SEC Stops Illegal Investment Scheme of HASMADAI Foundation

T​he Securities and Exchange Commission (SEC) has issued a cease and desist order (CDO) against Humanitarian and Spiritual Mission Apostulates of Davao and Asia, Inc., HASMADAI Foundation, Inc. and Humanitarian Institute of Technology Corp. (collectively “HASMADAI”) for their unauthorized solicitation of investments.

In an order promulgated on May 21, the Commission En Banc directed the group to immediately cease and desist from offering or selling securities to the public without the necessary license from the SEC.

The Commission also directed the group to cease its online presence, and prohibited the transacting of any business involving funds in its depository banks, and from transferring, disposing, or conveying any related assets to ensure the preservation of the assets of its investors.

The order covers the officers of the group, including Dante “Bong” Encarnacion Tabusares a.k.a. Ralph Jimmy Calaor Gayatin, Rowel Dagan Bacat, Cyrus Mark Cabasag, Cipriano Quizon, Jr., Lecerio A. Lavente, Jr., Duraliza Baja Mahusay, Erwin S. Gabieta, Jeofrie A. Jala, Maria Lourdes Biongan Domosmog, Ledevina M. Generalao, Rodel B. Mahusay, and Roy T. Velasco.

All other officers, directors, representatives, salesmen, agent, brokers, dealers, promoters, recruiters, uplines, influencers, endorsers, abettors and enablers are likewise enjoined to comply with the order.

The order was issued after the SEC Enforcement and Investor Protection Department found the group to be operating several branches in the CARAGA Region that supposedly offered investments in the guise of missionary allowances.

The group was found to be soliciting donations ranging from P5,000 to P20,000, with the donor guaranteed to get a monthly “missionary allowance” equivalent to 27% to 34% of the donation. Under the scheme, a donor of P5,000 is guaranteed to receive P8,100 over a six-month period, while a donor of P20,000 will get more than twice the amount at P41,4000.

Mr. Tabusares was also found to be previously connected with KAPA-Community Ministry International, Inc., one of the largest investment scams in the country’s history, which is currently being prosecuted by the SEC before the courts.

The scheme involved the sale and/or offer of securities in the form of investment contracts, whereby a person makes an investment of money, in a common enterprise, with the expectation of profits, to be derived solely from the efforts of others, the Commission held.

Section 8 of Republic Act No. 8799, or the Securities Regulation Code (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.

Humanitarian and Spiritual Mission Apostulates of Davao and Asia, Inc. is a non-stock, non-profit religious society registered with the SEC, while HASMADAI Foundation Inc. and HASMADAI Institute of Technology Corp. are neither registered as a corporation or as a partnership with the SEC. Accordingly, none of the entities have secured the necessary license to solicit investments from the public.

Records from the Department of Social Welfare and Development further show that HASMADAI does not have the requisite approval to carry out a public solicitation activity.

The unauthorized investment scheme of HASMADAI also constitutes financial fraud as defined under the Republic Act. No. 11765 of the Financial Products and Services Consumer Protection Act, which covers any form of deceptive solicitation of investments from the public.

“[T]he act of HASMADAI and its agents in selling/offering unregistered securities operates as a fraud to the public which, if unrestrained, will likely cause grave or irreparable injury or prejudice to the investing public,” the Commission held.

​“Verily, HASMADAI’s act of offering/selling unregistered securities in the form of investment contract sans the required license constitutes a clear and continuing violation of Sections 8 and 28 of the SRC. This justifies the immediate issuance of a CDO for the protection of the investing public.”