Senate targets regulators



Government regulators have failed to stop the proliferation of investment scams despite the harsh penalty imposed on economic fraud, and senators want to know why.

Sen. Aquilino Pimentel III has filed a resolution for a Senate inquiry into why the Securities and Exchange Commission (SEC) and the Department of Trade and Industry (DTI) failed to prevent Aman Futures Group Philippines Inc. and other similar groups from preying on thousands of people.

Sen. Francis Escudero, head of the committee on justice and human rights, said the Anti-Money Laundering Council (AMLC) ignored red flags involving Aman Futures’ bank transactions, allowing similar groups to increase and con thousands of people.

Escudero said it was puzzling that despite the red flags, the AMLC did nothing.

Pimentel proposed a joint investigation by the blue ribbon committee and the committee on trade and commerce that will also look into the reported involvement of public officials and the alleged investment of public funds in illegal investment schemes.

“[The] stiff penalty provided under our criminal laws for syndicated estafa and the existence of government regulatory agencies such as the SEC and the DTI, among others, have failed to deter the proliferation of corporations, partnerships, associations or persons operating illegal investment schemes in the country,” Pimentel said in his resolution.

He said the investigation was “imperative” to determine loopholes in the laws and institutional lapses that allowed investment fraud to flourish.

The objective enables Congress to enact “remedial measures that would prevent the rise of similar fraudulent activities,” Pimentel said.

Pimentel cited the scams pulled by Aman Futures Group and Visioner 2020 Trader’s International in Pagadian City, the Coco Rasuman Investments in Lanao del Sur and the Parents-Teachers Pyramid Scam in Quezon City, “which have collectively victimized at least 15,000 investors all over the country [who lost] P12 billion.”

Half-million pesos and up

Escudero said the Aman Futures scam had been out in the open in Pagadian for two months. Evidence should be available by now, he said.

“In fact, the Securities and Exchange Commission website has come out with a warning on the Aman investment scam,” Escudero said in a statement.

Asked what signs the AMLC ignored, Escudero replied: “Any transaction in excess of P500,000 and, in this case, way over and in excess of the threshhold.”

“We’re talking of the tens of millions, which [AMLC] should have detected and they should have raised the alarm,” Escudero told the Inquirer in a text message.

Escudero said the magnitude of the debacle could have been controlled had the AMLC been more insightful about these developments.

Pimentel also wanted to look into reports that government funds had been invested in the illegal schemes.

“[It] was reported by the media that local government officials where these fraudulent operations were carried out may not only be involved in these illegal investment schemes but, worse, they may have used the internal revenue allotment of their respective local government units as their personal investment in [these] fraudulent schemes,” Pimentel said.

Pimentel said the use of public funds in the fraudulent schemes “underscores the need for the legislature, as holder of the so-called power of the purse, to recommend the filing of appropriate charges in the Office of the Ombudsman, should it find that there is probable cause against certain local government officials.”

Pimentel said that as early as 2007, authorities had unmasked various corporations, partnerships, associations or persons operating illegal investment schemes, running either a Ponzi scheme or a pyramid scheme.

Ponzi, pyramid

He said the US Securities and Exchange Commission defined a Ponzi scheme as an investment fraud involving the payment of purported returns to existing investors from funds contributed by new investors who were promised investment opportunities, generating high returns with little or no risk.

The Department of Justice (DOJ) defines a pyramid scheme as an illegitimate program, which lures participants with the promise of easy money by compensating them from investments of additional participants rather than from legitimate product sales.

Justice Secretary Leila de Lima on Wednesday said the National Bureau of Investigation had found that the Rasuman scam was bigger than the Aman Futures scam.

“Although [fewer] investors are involved in the Rasuman scam, the amount of investment there is bigger,” De Lima told reporters.

De Lima said the “minimum” estimated capital of Rasuman was P1.3 billion but the NBI had yet to verify the accuracy of that figure.

She said Jachob “Coco” Rasuman, the brains behind the Rasuman scam who was arrested in Marawi City on Tuesday, was taken to the NBI office in Manila for his safety.


The NBI in Cagayan de Oro City on Wednesday said Rasuman showed signs of “relief” when he was arrested in his home in Marawi City.

“He and his family were expecting his arrest and the moment we knocked on the gates of their house, we were let in and were faced by Rasuman,” NBI Special Agent 3 Froilan Grahida said.

He said even Rasuman’s family wanted him to be arrested for his and their safety.

Grahida said the Rasumans locked themselves in their house for protection.

“They could not go out. They were like prisoners because of the threat to their lives,” Grahida said.

He described Tuesday’s arrest as something for the movies—NBI agents transporting a “high-value target” while many people were trying to ge the suspect.

The difference is that the people were not out to rescue Rasuman but to kill him, Grahida said.


Trial in CDO

Rasuman had asked for protection since the exposure of his scam. The authorities could not arrest him because no charges had been brought against him.

But after estafa charges had been brought against Rasuman, Judge Bonifacio Macabaya of the Regional Trial Court Branch 20 issued a warrant for his arrest on Tuesday.

Cagayan de Oro Prosecutor Fidel Macauyag said the trial would be held in Cagayan de Oro but the DOJ would handle the case. With reports from Christine O. Avendano in Manila; Bobby Lagsa and Cai Panlilio, Inquirer Mindanao

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  • Hey_Dudes

    Has government been effective in combating jueteng in spite  efforts to eradicate it  completely?  Of course not – it continue to flourish because it takes discipline on the part of everyone to put a stop to it.  Why politicians are now blaming someone or something after the damage has been done is again abusing the minds of Filipinos.  Like the saying goes there’s sacckers born every minute.  Until the Filipino people know and learn to understand the value of hard work towards becoming wealthy and not rely on some get rich schemes from snake oil salesmen scams will continue prospering in the country.

  • johndcross1

    The SEC, DTI & AMLC should be investigated!  Despite previous incidents of this type of scam, they are still SLEEPING ON THE JOB.  There was ample evidence prior to the implosion of the scam & yet no one initiated an investigation.  Even the SEC as early as June, 2012 sent warnings & yet did not do anything to minimize the damage.  Sending warnings is not enough. 

  • vir_a

    The SEC and AMLC should have offices in provincial capitals, not only regional areas. They should not watch things over the computer and internet but with visual observations of what’s going on in the field. If SEC and AMLC had offices in Zamboanga, Iligan and Cagayan de Oro, they could have prevented this tragedy from happening. The main cause however is still the ignorance and laziness of the people. Most want to get money or get a job quick instead of working hard to earn them. This weakness is being exploited by scammers and illegal recruiters. What’s worse is government officials are also sometimes involved.

  • Garo Ungaro

    hard reality…if ur poor u want to be rich…if ur rich u want to be richer…if ur richer u want to be the richest bottom line GREED…something happens blame somebody…this is the reality of people who want more…more of nothing….hope they learned their lesson …wanna bit this will again happen…in the future…

  • Bigboy I

    dapat pati yung mga MLM imbistigahan din.

  • EdgarEdgar

    To be sure, Senators Escudero and Pimentel could not pass up the opportunity to gain media mileage and TV facetime for May 2013 elections by capitalizing on this pyramid scam. But in fairness to both, they have correctly identified the problem — this is what happens when regulators fail to regulate, when law enforcers fail to enforce the law, when investigators fail to investigate and when the justice department fails to serve justice. All told, DTI, SEC, DOJ, NBI & AMLC have within their existing power under the law to dismantle the pyramid and unmask the con men earlier on. From the time these government agencies were alerted of the scam in April 2012 to when it all came crashing down in November 2012, they had eight (8) full months to do something about it and yet nothing was done to stop the perpetrators in their tracks. The tragedy is made even more painful because of the sloppiness of DOJ Sec. De Lima who seems to escape the scrutiny of both said senators, only because she has earned herself the status of being one of the president’s sacred cows. Or more aptly, the sloppy sacred pig.

    Will both gentlemen rise to the occasion and investigate DOJ in aid of legislation?

  • boybakal

    It is a good  move from Senator  Pimentel and Escudero.
    There is laxity in effecting regulations in this kind of investment schemes.
    I hope there would be stricter regulations and LGUs monitoring to prevent the occurence of the same.
    People are too naive to be easily manipulated by sweet talks and persuasion of high return of investment.
    People should learn their lesson by being smart a little bit.

  • tata_boy

    kailangan balasahin na ang mga nasa AMLC, tutulog-tulog lang ang mga ito.

    • magiting78

      hnd lang AMLC pati senado wag n iboto mga re-electionist at pati mga kamag-anak, same persons same name no changes….After election at sila p din ang mauupo at mga kamag anak, what we are now will be same after election…

  • pedronimo

    This is not the first time the SEC has permitted Scams like this to flourish under its watch. And to think the SEC has board members with specific role to monitor the operation of these investment companies. Apparently it’s either negligence or collusion with the culprits. As usual, the scam is exposed only after the operators have already run away the hapless investors’ money. These criminals must be punished to the hilt and the SEC be overhauled to cleanse this agency of corrupt officials.

  • tower_of_power

    Sa Pinas … there is this perception that the regulated and the regulators almost always connive to gain profit. Tingnan nyo nalang si Ongpin at mga kasamahan niya. Look at how SEC distorts the meaning of ownership. Look at CALATA … Look at how the word “inclusive growth” is being advanced …. hahaha … forgive my paranoia … but this is another process to involve the poor to gain more profit … in the name of INCLUSIVE GROWTH … exploit the naiveness and greediness of the people!!!

  • Jon

    Napapabayaan ng DOJ ang trabaho nila kasi okupado lang sila parati sa mga press release at pagpapogi sa media.

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