Money-making scheme in Lucena illegal, says gov’t securities body

THE OFFICE of Grand Alliance of Business Leaders Association Inc. (Gabai) in Barangay Isabang, Lucena City DELFIN T. MALLARI JR./INQUIRER SOUTHERN LUZON

LUCENA CITY, Philippines—The Securities and Exchange Commission (SEC) has declared illegal a money-making scheme here that has taken tens of millions of pesos from now restive investors, who include retirees, teachers, vendors, jeepney drivers and others who have plunked down their savings into the scheme.

On Saturday, the SEC posted an “Investor Alert” on its website declaring the Grand Alliance of Business Leaders Association Inc. (Gabai) “is not licensed to offer/sell securities.”

The SEC advised Gabai investors to submit complaints either to the main SEC office in Mandaluyong City or the office of Lucena Mayor Roderick Alcala.

Gabai was registered with the SEC (CN201020246) in 2010. It serves as the marketing arm of South Luzon Multipurpose Cooperative (SLMC), which was founded in 2007.

On Tuesday, two SLMC-Gabai officials—Camille Bautista, technical sales officer, and Nilo Magsino, auditor—appeared in the local TV program “Pagusapan Natin,” which is hosted by Arnel Avila, and provided some details of their operations.

Bautista and Magsino said “the decision lies with Mr. Lucido” as to when SLMC-Gabai would resume operations and return the money to its restive investors.

Since early last week, Luzardo Lucido, Gabai chair and SLMC administrator; Gerald Joseph Murillo, account manager; and wife Jenelee, chief cashier/logistics officer; and other key officials have been hiding from angry investors, causing the get-rich-quick scheme to stop.

Bautista and Magsino could not give an exact count of the group’s investors for lack of a centralized recording system and a system of accounting of deposits and payment of interests.

The two also admitted that financial squabbles among top officials and delay in liquidation of millions of pesos in investments are hounding SLMC-Gabai.

Magsino, a retired Bureau of Internal Revenue (BIR) examiner, said he served as auditor for only three weeks before SLMC-Gabai stopped its operations.

He gave the SLMC-Gabai system the name “Operation Kahon” (Operation in boxes).

Magsino told the Inquirer that when he first saw the huge money collection being kept in boxes, he was so shocked he exclaimed, “Oh my God!”

He said the boxes contained piles of duplicate unauthorized receipts of deposits sans BIR markings. The group does not have a computerized system of accounting and recording.

The average daily deposits, according to SLMC-Gabai officials, ranged from P5 million to P12 million from July to October.

Magsino said he advised Lucido, who hired him as auditor in September, to stop the operations because of the “illegal practices” involved. “But my advice went unheeded,” Magsino said.

Abet Sabarias, Cooperative Development Authority specialist assigned to Quezon province, said SLMC-Gabai faced dissolution.

He said that if the officials would not appear in a hearing on Nov. 23, SLMC-Gabai’s registration would be canceled in 15 days and be deemed illegal and its office padlocked by police.

Avila, an executive assistant of Mayor Alcala, refuted reports the mayor was the reason SLMC-Gabai ceased operations.

“They stopped operating because all their officials went into hiding,” he said.