PAMPANGA, Philippines – Twenty people have been arrested in connection with an alleged investment scam, in a joint entrapment operation by authorities during a gala night of marketing firm Professional Capability (ProCap) International Incorporated in Dusit Thani Hotel in Makati on Sunday evening, October 15.

Based on the initial report obtained by Rappler from authorities, 12 Filipinos and eight foreigners – five Singaporeans, two Malaysians, and a British – who were allegedly directors, employees, and agents of ProCap were taken into custody for violating Republic Act 8799 (Securities Regulation Code) and Republic Act 11765 (Financial Products and Services Consumer Protection Act).

The joint operation was led by the Philippine National Police (PNP) Criminal Investigation and Detection Group – National Capital Region (CIDG-NCR), Securities and Exchange Commission (SEC), and the Presidential Anti-Organized Crime Commission (PAOCC).

According to the report, the SEC Enforcement and Investor Protection Department requested police assistance against ProCap for allegedly offering, soliciting, and selling securities through investment contracts without any secondary license from the SEC.

ProCap is the marketing arm of ProCap Insurtech Limited, an online “player management platform” built on risk management in prediction games and selected trading instruments on exchanges, the report states.

“By following the company ProCap formula, players can enjoy stable daily winnings by making correct predictions without the worry of incurring losses. The company was also the first in the world to offer ‘game loss protection’ to its players,” the report reads.

PAOCC Director Jay Ison said the company has been soliciting money from investors since May. The PNP CIDG and the SEC are preparing all documents to be presented during the inquest proceedings, he said.

ProCap’s lawyer, Vitaliano Aguirre II, a former justice secretary during the Rodrigo Duterte administration, was also present in the firm’s gala night in Makati.

Based on a video obtained by Rappler, Aguirre spoke before the audience after announcing the presence of the law enforcers during the gala night. Ison said Aguirre tried to convince authorities that there was nothing wrong with the transactions of his clients.  

“We are the retaining lawyers of ProCap International. Pinagaralan namin ito and we advised, because they have been five months lamang nago-operate dito. They are not offering any securities. ProCap International is just a marketing arm. Ang nagku-kuwan talaga dito na sinasabi niyong o-offer is yung Insurtech,” Aguirre said in the video.

(We are the retaining lawyers of ProCap International. We studied this and we advised [them], because they have been operating for five months here. They are not offering any securities. ProCap International is just a marketing arm. The only thing here is…the one you’re referring to offering is the Insurtech.)

Ison noted there was no basis to arrest Aguirre as he was not active in soliciting investments.

“Ang basis kasi ng arrest is publicly offering investments. Si Sec. Aguirre, nandoon lang, nakaupo sa program. Hindi siya actively participating doon sa activity soliciting investment or explaining the returns of the investment. That’s why there is no basis for the law enforcement to arrest him,” said Ison.

(The basis of the arrest is publicly offering investments. Sec. Aguirre was only there seated during the program. He was not actively participating in the activity soliciting investment or explaining the returns of the investment. That’s why there is no basis for the law enforcement to arrest him.)

Ison also advised the public to check investment information from the SEC website to avoid being scammed. The SEC occasionally issues an “Investor Alert” warning the public against investing in companies that have not been authorized by regulators.

“For those intending to invest, don’t be blinded by the celebrities who are knowingly or unknowingly using unscrupulous people to take their money,” Ison told Rappler on October 16, Monday.

“Consult with the authorities like the SEC. The government made information about investments available through the SEC website so people should be more careful about their hard-earned money,” he added.

The arrested individuals are currently detained at the CIDG-NCR facility in Camp Crame, Quezon City. – Rappler.com