PAMPANGA, Philippines – Procap International Incorporated (Procap) has denied that the company is involved in an alleged “investment scam” following an entrapment operation which led to the arrest of 20 individuals during the company’s gala night last October 15 at Dusit Thani Hotel in Makati City.

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

Procap’s lawyer, former Justice Secretary Vitaliano Aguirre, sent a statement to Rappler via Facebook Messenger on Sunday, October 22. Procap hired the Aguirre and Gatdula Law Firm on October 1 for legal assistance.

The press statement was issued as a response to “correct the inaccurate media reports that have put Procap in a bad light before the public,” Aguirre and Gatdula Law Firm said.  

“The claim that ‘Procap is an investment scam’ is farthest from the truth!” it added. 

“There is no truth to this as no arrests were made. They were only invited to participate in an investigation, to which they were fully cooperative. To date, no complaints have been lodged against Procap and its officers,” the law firm said.

However, PAOCC director Jay Ison said Procap doesn’t have a secondary license to sell securities. Although all 20 individuals that were arrested on the night of the raid have been released, regular filing of the charges will follow, he added.

“Admitted naman ni Atty. Aguirre they are the marketing arm. Ano iminamarket nila? Wala sila secondary license to sell securities,” Ison told Rappler on Monday, October 23.

(Atty. Aguirre admitted that they are the marketing arm. What are they marketing? They don’t have a secondary license to sell securities.)

Aguirre and Gatdula Law firm said Procap is a marketing arm of online player management platform, Procap Insurtech Limited, which is “built on the basis of risk management in prediction games with capital loss protection.”

Denying that Procap was enaged in an illegal pyramid scheme, the law firm said Procap used a multi-level marketing strategy where the earnings of their players are mainly from their winnings, not money from new recruits.

“Its gaming packages allow its players to play on online gaming platforms operating abroad. Using Procap’s ‘7 Quantum Formula,’ the player’s probability of winning is 99.21875% or .78125% chance of losing. They earn mainly from their winnings,” the law firm said.

“The claim that the players are not informed that their money will be used in online gaming platforms is denied because it is a blatant lie. This is precisely the essence of the gaming packages in its effort to comply with the Philippine laws and regulations,” it added.

Last Friday, October 20, SEC reiterated that it has not authorized Procap to undertake its activities, calling it another “investment scam.”

“Operating under the slogan ‘win once daily for the rest of your life,’ Procap, also known as Procap Insurance, offers and sells securities in form of investment contracts to prospective investors in the guise of gaming packages from P73,000 to P4.3 million, that will entitle investors or ‘players’ to play seven rounds of its prediction game, with returns ranging from 6% – 42% per month with referral incentives for recruiting additional players,” SEC said in a statement posted on its website and official Facebook page.

“According to Procap, by following its formula, players will not incur any loss even if they get 7 successive wrong predictions through its capital protection insurance where players can enjoy fresh 7 rounds to play its game and so forth,” it added.

The SEC said Procap violated three provisions of Republic Act 8799 or the Securities Regulation Code, and Section 11 of Republic Act 11765 or the Financial Products and Services Protection Act. The latter penalizes persons who commit investment fraud, which includes offering or selling investment schemes to the public without a license or permit from the corporate regulator. – Rappler.com