Kapa investment scam

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The Kapa investment scam was one of the biggest financial investment frauds in Philippine history. An estimated five million people were duped by the Kapa-Community Ministry International Inc., which promised a 30% monthly return on investments for life. Kapa started in 2016 as Kapa Coop Convenience Store and General Merchandise in Bislig city, founded by Joel Apolinario, but the business was shut down by the City Economic Enterprise Department (CEED) for non-compliance of some provisions. In August 2017, Apolinario was charged with 102 (syndicated estafa) cases for not settling claims, prompting the issuance of 27 arrest warrants. However, all complainants were remunerated later and the cases were all dismissed. The syndicate moved south, becoming Kapa-Community Ministry International Inc., and enlisting new members through mainly word of mouth. New recruits become member-donors, which in turn recruit new members. On June 8, 2019, Philippine President Rodrigo Duterte ordered authorities to shut down the religious corporation over the scheme.[1]

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 10 years, where he started an investment firm for Kapa that provided funding to poor people.[2][3] According to some 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.[4] Since then, the people started to sent donations to Apolinario, but when numerous people approached, he had to resigned from the radio station and later rent a small space at the feeds store where he resume his business.[3] On September 2016, he obtained the business permit from the local government in Bislig for his establishment called "Kapa-Co Convenience Store and General Merchandise." He renamed the establishment to "Kapa-Community Ministry International" in March 2017. However, on February 2017, the local government discovered that the establishment has 30% interest received every month for those who have received "blessings" from donations.[3] The Apolinarios are transferred to General Santos, leaving their house to be temporarily reside by their family friend. There are some members of Kapa claiming that because of "blessings", their business has since been "flourished". Conversely, a friend of Apolinario's claimed that he never receive a full refund of his donation since Apolinario transferred to General Santos; he is among the person who file the charges against Apolinario for estafa.[3] According to the reports, Kapa has 10,000 members in Davao del Norte alone.[5]

Events[edit]

The Securities and Exchanges Commission (SEC) filed criminal charges against Kapa-Community Ministry International Inc. and its officials over the allegations of an investment scam.[6][7] This was first announced, on June 8, 2019, by President Rodrigo Duterte, who had ordered the National Bureau of Investigation (NBI) to shut down the Kapa, which Duterte said that the company was "clearly a form of 'syndicated estafa.'"[6][5] The Kapa claimed that they helped millions of Filipino people to raise money and promised that once they donated, they would "be receiving 30% of the amount for life."[7] A modus operandi revealed by the commission that the Kapa has its members donate a minimum amount of P10,000 "in exchange for a 30% monthly return for life".[7][8]

On June 10, the National Bureau of Investigation (NBI) raided the home of Kapa founder Pastor Joel Apolinario in General Santos, although Apolinario was absent.[9] The NBI crew also raided 14 branches of Kapa with a warrant issued by the Manila Regional Trial Court Branch 20.[10] The Court of Appeals (CA) had frozen the bank accounts and assets of Kapa over the scheme.[11] On June 14, the Department of Justice (DOJ) issued an immigration lookout against 15 members (including Apolinario) of Kapa members.[12]

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

On June 16, the SEC announced that over P100 million worth of assets were linked to Kapa. The SEC said on public records showing at least nine luxury cars, sports utility vehicles, and other properties among those registered under the group and its officials.[14] It was added that the Kapa members were vowed to receive a "30-percent monthly interest" or so-called "love gift."[15] The SEC estimated that the Kapa had invested about P50 billion from "donations" from its members over the last three years.[15] The impact of shutting down the Kapa resulted in the declination of income of sari-sari store owners, who operated outside the Kapa headquarters. Prior to the shut down, Apolinario had transferred its headquarters to Alabel, Sarangani in 2017.[15]

On June 21, a video message posted by Apolinario, stating that "he also asked the government to help Kapa return the money to its members" after the Anti-Money Laundering Council (AMLC) froze their accounts.[16] On the same day, Rhema International Livelihood Foundation, an alleged donor of Kapa which was involved in an Ponzi scheme, petitioned the Supreme Court to have Duterte submitted for impeachment proceedings in relation to his actions involving the shutting down of Kapa Community Ministry International. In addition, the petition urged the removal from office of Securities and Exchange Commission (SEC) Chairman Emilio Aquino.[17]

Reactions[edit]

Kapa members[edit]

Kapa community members had asked President Duterte to reconsider his decision to close the organization.[9] On June 13, about 50,000 Kapa members attended the prayer rally held in Acharon Sports Complex at General Santos in support of Kapa founder Pastor Joel Apolinario.[18] Apolinario later arrived in a helicopter and told to the crowd that Duterte "already assured him that Kapa would continue to operate as long as it complied with government regulations."[18] Despite being faced with the controversy, Apolinario and the crowd continued to support President Duterte and his family by chanting.[4] On June 20, members of Kapa held a rally in different areas in the country, urging President Duterte to reopen the establishment.[19][20] The group also added that they had "helped the poor and the Lumad."[20] On the same day, members of Kapa had been reluctant to file complaints against the founder Joel Apolinario, stating that they didn't "want to antagonize" Kapa officials and bite "the hands that [fed] them."[15] There is a report that some of the members of Kapa had urged Pastor Joel Apolinario to run as the president on 2022 election.[21]

Politics[edit]

Opposition Senator Antonio Trillanes called on the Kapa members to file an impeachment complaint against Duterte "for violating the religious freedom."[4]

See also[edit]

References[edit]

  1. ^ "[ANALYSIS] Kapa Ministry: A symptom of poor financial inclusion". Rappler.
  2. ^ "Sino si Pastor Joel Apolinario ng Kapa Ministry?". ABS-CBN News (in Tagalog).
  3. ^ a b c d "KILALANIN: Tagapagtatag ng Kapa ministry". ABS-CBN News (in Tagalog).
  4. ^ a b c "Kapa's Apolinario: From DJ to chopper-riding pastor". Philippine Daily Inquirer.
  5. ^ a b "Duterte orders shutdown of Kapa-Community Ministry, other investment scams". Rappler.
  6. ^ a b "Duterte orders NBI, CIDG to shut down religious corporation Kapa". GMA News. Retrieved June 10, 2019.
  7. ^ a b c "EXPLAINER: How Kapa Ministry took advantage of investors". Rappler.
  8. ^ "Kapa officers face criminal complaints at DOJ". Rappler.
  9. ^ a b "NBI agents raid Kapa Ministry offices across PH". ABS-CBN News.
  10. ^ "NBI readies charges against officials of Kapa Community Ministry Int'l". UNTV News. Yahoo! News.
  11. ^ "Court freezes Kapa-Community Ministry's assets over Ponzi scheme". Rappler.
  12. ^ "DOJ puts 15 Kapa officials on immigration lookout". Rappler.
  13. ^ "KAPA members umaasang darating ang kanilang founder sa prayer rally sa Gen San". Bombo Radyo.
  14. ^ "SEC secures over P100 million of Kapa Ministry's assets". Rappler. Note: Click on the embedded video.
  15. ^ a b c d "Kapa members reluctant to sue founder, says NBI". Philippine Daily Inquirer.
  16. ^ "Despite NBI manhunt, Kapa founder keeps posting videos online". Philippine Daily Inquirer.
  17. ^ "Kapa Ministry's 'donor' seeks P3B in damages, wants Duterte impeached". GMA News. Retrieved July 1, 2019.
  18. ^ a b "Members ask Duterte to reconsider closure of Kapa-Community Ministry". Rappler.
  19. ^ "Security tightened in GenSan as Kapa members hold prayer rally". Philippine News Agency.
  20. ^ a b "Kapa members give Duterte an ultimatum". SunStar.
  21. ^ "Hiling ng ilang miyembro ng KAPA: Apolinario for President". RMN. Archived from the original on June 23, 2019.

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