JEDDAH, 16 December 2002 — Is the Powerhomes project sweeping the overseas Filipino community in many parts of the world a good investment opportunity?

According to the Philippine Embassy in Riyadh, as far as the Philippine Securities and Exchange Commission (SEC) is concerned, investment contracts from Powerhomes Unlimited Corp. is illegal and its warning to the public against buying into the scheme is still in effect.

In a press statement yesterday, the embassy said the SEC wrote the Department of Foreign Affairs in answer to the embassy’s query and stated that the facts about Powerhomes last year remain unchanged.

The SEC had earlier issued a cease and desist order (CDO) against Powerhomes early last year “for engaging in unregistered investment contracts through the use of multilevel networking schemes.”

But the statement noted that Powerhomes contested the CDO before the Court of Appeals and managed to get the court into temporarily stopping the SEC from enforcing its order. The statement also said the SEC had referred the matter to the Department of Trade and Industry (DTI) “for investigation on whether Powerhomes is engaged in a pyramiding scheme.”

Last February, news reports in Manila quoted an SEC official as warning the public of the pending case at the Court of Appeals

Powerhomes had reportedly gained numerous adherents in the Kingdom and other Gulf countries because of its attractive offer.

Under Powerhomes’ sales scheme, a member may have the opportunity to own a house and lot package by paying an enrolment fee of $298.

As described by a Manila Times report last Feb. 9, “Upon subscription, a member is awarded his/her own business center-usually an Internet website wherein he can recruit other members for a fixed commission.

“Members are promised monthly incomes progressively escalating to as much as P3 million on the 12th month which would enable them to acquire a house and lot package at no further expense through the process of bringing in referrals.

The report went on to quote Tomas Syquia, head of the SEC’s Compliance and Enforcement department, as saying the Chamber of Real Estate and Builders Association (CREBA) has denied endorsing Powerhomes or its marketing program.

“The CREBA, according to Syquia, has in fact suspended the membership of Powerhomes.

It also quoted CREBA’s ethics committee as saying that “the general impression is that this ploy of enticing recruits with promise of home ownership and thousands of dollars in monthly income is fraudulent by reason of misrepresentation and deceit tantamount to act of estafa punishable under the Revised Penal Code.”

The Philippine Embassy statement yesterday said it sent a query to the SEC in Manila in view of numerous queries from the Filipino community in the Kingdom.