The Department of Justice (DOJ) has ordered the indictment of New Seataoo Corp. and Seataoo Information Technology OPC for allegedly running illegal investment schemes, following a complaint from the Securities and Exchange Commission (SEC).

Citing a resolution dated 22 October, the SEC said on Friday that state prosecutors found prima facie evidence to charge both firms for violating the Securities Regulation Code (SRC) in relation to the Cybercrime Prevention Act. 

They also recommended filing 54 counts under Section 26 of the SRC based on individual investor complaints.

Those implicated include New Seataoo CEO Widiana Chen, Project Manager Dylan Lim, directors Anna Rose Jangao Tero, Jonathan Tuazon Garcia, Danny Tuazon Sudaria, Lew Yean Yee, Seow Kai Sheng, and Seataoo OPC single stockholder Jayson Corono Clidoro.

The resolution pointed to SRC provisions that prohibit the sale of unregistered securities, require brokers and dealers to be registered with the SEC, and bar fraudulent sales practices. Offenses conducted online carry higher penalties under the Cybercrime Prevention Act.

Prosecutors upheld earlier SEC findings that the Seataoo group offered investment contracts through its cross-border dropshipping platform without a secondary license. 

The group allegedly enticed the public to deposit funds with promised returns of seven percent to 12 percent “without engaging in any genuine selling activity.”

“By offering and selling unregistered investment contracts to the public and concealing the true nature of their operations, New Seataoo and Seataoo IT and their responsible officers violated Section 8 of the SRC,” the DOJ said. 

“Their failure to register these securities with the SEC deprived the investing public of the safeguards and disclosures required by law.”

The operation “resembles the nature of a Ponzi scheme,” prosecutors added, noting that profits allegedly came from new participants instead of real business activity. 

“Respondents misrepresented their companies as a legitimate e-commerce platform when, in truth, there was no inventory, no supplier arrangements, and no real product movement,” the resolution read. “The system merely simulated transactions and internally rotated funds.”

The SEC revoked the registrations of New Seataoo and Seataoo OPC in June 2024 for offering unregistered securities and denied their appeal in December 2024.