Practice question
Organizers lure investors through a proved fictitious profitable business, then pay early promised returns solely from later investors’ capital. All syndicated-estafa requirements are established. Do those early payouts alone establish that the operation was genuine?
- Yes; any early payment conclusively proves all representations true.
- Yes; later investors’ capital is always operating profit.
- Yes; an early payout automatically extinguishes later victims’ losses.
- No; such payouts are consistent with the Ponzi mechanism described in Baladjay.
- Yes; paying one participant legalizes fraud against everyone else.
Legal references
- People v. Baladjay, G.R. No. 220458, July 26, 2017, main decision, deceit, Ponzi operation and participation evidence under PD 1689: https://lawphil.net/judjuris/juri2017/jul2017/gr_220458_2017.html
- PD 1689, Section 1, covered syndicated swindling: https://lawphil.net/statutes/presdecs/pd1980/pd_1689_1980.html
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