The Department of Justice (DOJ) has recommended the filing of criminal charges against Organico Agribusiness Ventures Corp. and its officers for unauthorized solicitation of investments from the public.
The DOJ September 3 resolution, which affirmed the previous findings of the Securities and Exchange Commission, state prosecutors found probable cause to charge Organico, its president and chairman Cerrone Roial Posas, and officers Marve Subere Posas, Renato Subong, Anthony Butaslac and Karen Maasin for violations of the Securities Regulation Code (SRC) and the Cybercrime Prevention Act of 2012.
The DOJ also recommended the filing of charges against Kathleen Hortesano, Rochelle Camacho and Annielyn O. Hilotin for acting as agents of Organico, offering and selling unauthorized securities to the public.
“(T)he business operations carried out by respondent Organico is in the form of a Ponzi scheme whereby purported returns to existing investors are culled from funds contributed by new investors,” the DOJ said.
“It is not an investment strategy but a gullibility scheme and which only works as long as there is an increasing number of new investors joining.”
The SEC, together with the Philippine National Police-Criminal Investigation and Detection Group, filed a criminal complaint against Organico before the DOJ on September 10, 2019, for luring the public to invest in the company without the necessary license.
Organico’s investment scheme involved the sale of a piglet for P3,600 each, with promised returns of P7,000 after three months. The company also engaged in crowdfunding activities through the internet where an investor should buy at least 10 shares worth P1,800 each, for a payout of P450 every 15 days or P2,700 in three months.
The SEC said Organico’s scheme involved the sale of securities in the form of investment contracts, in which an individual invests his money in a common enterprise and is led to expect profits from the efforts of others.
The SRC provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.
“The records also consistently show that respondents constantly made use of the internet, through Facebook and Facebook Messenger applications, to further disseminate information regarding their fraudulent scheme,” according to the DOJ resolution
“By posting their offers of investments in their Facebook page and various group chats, they successfully reached a wider audience and was able to tempt or lure more victims to invest in their Ponzi scheme.”
The SEC has issued an advisory on Organico as early as May 21, 2018 to warn the public about its illegal activities. The agency then issued a cease and desist order against the company on May 28, 2019 and revoked its corporate registration on May 31, 2019.
Posas and his other co-accused Organico officers have a standing warrant of arrest issued by Judge Mario Duaves of the Davao Regional Trial Court Branch 15 for five counts of syndicated estafa.