Freeze order vs MFT Group extended to November

To protect the public from the group’s unlawful acts, the Court of Appeals (CA) has extended the freeze order over the accounts of the Maria Francesca Tan (MFT) Group of Companies Inc. for six months.

The Securities and Exchange Commission (SEC) said on Tuesday that the appellate court denied the MFT Group’s motion to lift and grant an extension of the freeze order on the company’s bank, securities, and insurance accounts until November.

According to the SEC, the CA extended the freeze order to allow the government enough time to prepare its case and file the appropriate charges without concern about the potential dissipation of assets linked to suspected illegal activities.

“A freeze order is an extraordinary and interim relief issued by the CA to prevent the dissipation, removal, or disposal of properties that are suspected to be the proceeds of, or related to, unlawful activities as defined in Section 3(i) of [Republic Act] No. 9160, as amended,” the appellate court held.

Ponzi scheme

“Based on the surrounding facts and circumstances, we cannot rule out the possibility that the subject bank, securities, and insurance accounts and the related and materially-linked accounts may have been used for the Ponzi scheme,” it added.

The CA initially issued the freeze order on 13 May, upon finding probable cause that the group’s assets were related to an unlawful activity.

According to the Anti-Money Laundering Act of 2001, the CA may impose a freeze order. This can occur upon a verified ex parte petition by the Anti-Money Laundering Council and after determining probable cause exists.

Reasonable belief

In this context, probable cause means that there is reasonable belief that a monetary instrument or property is somehow connected to an illegal activity.

To recall, the SEC also issued freeze and bank inquiry orders against the MFT Group after discovering that the it was soliciting investments from the public without the necessary licenses.

The MFT Group promised guaranteed returns ranging from 12 percent to 18 percent of the invested amount, considered interest income.

The scheme was perpetuated by issuing post-dated checks reflecting a 1 percent to 1.5 percent monthly interest to interested investors.

Investors were given either a promissory note or a borrower-lender agreement as proof of their investment.