State regulators under fire for investment scam

SEC chairperson Teresita Herbosa said the SEC had issued an advisory warning prospective investors against Aman Futures. But she explained that the firm also had to be given “the opportunity to be heard.” Photo from https://www.sec.gov.ph

State regulators and law enforcers on Tuesday found themselves in the hot seat at the House of Representatives investigation into the P12-billion investment scam that victimized an estimated 15,000 people in Mindanao and the Visayas.

House legislators castigated the Anti-Money Laudering Council, the Securities and Exchange Commission, and the National Bureau of Investigation for what they said was their “reactive” attitude to the case.

“Medyo natutulog sa pansitan ang SEC dito (The SEC seems to have been caught napping here,” an angry  Cagayan de Oro Rep. Rufus Rodriguez said during the hearing of the committee on banks and financial intermediaries.

AMLC executive director Vicente Aquino announced at the hearing that some P200 million worth of assets of the Aman Futures Group Phil., the alleged perpetrator of the pyramid scam, had been frozen by the Court of Appeals as of Monday.

But the House investigators would not be appeased.

Rodriguez said the SEC should have closed down the Pagadian City office of Aman Futures earlier to prevent more investors from being duped. He noted that the firm began operating in January this year, but the SEC acted on a case only last August.

SEC chairperson Teresita Herbosa said the SEC had issued an advisory warning prospective investors against Aman Futures. But she explained that the firm also had to be given “the opportunity to be heard.”

“We did our job,” she said, noting also that the SEC did not acquire jurisdiction over Aman Futures until the firm was registered last June.

NBI Director Nonnatus Caesar Rojas explained that when the agency began investigating the complaints of a possible investment scam, he said agents were met by reluctant and uncooperative victims.

‘Spoilsport’

The as-yet-unsuspecting victims looked on the NBI as a “spoilsport” because they were “sort of happy with what was going on,” he said.

“But we already felt that there was some problem and that this was some sort of a business scam,” he said.

Some of the victims were talking of staging a protest rally against the NBI for “disturbing the party, so to speak,” Rojas said.

He said that even when Fernando Luna, who managed the Aman Futures scam, disappeared on Sept. 26, “the people were still not alarmed because the first complaint we received was only on Oct. 15.”

“The people were waiting. They didn’t want the NBI to come in just yet because they were hoping that their investments would be paid, that it would turn out well for everyone,” he said.

“When the cases started coming, that’s when the people probably realized the game was over, the party was over,” said Rojas.

NBI deputy director Virgilio Mendez said the victims may have been reluctant to cooperate with the NBI because they were warned by the scam operators that if they told or brought this information to the attention of authorities, “their investments would be affected and they would not be allowed to join the party.”

Aquino said the AMLC had a similar problem with reluctant complainants.

“We conducted a discreet investigation when we noticed certain red flags in the transactions of these people and like the NBI, we exerted our utmost to convince alleged victims to at least execute an affidavit, to probe the existence of probable cause, that damage was sustained, and that there was deception,” he said.

Nobody came out, however, and under the Anti-Money Laundering Act, the AMLC cannot freeze assets on the basis of a red flag or a mere suspicious transaction, Aquino said.

Pagadian Mayor Samuel Co, who with his wife and 10 others is facing syndicated estafa charges before the Department of Justice, was a no-show at the congressional hearing.

Mendez said that testimonies and documents have “established that (Co) had a direct hand in the operation of this business.”

Zamboanga del Sur Gov. Antonio Cerilles showed up at the hearing and implicated Co. He submitted documents purportedly showing that the mayor had issued three business permits to Aman Futures.

One such permit was issued on July 27, or more than a month after the NBI began investigating the investment scam.

The NBI office in Pagadian has so far received 11,299 complaints against Aman Futures, with combined losses estimated at around P10 billion.

Case vs mayor

A third syndicated estafa complaint was filed against Co last Monday. Included in the latest complaint filed by the NBI was the Pagadian city treasurer and a policeman who served as a bodyguard for Luna.

The first two complaints were filed last Nov. 26 and Nov. 29.

Meanwhile, the special panel tasked to prosecute the syndicated estafa cases against the Aman executives postponed its scheduled hearing today in Pagadian City because of bad weather, according to Prosecutor General Claro Arellano.

Arellano said the special panel will proceed with its Dec. 7 hearing in Cagayan de Oro City on another investment scam by the Rasuman group. With a report from Christine Avedaño