAPA down". The Philippine Star. 11 June 2019. Archived from the original on 13 June 2019. Retrieved 21 December 2019.
  3. ^ "Sino si Pastor Joel Apolinario ng Kapa Ministry?" [Who is Pastor Joel Apolinario of Kapa Ministry?]. ABS-CBN News (in Tagalog).
  4. ^ a b c d "KILALANIN: Tagapagtatag ng Kapa ministry" [Get to Know: Founder of Kapa Ministry]. ABS-CBN News (in Tagalog).
  5. ^ a b "Kapa's Apolinario: From DJ to chopper-riding pastor". Philippine Daily Inquirer.
  6. ^ a b "Duterte orders shutdown of Kapa-Community Ministry, other investment scams". Rappler.
  7. ^ a b "Duterte orders NBI, CIDG to shut down religious corporation Kapa". GMA News. Retrieved June 10, 2019.
  8. ^ a b c "EXPLAINER: How Kapa Ministry took advantage of investors". Rappler.
  9. ^ "Kapa officers face criminal complaints at DOJ". Rappler.
  10. ^ a b "NBI agents raid Kapa Ministry offices across PH". ABS-CBN News.
  11. ^ "NBI readies charges against officials of Kapa Community Ministry Int'l". UNTV News. Yahoo! News. Archived from the original on 2019-06-12.
  12. ^ "Court freezes Kapa-Community Ministry's assets over Ponzi scheme". Rappler.
  13. ^ "DOJ puts 15 Kapa officials on immigration lookout". Rappler.
  14. ^ "KAPA members umaasang darating ang kanilang founder sa prayer rally sa Gen San" [KAPA members hopeful their founder will attend prayer rally in Gen San] (in Tagalog). Bombo Radyo.
  15. ^ "SEC secures over P100 million of Kapa Ministry's assets". Rappler. Note: Click on the embedded video.
  16. ^ a b c d "Kapa members reluctant to sue founder, says NBI". Philippine Daily Inquirer.
  17. ^ "Despite NBI manhunt, Kapa founder keeps posting videos online". Philippine Daily Inquirer.
  18. ^ "Kapa Ministry's 'donor' seeks P3B in damages, wants Duterte impeached". GMA News. Retrieved July 1, 2019.
  19. ^ "KAPA founder arrested following deadly shootout". CNN Philippines. July 21, 2020. Archived from the original on July 22, 2020. Retrieved July 21, 2020.
  20. ^ Recuenco, Aaron (July 21, 2020). "KAPA founder arrested in Surigao del Sur, 2 bodyguards killed". Manila Bulletin. Retrieved July 21, 2020.
  21. ^ Lagsa, Bobby (July 21, 2020). "Kapa Ministry founder Joel Apolinario arrested, 1 dead in raid". Cagayan de Oro. Rappler. Archived from the original on July 24, 2020. Retrieved September 27, 2020.
  22. ^ a b "Members ask Duterte to reconsider closure of Kapa-Community Ministry". Rappler.
  23. ^ "Security tightened in GenSan as Kapa members hold prayer rally". Philippine News Agency.
  24. ^ a b "Kapa members give Duterte an ultimatum". SunStar.
  25. ^ "Hiling ng ilang miyembro ng KAPA: Apolinario for President" [Wish of some members of KAPA: Apolinario for President]. RMN (in Tagalog). Archived from the original on June 23, 2019.

External links[edit]