Note: This material is an academic-style overview, not a substitute for personalised legal advice. Statutes are cited as amended to 1 June 2025.

I. Overview

“Investment scams” in the Philippines typically involve a promise of unusually high, quick or guaranteed returns, collected from the public without the licence required by the Securities Regulation Code (SRC, R.A. 8799). When the promoter fails to deliver and flees or refuses to refund, the criminal charge most commonly filed is estafa under Article 315 of the Revised Penal Code (RPC), sometimes upgraded to syndicated estafa under P.D. 1689. The same acts may simultaneously violate R.A. 8799, anti-pyramiding rules, the Revised Corporation Code (R.A. 11232) and even the Anti-Money Laundering Act (AMLA).

Because estafa is rooted in deceit and abuse of confidence, it squarely fits the investor-victim scenario: the “investment” is merely the bait used to obtain the victim’s money.

II. Statutory Bases

Law	Key provisions implicated	Penalty range (as at 2025)
RPC Art. 315 (simple estafa)	¶1(b) - misappropriation or conversion; ¶2(a) - false pretences or fraudulent acts re fictitious business, powers, etc.	Prisión correccional to prisión mayor (6 mos-12 yrs), amount-indexed under R.A. 10951 (2017).
P.D. 1689 (syndicated estafa)	Estafa committed by 5 or more persons or by large-scale fraud (≥ ₱10 M) against the investing public.	Reclusión perpetua (life) in lieu of the death penalty (R.A. 9346).
R.A. 8799 (SRC)	§§8, 26, 28 – selling unregistered securities, acting as unlicensed broker, fraud in connection with securities.	Fine up to ₱5 M per offence and/or 7-21 yrs imprisonment.
R.A. 11232 (RCC)	§§159-161 – liabilities of directors/officers who know of illegal solicitations or use the corporation for fraud.	Fine and/or imprisonment up to 5 yrs.
AMLA (R.A. 9160, as amended by R.A. 11521)	Scam proceeds are “dirty money”; assets may be frozen ex parte upon SEC or DOJ referral.	Separate prosecution for money-laundering; penalty up to reclusión temporal and heavy fines.

III. Elements of Estafa in Investment Schemes

A. Estafa by Misappropriation (Art. 315 ¶1(b))

Money or property is received in trust, on commission, for administration, or under obligation to return or deliver.
The accused misappropriate, convert, or deny receipt.
Prejudice results.

Typical fact pattern: “Pay ₱100 k today; we’ll trade forex and give you ₱150 k in a month.” Funds are commingled or spent elsewhere, and principal cannot be returned.

B. Estafa by False Pretence (Art. 315 ¶2(a))

False representation of identity, business or power (e.g., “SEC-registered,” “licensed trader”).
Representation is made before or at the time the money is obtained.
Victim relies on it.
Damage occurs.

Typical fact pattern: Use of cloned or forged SEC certificate, false claim of Central Bank approval, pyramid “re-investment” charts, fictitious resort development.

C. Syndicated or Large-Scale Estafa

Five-person rule: If the syndicate consists of ≥ 5 conspirators, or
Large-scale rule: Single accused but fraud ≥ ₱10 M or involves “the banking or quasi-banking system.”
The offence is a special complex crime; venue may lie where money was solicited or where refusal to refund occurred.

IV. Penalty Computation under R.A. 10951

Amount defrauded	Penalty (simple estafa)
≤ ₱40 k	Prisión correccional (6 mos-2 yrs-4 mos)

₱40 k–≤ ₱1.2 M | Graduated prisión correccional to prisión mayor (max 8 yrs-8 mos) ₱1.2 M | Maximum prisión mayor (up to 12 yrs) + one‐year increment for every additional ₱1.2 M but cap at 20 yrs (teoría de la pena máxima); then convert to the next higher penalty (reclusión temporal) if still insufficient.

V. Overlapping Offences and Doctrines

Issue	Treatment
Double jeopardy	Estafa (RPC) and SRC violations protect different societal interests — property vs. market integrity — hence prosecution under both does not offend double jeopardy (People v. Santos, G.R. 247917, 29 Sept 2021).
BP 22 (bouncing checks)	Post-dated pay-out cheques that bounce give rise to separate BP 22 counts. Payment after filing does not extinguish liability.
Fraud vs. Securities law	SEC may issue Cease-and-Desist, asset freeze (in coordination with AMLC), and corporate dissolution. These are administrative and civil measures, independent of criminal estafa proceedings.
Novation	Subsequent restructuring, compromise, or partial restitution does not erase criminal liability (People v. Ostrea, G.R. 127179, 23 June 2000).
Good-faith defence	The accused must prove actual intent to perform and transparent fund handling; empty assurances and lack of records negate good faith.

VI. Procedural Path (Victim’s Perspective)

SEC Complaint – file sworn complaint with the Enforcement and Investor Protection Department (EIPD). SEC may issue advisory, CDO, asset freeze and refer to DOJ.
Criminal Affidavit – lodge before the Office of the City/Provincial Prosecutor where solicitation occurred or refusal to return funds took place.
Preliminary Investigation – respondent files counter-affidavit; parties submit position papers; prosecutor resolves probable cause.
Information – if indicted, information is filed in the Regional Trial Court (commercial court if syndicated).
Civil Action impliedly instituted – victims may recover actual, moral, temperate and exemplary damages plus interest (Art. 104-107 RPC; Art. 2219 Civil Code). Separate civil suits are allowed but often suspended under Sec. 2, Rule 111, Rules of Criminal Procedure.
Asset Recovery – apply for writs of attachment, AMLC freeze orders or forfeiture under R.A. 11521 to preserve assets for restitution.

VII. Key Jurisprudence

Case	G.R. No. / Date	Doctrine
People v. Ostrea	127179, 23 Jun 2000	Payment/novation after demand does not extinguish estafa.
People v. Balasa	55884-85, 31 Aug 1992	“Talpak”/Ponzi as estafa-by-false-pretence; venue where demand made and payment refused.
People v. Dizon	199687-88, 13 Jul 2015	Failure to deliver investment returns = estafa; good faith must be contemporaneous.
People v. Santos	247917, 29 Sep 2021	Estafa and SRC violations may coexist; no double jeopardy.
People v. Spouses Pabalan	218812, 11 Dec 2019	Use of fictitious name and unlicensed brokerage = Art. 315 ¶2(a).

VIII. Interaction with Other Regulatory Regimes

A. AML/CTF

Investment scams are predicate crimes; SEC or NBI may request ex parte freeze; assets frozen for 20 days extendible via Court of Appeals.
AMLC may initiate civil forfeiture independent of conviction.

B. Financial Products and Services Consumer Protection Act (R.A. 11765, 2022)

Though aimed at banks and fintech, Section 13 empowers Bangko Sentral/SEC to order restitution for abusive sales tactics, potentially usable against operators offering “e-wallet high-yield” scams.

C. Cybercrime Act (R.A. 10175)

When solicitation, deception or misappropriation is committed online, estafa becomes an ICT-facilitated offence, attracting the penalty next higher in degree (Art. 315 in relation to Sec. 6, R.A. 10175).

IX. Defences and Mitigating Factors

Lack of deceit – if investor was told of clear, quantified risks and agreed, liability may tilt to civil.
Accounting transparency – complete, audited records showing actual deployment of funds.
Restitution before demand – may be considered by court in imposing the minimum period.
Minor participation – under Art. 13 RPC, lesser role can yield mitigating circumstance of ‘immediate voluntary surrender’ or ‘minor participation’.

X. Practical Guidance for Practitioners and Victims

Document everything: receipts, chat logs, marketing materials, deposit slips—crucial to establishing both deceit and damage.
File SEC complaint early: a CDO/freeze order can preserve assets before they are dissipated or wired offshore.
Consider class approach: multiple complainants strengthen syndicated estafa and maximise asset-freeze thresholds.
Coordinate with AMLC: parallel AML investigations broaden reach to banks and remittance corridors.
Beware settlement traps: signing quitclaims may waive civil claims without extinguishing criminal exposure but can weaken negotiating position.

XI. Recent Developments (2023-2025 Snapshot)

SEC-EIPD Advisory Surge: From 2023 to April 2025 the SEC issued > 200 public advisories against online “double-your-money” apps, now archived on its website.
Supreme Court A.M. 22-07-02-SC (2024): designated all syndicated estafa cases as commercial court cases, aimed at faster asset tracing.
NBI Cyber-Fraud Division MOA (2024) with AMLC enabling real-time wallet freezing within 24 hours of complaint.
First conviction under R.A. 11765 (2025): People v. Castro, Makati RTC Br. 149, applying dual liability under Art. 315 and Sec. 33 of R.A. 11765 for crypto-yield scam.

XII. Conclusion

Under Philippine law, the liability landscape for investment-scam perpetrators is multi-layered: criminal (estafa, syndicated estafa, SRC offences, money-laundering), civil (restitution and damages) and administrative (SEC sanctions, corporate dissolution). Estafa remains the work-horse charge because its elements—deceit, abuse of confidence and prejudice—mirror the anatomy of a scam. Recent statutory upgrades (R.A. 10951, R.A. 11521, and R.A. 11765) and institutional coordination (SEC-AMLC-NBI) have sharpened both penalties and asset recovery tools. For counsel, early evidence building and asset preservation are critical; for investors, vigilance and verification of SEC registration are the first and cheapest line of defence.

Prepared 1 June 2025, Manila, Philippines.