A Cebu cosmetics company has been accused of participating in a Ponzi scam
The Securities and Exchange Commission (SEC) has accused a local business that sells beauty, cosmetics, home, and personal care products of running a Ponzi scheme by soliciting investments without a government license or permission.
SCET Colleens Corporation, with offices at Unit 2004 Grand Residences on Apitong Street, was identified as the business in a statement issued by the SEC Cebu extension office officer-in-charge, lawyer Alma Marie Estrada-Dalena, on Tuesday.
According to a report from the SEC Enforcement and Investor Protection Department (EIPD), the business claimed to have a secondary license, but an examination subsequently revealed that the document it was utilizing was reportedly fraudulent.
She claims the company provides a variety of investment packages and promotions ranging from PHP3,800 to PHP1.08 million, all of which promise a monthly passive 5 to 8% return on investment as well as additional incentives with little or no risk.
“Any offer or guarantee of absurd rates of return with little or no risk,” Dalena added, “is an indicator of a potential Ponzi scam.”
When early investors are paid off their investments from the investments of new investors rather than from the company’s earnings, it is called a Ponzi scheme.
According to Dalena, these companies are likely to fail or shut down if they are unable to raise enough funds to finance their schemes owing to a lack of new investors.
The SEC launched the inquiry in response to public reports and questions about the company’s legal activities, which also claim to be a multi-level marketing business.
Shara Jane Casao Chavez, Kay Anne Cuizon Leyson, Edith Francisse Villegas Tablante, Earn Sta. Rita Saguindel, and Artemio Tarona Ponce Jr. were also named as incorporators by the SEC.
Edith Francisse Villegas Tablante, who claims to be the business’s chief financial officer, takes responsibility “on the problem confronting the company” on the website www.beautynailhairsalons.com.
The identities of individuals implicated will also be disclosed to the Bureau of Internal Revenue so that the necessary taxes or penalties may be imposed, according to an SEC advisory published on Sept. 2.
“May this serve as a fair reminder to the public, particularly during this epidemic, to always exercise great care before making or putting their money on organizations that promise ‘too good to be true’ investment packages similar to SCET Colleens Corporation,” the SEC-EIPD said in a statement.
Dalena advised the public to always verify with the SEC through its official website, www.sec.gov.ph, to see whether the business in which they are putting their money has a government license.
Individuals or companies who participate in investment taking must also obtain a secondary license, she said, adding that the SEC’s Certificate of Incorporation is insufficient to allow the conduct since investment solicitation and investment-taking without a secondary license are illegal.
According to Sections 28 and 73 of the Securities Regulation Code, salesmen, brokers, dealers, or agents, as well as anyone convincing people to invest in a Ponzi scheme, including solicitation and recruitment through the internet, may face criminal prosecution and a penalty of up to PHP5 million or 21 years in prison, or both, Dalena added.