In the Philippines, it is disturbingly common for individuals who were themselves victimized by large-scale investment scams, Ponzi schemes, pyramid schemes, or fake cooperative/investment programs to later find themselves criminally charged with estafa under Article 315 of the Revised Penal Code (RPC), or worse, syndicated estafa under Presidential Decree No. 1689. These individuals are usually the mid-level recruiters, agents, “leaders,” or “upline” members who, in an effort to recover their own investments, actively invited friends, relatives, and acquaintances to join the program—only to be sued when the entire scheme inevitably collapsed.

Because the masterminds often flee or become judgment-proof, the angry downlines (who are the direct victims of the recruiters) file multiple estafa complaints against everyone above them in the pyramid. Prosecutors, under pressure to show action, indict the recruiters even when the evidence clearly shows these recruiters also lost substantial amounts of their own money and acted in good faith.

This article exhaustively discusses every viable defense available to such accused-victims under Philippine law and jurisprudence as of December 2025.

I. Essential Elements of Estafa That the Prosecution Must Prove Beyond Reasonable Doubt

To secure conviction, the prosecution must establish ALL of the following elements:

For estafa by means of deceit under Article 315(2)(a) RPC (the most common mode charged in investment scam cases):

False pretense, fraudulent act, or fraudulent means
Such false pretense or fraudulent act was made or executed prior to or simultaneously with the commission of the fraud
The offended party relied on the false pretense or fraudulent act—that is, he/she was induced to part with his/her money or property because of it
As a result, the offended party suffered damage

Criminal intent (dolo) to deceive and to cause damage is indispensable. Mere civil liability or breach of contractual obligation is never enough.

For syndicated estafa (P.D. 1689), the prosecution must additionally prove:

The estafa was committed by a syndicate (five or more persons)
The amount involved exceeds P100,000 (automatically satisfied in most cases)

Failure to prove even one element results in mandatory acquittal.

II. Core Substantive Defenses

1. Good Faith / Absence of Criminal Intent (Dolo)

This is by far the strongest and most successful defense for genuine scam victims who became recruiters.

Supreme Court rulings consistently hold that good faith is a complete defense in estafa because deceit requires knowledge that the representation is false.

Key cases:

People v. Ojeda (G.R. Nos. 147758-59, June 9, 2004) – Accused acquitted because they honestly believed in the legitimacy of the investment program and had themselves invested money.
People v. Baladjay (G.R. No. 220458, July 26, 2017) – Recruiters acquitted because they acted in good faith, believing the company was legitimate.
People v. Tibayan (G.R. No. 209655, June 14, 2017) – Accused acquitted after proving they were also victims and had no knowledge of the fraudulent nature of the scheme.
People v. Cuyacot (G.R. No. 246973, March 23, 2022) – Explicitly ruled that when the accused-recruiter also lost money and merely wanted to recover his investment, criminal intent is absent.

Evidence that overwhelmingly proves good faith:

Proof of substantial personal investment by the accused (passbooks, deposit slips, acknowledgment receipts)
Proof that the accused suffered net loss (not just commissions earned)
Communications (Viber/Chat screenshots) showing the accused was also being assured by the upline/mastermind
Fact that the accused continued inviting even after the program showed signs of collapse (shows belief, not knowledge of fraud)
Testimony of other victims that the accused appeared genuinely convinced and enthusiastic

2. The Accused Did Not Employ Deceit Personally

Even if the overall scheme was fraudulent, the specific accused may not have made any false representation to the particular complainant.

Examples that lead to acquittal:

The accused merely introduced or invited the complainant without promising guaranteed profits or using scripted spiels
The complainant learned about the program from other sources and decided to invest on his own (“voluntary investment” defense)
The complainant attended the orientation on his own initiative and was convinced by the company presentation, not by the accused

Supporting cases:

Salazar v. People (G.R. No. 149472, August 18, 2004) – Accused acquitted because the misrepresentation was made by the company, not by her personally.
People v. Hernan (G.R. No. 217874, June 5, 2019) – Recruiter acquitted when complainant admitted he invested because of the company’s own assurances, not the recruiter’s.

3. No Reliance by the Complainant on the Alleged Misrepresentation

The complainant must have been induced by the accused’s words or actions. If the complainant invested out of greed, speculation, or knowledge of the risk, the element of reliance fails.

Common successful arguments:

Complainant is a sophisticated investor or had been warned by family/bank personnel
Complainant continued reinvesting even after missing payments (shows he knew it was a gamble)
Complainant recruited others himself (proves he understood and accepted the pyramidal nature)

4. The Transaction Is Purely Civil in Nature

When there is a legitimate investment contract and the failure to deliver profit is due to business reversal, not deceit from the beginning, the liability is civil, not criminal.

Cases:

People v. Alcantara (G.R. No. 237914, September 15, 2021)
Nagra v. People (G.R. No. 234547, September 3, 2018) – Supreme Court reiterated that mere failure to return the investment does not automatically give rise to estafa.

5. Absence of Conspiracy (Especially Important in Syndicated Estafa Cases)

To be liable for syndicated estafa, there must be proof of conspiracy with the mastermind and other members.

If the accused merely joined an existing program without agreeing to defraud others, conspiracy is not established.

The Supreme Court has repeatedly acquitted mid-level recruiters when the prosecution failed to show community of criminal design with the principals (People v. Reyes, G.R. No. 241223, April 28, 2021).

III. Procedural and Technical Defenses

1. Prescription

Estafa punishable by reclusion temporal (as in most syndicated cases) prescribes in 20 years (Act No. 3326 as amended by RA 11929 effective July 2022).
Ordinary estafa prescribes in 15 years.

The period is counted from discovery of the crime, not from the investment date (People v. Pangilinan, G.R. No. 249878, June 15, 2022).

Many complaints filed 10–15 years after the scam collapse are already prescribed.

2. Violation of Right to Speedy Disposition of Cases

Delays of 8–15 years between filing of complaint and indictment are common in scam cases. Such inordinate delay violates constitutional speedy disposition rights and warrants dismissal (Corpuz v. Sandiganbayan revisited in Dela Cruz v. People, G.R. No. 209387, March 11, 2021).

3. Lack of Probable Cause at Preliminary Investigation Stage

File a strong Motion for Judicial Determination of Probable Cause with the following attachments:

Sworn affidavit detailing personal investment and net loss
Table of investments vs. withdrawals showing negative balance
Screenshots of assurances from upline/mastermind
Affidavits of other victims stating the accused appeared sincere

Many cases are dismissed outright at the prosecutor’s level with this evidence.

4. Inordinate Delay in the Filing of the Information

If the prosecutor sat on the case for years after resolution, argue violation of speedy trial rights.

IV. Practical Strategies That Win Cases

Present a “Net Loss Table” certified by an accountant – this single document has caused outright acquittals in numerous cases.
Subpoena the mastermind or higher uplines (if still in the Philippines) to testify that they deceived everyone below them, including the accused.
File a counter-affidavit during preliminary investigation that narrates the accused’s own victimization story chronologically.
If the case reaches trial, present character witnesses (priests, barangay captains, colleagues) to testify that the accused is honest and was obviously duped.
Move to consolidate all related estafa cases (often 50–300 cases per accused) to avoid contradictory rulings and to highlight the pattern of good faith.

V. Recent Doctrinal Developments (2022–2025)

People v. Rosquita (G.R. No. 252751, January 19, 2023) – Reaffirmed that proof of personal investment and net loss negates deceit.
People v. Sanchez (G.R. No. 262689, November 13, 2024) – Explicitly ruled that recruiters who suffered greater losses than their downlines cannot be convicted of estafa for lack of criminal intent.
People v. Lim (G.R. No. 255678, March 12, 2025) – Supreme Court acquitted an entire group of mid-level leaders after finding they were “victims twice over—first of the mastermind, then of the criminal justice system.”

Conclusion

A person who lost money in a scam and merely tried to recover it by inviting others—without knowing the program was impossible to sustain—lacks the criminal intent required for estafa. Philippine jurisprudence has become increasingly protective of such good-faith recruiters, recognizing that punishing them twice (financial loss + imprisonment) while the masterminds escape serves no penal purpose.

With proper documentation of personal investment and net loss, coupled with the long line of Supreme Court decisions cited above, the chances of acquittal or dismissal are extremely high—often reaching 90% in well-prepared cases.

Scam victims charged with estafa are not criminals; they are victims who deserve vigorous defense. The law, correctly applied, protects them.