The Securities and Exchange Commission has filed criminal charges before the Department of Justice against officials and agents of the Performance Investment Products Corporation (PIPC) in connection with its multi-million dollar pyramid scheme.
In its 24-page complaint, the SEC alleged that the PIPC – led by chairman and president Michael Liew and general manager Cristina Gonzalez Tuason – are liable for violating Sections 8, 28, and 26 of the Securities Regulation Code.
The SEC also included PIPC agents Ma. Cristina Jurado, Barbara Garcia, Jonathan Ocampo, Anthony Kierrulf, Maria Pamela Morris or Maria Morris, Renato Sarmiento Jr., Deborah Yabut, VJ Vergel de Dios, David Chua-Unsu, Nicole Ortega, Nicoline Amoranto or Nicoline Amoranto Mendoza, Jose Tengco, Luis Jimbo Aragon, Oudine Santos, Mia Legarda, Christine Yu, Herley Hesuitas, Yeye San Pedro Choa, Mayenne Carmona, Eugene Go, and Michael Melchor Nubla in the charges.
The SEC said the respondents violated Section 8 of the src for offering or selling unregistered securities. If convicted, they face a maximum imprisonment of 21 years, fined P50,000 to P5 million, or both.
According to the SEC, the respondents connived to fool investors to entrust their money to PIPC by promising that their investments would be guaranteed and that the maximum amount of loss that their investment could suffer will be limited to 30 percent.
Section 28 of the src bars any person from engaging in the buying or selling of securities in the country as a broker or dealer unless registered as such with the SEC.
“The named directors, officers, employees/consultants, agents and/or brokers engaged by PIPC Corp. were acting as salesmen because they were deriving commissions for each sale made. Based on the available record of the Commission, none of them were duly licensed by this Commission. Hence, they are equally criminally liable under the src,” the SEC said in its complaint.
Section 26 of the src prohibits any person from employing deceit in connection with the purchase or sale of any securities.
The SEC stressed that the PIPC officers and agents violated Section 26 by falsely assuring their investors that the principal amount of their investments had been guaranteed and the banks insured their investments.
The SEC added that the PIPC also told its investors that their money was used as collateral to trade foreign currencies in the Interbank Spot Currency Market, when in all probability no trading was performed.
“Indeed, no confirmation was given to the investors immediately upon the consummation of the alleged trade. The investors were not even required to set up banking relationships to facilitate delivery of the foreign currencies that PIPC was supposed to purchase as a consequence of their investments,” the SEC said.
“It was because of these representations that the complainants-investor agreed to part with their money. And now, such funds are nowhere to be found,” the Commission added.
The National Bureau of investigation had earlier filed estafa charges against the respondents, also before the DOJ.
The NBI, in its complaint, said that based on its investigation, there was a “grand conspiracy” on the part of the officers and agents of PIPC to defraud its investors.
Under the PIPC’s pyramid scheme, investors were required to shell out a minimum of $40,000 with a promised of 12 to 15 percent return of investment annually.
Those who cannot produce the minimum amount were allowed to have partners in order to produce the required minimum investment. The investor is then asked to identify a pair of currencies where he or she would like to place the investments.
However, the investors later learned that Liew, a Singaporean national, had carted away their money, which totalled $250 million.