Recurring scams under the names of pseudo-religious sects have been uncovered prompting the release of a cease and desist order (CDO) from the corporate regulator Securities and Exchange Commission (SEC) against a Davao-based sect called Hasmadai that is spreading to other regions.
The SEC action is also expected to help resolve the slaying of Brigada FM Kidapawan broadcaster Eduardo “Ed” Dizon in 2019.
Former President Rodrigo Duterte in 2019 ordered the National Bureau of Investigation and the Philippine National Police to shut down Kapa-Community Ministry International Inc. for using the non-profit group to solicit investments in violation of Republic Act 8799 or the Securities Regulation Code (SRC).
The SEC quickly filed a criminal complaint against Kapa before the Department of Justice (DoJ).
Kapa founder and president Joel A. Apolinario, trustee Margie A. Danao, and corporate secretary Reyna L. Apolinario were among the accused in the complaint.
Kapa orchestrated one of the largest investment scams in the country’s history which is currently being prosecuted by the SEC before the courts.
Later, a similar operation under another name, Humanitarian and Spiritual Mission Apostulates of Davao and Asia Foundation Inc. and Humanitarian Institute of Technology Corp. (collectively HASMADAI) emerged.
In an order, the SEC directed the group to immediately cease selling securities to the public without the necessary license from the commission.
The investment was in the guise of “spiritual aid through a charity mission support pledge form with a return on investment (RoI) of between 27 to 34 percent paid after six months in the form of a missionary allowance.”
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SEC directed Hasmadai to take down its online site since it had been prohibited from transacting business and from transferring, disposing, or conveying any related assets.
Like the order on Kapa, the SEC wanted to ensure the preservation of the assets of the Hasmadai investors.
Among the Hasmadai officers were Dante “Bong” Encarnacion Tabusares, also known as Ralph Jimmy Calaor Gayatin, who was previously connected with Kapa.
The identical scheme of both groups involved the sale and/or offer of securities in the form of investment contracts, whereby a person invested money in a common enterprise with the expectation of profits to be derived solely from the efforts of others.
Section 8 of Republic Act 8799, or the Securities Regulation Code, provides that securities shall not be sold or offered for sale or distribution within the Philippines without a registration statement duly filed with and approved by the SEC.
The Presidential Task Force on Media Security (PTFoMS) was also after the group since Kapa was implicated in the murder of broadcast journalist Dizon in Kidapawan in 2019.
PTFoMS executive director Undersecretary Paul Gutierrez told Daily Tribune that Tabusares identified himself as the “Bishop/President/Trustee” of Hasmadai in papers filed with the SEC.
Tabusares has been tagged as the “mastermind” in the murder of Dizon on 10 July 2019. Dizon was allegedly killed on orders of Tabusares over his stringent criticism of the Kapa Community Ministry of which Tabusares admitted to being its “media coordinator and promoter” for North Cotabato.
Dizon was killed just weeks after the SEC closed down Kapa in early 2019.
The alleged gunman in the killing of Dizon, Junell Jane Andagkit Poten, aka Junell Gerozaga, was finally collared in Makilala, Cotabato, last 2 May 2024 by a special investigation team formed by the government on the instigation of the PTFoMS.
The SEC issued the CDO against Hasmadai after establishing that it was another “fraud to the public” based on the investigation conducted by the SEC’s Enforcement and Investor Protection Department (EIPD).
Gutierrez said the correlation between Dizon’s killing and the activities of Tabusares was clear.
“The SEC should be commended for its diligence in uncovering this latest modus operandi of Mr. Tabusares aimed at taking the hard-earned money of our poor countrymen, especially in Mindanao,” Gutierrez said.
The SEC findings will be used to buttress the case against Tabusares and his confederates with regard to the killing of Dizon, he added.
The SEC investigation, Gutierrez said, revealed a similar pattern of operations leading to the conclusion that Hasmadai was an offshoot of Kapa which enticed the public to invest their hard-earned money ranging from P5,000 to P20,000 on the promise of a huge windfall within six months.
Due to Tabusares’s deception, the EIPD noted that Hasmadai had become entrenched in the “various municipalities and cities” in the Caraga region, especially in the provinces of Agusan del Sur and Agusan del Norte.
Hasmadai chapters could also be found in North Cotabato, the Davao region, especially in Davao del Sur, in the Visayas, and even in Luzon, based on its social media posts.
The SEC order likewise directed all “representatives, salesmen, agents, brokers, dealers, promoters, recruiters, uplines, influencers, endorsers, abettors, and enablers, and any and all persons, conduit entities, subsidiaries and affiliates” acting for and on behalf of Hasmadai to comply with the CDO.
Implicating admission
During a municipal session last 15 April 2024 in San Francisco town, Agusan del Sur that Tabusares attended, the EIPD noted that not only did he admit to his previous association with Kapa but also indicated they were “accepting donations from persons who are in the country and abroad.”
In Hasmadai’s registration papers, however, the EIPD noted that the self-styled “religious society foundation” purposely stated that “the corporation shall not solicit, accept or take investments/placements from the public, neither shall it issue investment contracts.”
After going over the EIPD report, the SEC en banc concluded that Hasmadai, like Kapa, was another “fraud to the public.”
“Finally, this commission holds that Hasmadai and its agents in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the CDO declared.
The SEC gave Tabusares’s group five days from their receipt of the CDO to appeal the decision.
The EIPD found Hasmadai operating several branches in the Caraga region that supposedly offered investments in the guise of missionary allowances.
Under the scheme, a P5,000 donation was guaranteed a return of P8,100 over six months, P20,000 was guaranteed more than twice the amount at P41,4000.
Its affiliates, Hasmadai Foundation Inc. and Hasmadai Institute of Technology Corp., were not registered with the SEC. Accordingly, neither of the entities had secured the necessary licenses to solicit investments.
Department of Social Welfare and Development records showed that Hasmadai was not licensed to conduct a public solicitation.
The unauthorized investment scheme constituted financial fraud as defined under Republic Act 11765 or the Financial Products and Services Consumer Protection Act, which covers the deceptive solicitation of investments from the public.
