Overview

In many Philippine investment scams—Ponzi schemes, “high-yield” online platforms, crypto “guaranteed returns,” pyramid-style recruitment programs—the first point of contact is often a friend, relative, coworker, or online acquaintance who invited you. When the scheme collapses, a common question follows:

Can the recruiter/inviter be sued—even if they weren’t the “owner” of the scam?

Under Philippine law, the answer is often yes, but it depends on what the inviter did, what they knew (or should have known), what they gained, and how your loss happened. Liability can be criminal, civil, or both—and sometimes extends even to those who claim they were also “victims.”

This article maps the key doctrines, common fact patterns, and practical options.

Key idea: “Inviting” alone is not always enough—but “inducing” often is

Philippine liability generally turns on whether the inviter merely mentioned something in passing, or actively induced you to invest through acts such as:

making representations about safety/legitimacy/returns,
soliciting money or facilitating payment,
promising returns or guaranteeing “no risk,”
showing “proofs” designed to persuade,
earning commissions or benefits from your investment,
continuing recruitment after red flags appeared.

The law looks at conduct and causation: did the inviter’s actions materially lead to your decision and loss?

Potential legal paths against the recruiter

You can often proceed on multiple tracks:

Criminal cases (punishment + restitution)
Civil cases (money recovery + damages)
Regulatory complaints (SEC/other agencies; can support criminal/civil actions)

Each has different standards, evidence needs, and timelines.

Criminal liability: when the recruiter can be charged

1) Estafa (Swindling) under the Revised Penal Code

Estafa is the most common criminal charge arising from investment scams.

Recruiters can be charged if they:

used false pretenses or fraudulent acts to obtain your money,
made misrepresentations you relied on,
acted with deceit that caused damage.

Even if the recruiter wasn’t the “operator,” they can be liable if they were part of the scheme’s inducement machinery.

Important: Criminal liability can attach through conspiracy—when people act together toward a common fraudulent purpose. Direct proof of an explicit agreement is not always required; it can be inferred from coordinated acts (e.g., scripted pitches, synchronized “proof” posts, coordinated collection/forwarding of funds, commission structures).

Practical markers prosecutors look for

recruiter repeatedly pitched returns/legitimacy
recruiter facilitated transfer and tracked payments
recruiter handled withdrawals or excuses for delays
recruiter got a cut/commission
recruiter continued after complaints surfaced

2) Syndicated Estafa (commonly invoked in large scams)

When estafa is committed by a group in an organized manner, prosecution may pursue syndicated estafa, which is treated more severely. Recruiters can be included if evidence shows they functioned as part of the syndicate (even as “field” recruiters), not merely incidental participants.

3) Securities Regulation Code exposure (RA 8799) — selling/soliciting unregistered securities

Many “investment” offers are legally treated as securities. If the product is an “investment contract” (money invested in a common enterprise with expectation of profits primarily from others’ efforts), offering or selling it without proper registration and authority can trigger liability.

Recruiters may be exposed if they:

offered or sold the investment to the public,
acted as unlicensed salesmen/agents,
promoted an unregistered investment that the SEC later identifies as illegal.

In practice, SEC findings can strengthen criminal complaints and settlement leverage.

4) Other possible criminal angles (fact-dependent)

Other Deceits (for misleading representations not squarely under estafa provisions)
Anti-Money Laundering Act involvement (usually focused on operators, but recruiters handling flows, layering, or cash-outs may be implicated depending on evidence and thresholds; AMLC processes are specialized)
Cybercrime Prevention Act (RA 10175) if the fraud is committed using ICT (online messages, platforms, coordinated phishing-style inducement). This can affect venue, evidence handling, and potentially aggravate consequences.
Falsification if fake documents/receipts/IDs were used.

Bottom line: Criminal liability for a recruiter is strongest when you can show deceit + inducement + participation (including collecting money, promising returns, or earning commissions).

Civil liability: how you can recover money from the recruiter

Even when criminal proof is harder, civil recovery may still be viable.

A) Fraud / Abuse of Rights / Bad Faith (Civil Code principles)

A recruiter can be civilly liable if they:

made false statements of fact,
acted in bad faith or with intent to mislead,
abused their relationship/trust to induce you.

Civil standards use preponderance of evidence (more likely than not), which is a lower bar than “proof beyond reasonable doubt.”

B) Quasi-delict (tort) / Negligent misrepresentation

Even if the recruiter claims they didn’t intend to deceive, they may be liable if:

they asserted claims as true without reasonable basis,
they held themselves out as knowledgeable, and
you reasonably relied and were harmed.

This is especially relevant where recruiters:

confidently declared SEC registration that didn’t exist,
promised “guaranteed returns,”
claimed “insured,” “bank-backed,” or “legit,”
discouraged verification (“don’t overthink; this is exclusive”),
pushed urgency (“last slot,” “cutoff tonight”).

C) Unjust enrichment / in rem verso

If the recruiter personally received money or commissions traceable to your investment, you can pursue recovery on the principle that no one should unjustly enrich themselves at another’s expense.

This can be powerful when:

you paid the recruiter directly,
recruiter kept a referral fee,
recruiter cashed out “rewards” funded by later investors.

D) Solutio indebiti (payment by mistake)

If you can frame your payment as made under a mistaken belief induced by misrepresentation—especially where you paid to the recruiter—this doctrine can support restitution. (It is typically cleaner where payment was made without a valid obligation.)

E) Agency / representative liability

If the recruiter acted as an agent/representative of the scam entity (even informally), their acts within that role can expose them. Evidence includes:

recruitment scripts from the company,
official group chats and assigned quotas,
“team leader” titles, ranks, dashboards,
instructions on handling deposits/withdrawals,
centralized marketing materials and coordinated postings.

“But the recruiter says they’re a victim too.” Does that excuse them?

Sometimes yes, sometimes no.

Good faith can be a defense—but it’s not automatic

A recruiter who truly acted in good faith—e.g., they invested first, believed it was legitimate, and merely shared casually—may have a stronger defense.

But good faith weakens when:

they profited from recruitment,
they made assertive guarantees,
they discouraged verification,
they kept recruiting after warnings/complaints,
they controlled or handled funds,
they deleted messages, coached stories, or obstructed complaints.

A person can be both initially deceived and later become liable if they continue recruiting after circumstances made the fraud reasonably apparent.

“I didn’t know” vs “I should have known”

Even without actual knowledge, civil liability can arise where a recruiter should have known their claims lacked basis, especially when they presented certainty and pressured reliance.

The “levels” of recruiter involvement (and how liability typically scales)

Level 1: Casual mention

“I’m trying this platform; you might want to look.” Liability: usually weaker unless paired with false assurances or concealment.

Level 2: Active persuasion

Explains returns, sends “proofs,” insists it’s safe, pushes deadlines. Liability: moderate to strong civil; criminal possible if deceit is provable.

Level 3: Transaction facilitator

Collects your money, instructs you where to send, confirms deposits, tracks payouts. Liability: strong; looks like participation in the fraudulent taking.

Level 4: Team leader / organized recruiter

Has downlines, earns commissions, attends trainings, repeats scripts, handles disputes. Liability: very strong; conspiracy/syndicated theories become more plausible.

What you must prove (practically)

For criminal (estafa-like theories)

You typically need evidence of:

Deceit / false pretenses (what was said or shown)
Reliance (you invested because of it)
Damage (loss of money)
Connection between the recruiter’s acts and your payment
Participation (especially for conspiracy)

For civil

You typically need:

A wrongful act (fraud, bad faith, negligence, unjust enrichment)
Damage
Causation
Proof by preponderance

Evidence that matters most (Philippine reality)

Digital communications

chat logs (Messenger/Telegram/Viber/WhatsApp)
voice notes, call recordings (handle carefully—admissibility and privacy considerations vary by circumstances)
group chat posts
deleted-message traces (screenshots, participant copies)

Marketing materials and “proofs”

posters promising fixed returns
payout screenshots used for persuasion
“SEC registered” claims
rank/commission tables and dashboards

Money trail

bank transfer receipts, e-wallet records
names/handles of recipients
deposit instructions sent by recruiter
confirmations from recruiter after you paid
commission transfers to recruiter (if traceable)

Witnesses

other recruits invited by the same person
people in the same “team” structure
anyone who saw the pitch

Basic authenticity/chain of custody discipline

Courts care about credibility. Preserve originals where possible, export chat histories, keep device backups, and avoid “editing” screenshots.

Where and how cases are filed (high-level)

Criminal route

File a complaint-affidavit with the Office of the City/Provincial Prosecutor where venue is proper (often where you were induced, where you paid, or where relevant acts occurred—online cases can be flexible).
Attach evidence and identify respondents (operators + recruiters).
Parallel reporting to law enforcement units that handle cyber-fraud can help with coordination and evidence preservation.

Civil route

File for sum of money/damages in the appropriate court depending on amount and rules on jurisdiction.
If amounts qualify and the structure fits, small claims may be considered, but many scam cases involve multiple defendants, fraud complexities, or amounts that don’t fit small claims requirements.

Regulatory route (often highly strategic)

Complaints to the SEC (for illegal solicitation / unregistered investments) can create official records, advisories, and findings that support prosecution and settlement pressure.

Damages and remedies you can seek

Restitution / return of principal

Core goal: recover what you paid.

Interest

Courts may award legal interest depending on the basis and timing.

Moral damages

Possible when bad faith, fraud, or abuse of trust caused anxiety, shame, sleeplessness, or similar harm—proof is still required.

Exemplary damages

Possible to deter similar conduct, typically when defendant’s conduct is particularly wanton or in bad faith.

Attorney’s fees and costs

Not automatic; must be justified under recognized grounds.

Provisional remedies (case-dependent)

Attachment or other measures may be sought if legal grounds exist and requirements are met, especially where there’s risk of dissipation.

Defenses recruiters commonly raise (and what usually defeats them)

“I didn’t receive money from you.”

Not always decisive. If they induced you to pay the scam, they may still be liable for fraud/tort theories even without direct receipt—especially if they earned indirect benefits or acted as part of the selling effort.

“I just shared; you decided on your own.”

If evidence shows they made specific assurances (guarantees, legitimacy claims) and pressured reliance, this defense weakens.

“I believed it was legitimate.”

Good faith is stronger when they made no guarantees, encouraged verification, and stopped recruiting once concerns arose. It weakens when they held themselves out as certain, used scripted claims, or ignored red flags.

“No written contract between us.”

Fraud/tort/unjust enrichment claims do not necessarily require a written contract.

Common fact patterns and likely outcomes

1) Recruiter promised “guaranteed 10% weekly,” urged urgency, sent payout “proofs”

Exposure: strong civil; criminal plausible if deceit and inducement are clear.

2) Recruiter collected funds personally and forwarded to “manager”

Exposure: very strong; looks like direct participation.

3) Recruiter is a “team leader” with downlines and commission tracking

Exposure: very strong; conspiracy/syndicated framing becomes more realistic.

4) Recruiter casually mentioned it once, no promises, you independently invested

Exposure: weaker; case may focus on operators unless other evidence exists.

Practical caution: suing only the recruiter may be strategically incomplete

Recruiters can be the most reachable defendants, but in many scams:

recruiters lack assets,
money is upstream with operators,
recovery improves when you identify the full chain (recipient accounts, wallets, organizers).

Still, pursuing recruiters can be effective when:

they have assets,
they earned substantial commissions,
their evidence helps identify higher-level actors,
they functioned as local collection points.

Time limits (prescription) — why speed matters

Prescription depends on the cause of action and penalties involved, and can be affected by interruptions, filings, and procedural events. As a practical matter:

Move quickly to preserve digital evidence and money trails.
Delays can make tracing funds and identifying defendants significantly harder even before legal deadlines are reached.

Core takeaways

Yes, you can often sue the person who invited you, especially if they actively induced you through misrepresentations, handled funds, earned commissions, or continued recruiting amid red flags.
Recruiter liability can be criminal (estafa and related theories) and/or civil (fraud, quasi-delict, unjust enrichment).
The case strength depends less on labels (“inviter,” “upline”) and more on provable acts: what was promised, what was done, what was received, and what you relied on.
The most decisive evidence is usually messages + money trail + proof of recruiter benefit/role.

Quick self-check: do you likely have a claim against the recruiter?

You are in stronger territory if two or more are true:

They said it was guaranteed / no risk / surely legit
They claimed SEC registration or authority without proof
They pressured urgency or discouraged verification
They instructed you where/how to pay
They confirmed receipt or tracked your payouts
They earned commissions from your deposit
They kept recruiting after complaints started
They coordinated with others using scripts, ranks, “teams,” or collection systems

If most are “no,” your best target may be the operators—unless the recruiter directly received your money.

Disclaimer

This article is general legal information based on Philippine legal concepts and common enforcement patterns. It is not legal advice and does not create a lawyer-client relationship.