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JEDI BENTILLO

LAW 411
Atty. Oliver Saniel

GS 105 (4:30- 6:30 pm)


July 18, 2016

CASE No.4:

PEOPLE OF THE PHILIPPINES vs. PRISCILLA BALASA, et. al


G.R. No. 106357, September 3, 1998
ISSUE
Where there instances or acts of chain distribution or a pyramid sales scheme?
Cite or identify at least 10 acts.
Acts which justify the abovementioned case which proved that this case is a
large scale swindling scheme or Ponzi scheme:
1) Established modus operandi for investing and use of unapproved
securities
The modus operandi for investing as indicated as presented facts in
respective attached case (noted under (B)), provides us with factual
evidence of the use of printed form called a slot, which resembled a check
indicating important data needed for deposits.
Similar case of People of the Philippines vs. Vicente Menil, Jr., whereas
people also invested in the business were issued coupons, and similar
unorthodox practices like using of sales executives and/or ushers wrote
down in yellow pad paper as example.
Further noted, that the slots used in their operations are consequently
identified as securities which are not approved by the Securities and
Exchange Commission (SEC) as presented in attached case(noted as
(J)).
2) Foundation is a registered non-stock corporation
Case factual antecedents of this case presented that
the Panata Foundation of the Philippines, Inc., a non-stock, non-profit
corporation;(see attached case, noted as (A)).
Under the Corporation code of the Philippines, section 87, prohibits nonstock, non-profit corporations to engage in undertakings, such as the
investment business, where profit is the main or underlying
purpose. Although the non-stock corporation may obtain profits as an
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incident to its operation, such profits are not to be distributed among its
members but must be used for the furtherance of its purposes (R.A. 68,
Title 11, Section 87).
3) Investment scheme
The foundations investment scheme constitutes some form of swindling
or Ponzi scheme practiced at a wide scale. As previously cited,
characteristics in which is described to be:
a) An investment swindle in which high profits are promised from
fictitious sources and early investors are paid off with fund raised
from later ones.
As the foundation assured its would-be depositors that their money would
either be doubled after 21 days or tripled after 30 days (see attached
case, noted as (I)).

4) Inconsistent investment scheme


These inconsistencies in business operations and un-systematized
processing workflow in financial transactions as described in the case as
that there were times when it was the depositor who would choose that
his deposit be tripled, in which case, the deposit would mature later. (see
attached case, noted as (C)).

5) Duration of business operations


Similarly like in the case of People of the Philippines vs. Romero Martin,
and as previously cited, based on characterized Ponzi schemes or
sometimes called a pyramid sales scheme noted in Article 7394 (50), only
lasts weeks, or months at most, just like in this case whereas business
operations started sometime on July 1989 and on November 29, 1989,
however, the foundation did not open. (see attached case, noted as (D)).

6) Failure to deliver its obligations


Similar practices or pattern can be observed from previous case
discussed, in the case of People of the Philippines vs. Romero Martin
business establishment was discovered voluntary closed at a certain point
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of operations whereas certain obligations are not met and its investors are
bewildered and left to as how to recover their lost investments. In this
case, noted as (F) in the respective attached case denotes that
depositors began to demand reimbursement of their deposits, but the
foundation was unable to deliver.

7) Comprised as a syndicate
One of the characteristics of a basic Ponzi scheme comprises of a
syndicate as similarly described by the complainants in this case and
within the jurisdiction of this Honorable Court, the said accused
conspiring and confederating with one another and operating as a
syndicate, (see attached case, noted as (H)).

8) Foundation money had been invested in the stock market


On December 2, 1989, Priscilla Balasa announced that since the
foundations money had been invested in the stock market, it would
resume operations on December 4, 1989. (see attached case, noted as
(E)), which further strengthens the claim of embezzlement of funds.
9) Multiple Estafa Cases filed against the accused
On record, sixty-four (64) informations, all charging the offense of estafa
(see attached case, noted as (G)) to the accused party, signifying a
majority of people incurred damages.

10)Failed to resume operations


On December 2, 1989, Priscilla Balasa announced that since the
foundations money had been invested in the stock market, it would
resume operations on December 4, 1989. On that date, the foundation
remained closed (see attached case, noted as (E)). This announced act
to resume the foundations operations did not transpire as presented in
factual evidence within the case strengthens the courts rulings of
embezzlement of funds.

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