MANILA, Philippines – A Makati court has found so-called “pyramid queen” Rose Baladjay and her husband guilty of scamming investors of the Multinational Telecoms Investors Corporation (Multitel) in 2001, the Securities and Exchange Commission (SEC) reported on Wednesday, December 9.
The SEC said in a press statement that the Makati Regional Trial Court (RTC) branch 56 sentenced Baladjay and her husband, Saturnino, to 7 years’ imprisonment.
They operated under Multitel which was not registered with the SEC. The SEC then issued multiple cease and desist orders against Multitel and its officers, prompting the couple to register Multitel International Holdings, Incorporated (MIHI) with the SEC.
MIHI, though registered with the SEC, used several conduit corporations to continue their illegal operations.
After receiving a complaint from the SEC, the Makati Prosecutor’s Office charged the Baladjays for violation of Section 8 of the Securities Regulation Code (SRC) for selling or offering unregistered securities to the public.
The court ordered the Baladjays to pay the complainants an estimated total amount of P8 million ($169,654.25).
Each violation of the SRC is punishable, upon conviction, with a fine of not more than P5 million ($106,033.30) or imprisonment of 7 to 21 years, or both.
The SEC said it received the court ruling, issued on November 2, on December 2.
Busting the pyramid scam
In July 2014, registered financial planner and Rappler contributor Marvin Germo wrote in his blog that Multitel was able to attract investors by offering them a guaranteed 4% monthly interest or 48% per year, for a minimum investment of P10,000 ($212.02).
Investors were also offered an alternative of double-your-money scheme for a lock-in period of 18 months, Germo wrote. He added that Baladjay also utilized counselors to recruit investors; each successful recruited investor earned the counselor one to 20% commission.
Then SEC chairperson Lilia Bautista received reports that Multitel had conduit companies such as Everflow and One Heart offering investors 10% return per annum. Alarmed by what Multitel is offering, the SEC issued a cease and desist order in March 2001.
“Before the scam was busted, it was estimated to have victimized at least 2 million people, including politicians and Cabinet members and the wealth damage is around P100 billion ($2.12 billion),” Germo wrote.
SEC Chairperson Teresita J. Herbosa said in a statement on Wednesday that SEC aims to push for greater financial transparency to not only protect Filipino investors, but to increase overall investor confidence in the Philippines as well.
“The SEC’s efforts to achieve the public’s trust through transparency and accountability are in line with the initiatives undertaken by the Aquino administration,” Herbosa said.
On November 6, the SEC filed two cases before the Department of Justice against the following EmGoldex, Global InterGold (GIG), and Prosperous Infinite Philippines Holdings, Corporation (PIPHC) executives :
- Kevin del Mundo Miranda
- Ryan Manuit
- Charles Juiz Padilla
- Raahbel Ymas
- John Rafael Calicdan
- Jose Victoria Cajita
- Paul Alviar
The Philippine National Police (PNP) also filed two additional cases against the same respondents for violation of Presidential Decree 1689, also known as syndicated estafa. (READ: SEC to DOJ: Issue lookout bulletin order vs EmGoldex scammers)
With the “whole of government approach” of the Department of the Interior and Local Government, PNP, National Bureau of Investigation, and SEC, EmGoldex masterminds are also facing serious criminal charges and long-term, the commision said.