Wellcons Unlimited Systems, Inc. (Wellcons)

February 3, 2022 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT SEC ADVISORY The Securities and Exchange Commission has received information that individuals or group of individuals representing WELLCONS UNLIMITED SYSTEMS, INC. (WELLCONS) are enticing the public to invest their money in the said entity with the promise of monetary rewards or profits. Records of the Commission show that WELLCONS UNLIMITED SYSTEMS, INC. (WELLCONS) was registered with the Commission on 19 April 2021 with the following primary purpose: IDSEAH Its principal office is located at P 15A, National Highway, Bagontaas, City of Valencia, Bukidnon, Region X . Based on an online posts of its members, the company is headed by MERARI PAILAGAO . Moreover, WELLCONS FOOD SUPPLEMENT TRADING is registered with the Department of Trade and Industry (DTI) under the name of its owner, MERARIE ESPUERTA PAILAGAO , however, its business scope is only within the City/Municipality of Region X (Northern Mindanao)-Bukidnon, City of Valencia. BUSINESS NAME BUSINESS TERRITORY OWNER'S NAME CERTIFICATE NO./BNN REGISTRATION DATE STATUS BUSINESS SCOPE WELLCONS FOOD SUPPLEMENT TRADING CITY/MUNICIPALITY-REGION X (NORTHERN MINDANAO)-BUKIDNON, CITY OF VALENCIA MERARIE ESPUERTA PAILAGAO 2332964 Dec. 03, 2020 05:40 PM DTI-Registered CITY/MUNICIPALITY The persons involved in WELLCONS are enticing prospective individuals to join the company through the following schemes: I. BINARY SYSTEM Under this system, interested individuals can choose from three membership packages with the corresponding membership fees: a. Fast-track 2,500.00 (which were offered at its promo price of P1,890.00); b. Global 5,890.00; and c. Executive 13,890.00. BINARY ENTRY PACKAGE (Benefits/ways of earnings) Entry Package Package Amount Points/ Package Direct Referral Bonus Indirect Referral Bonus Sales Match Bonus Direct Sales Match Bonus FAST TRACK P2,500.00 50 pts. P200.00 P50.00 P500.00 P250.00 GLOBAL P5,890.00 150 pts. P400.00 P100.00 P1,500.00 P500.00 EXECUTIVE P13,890.00 300 pts. P800.00 P200.00 P3,000.00 P1,000.00 For the above-mentioned membership packages, there are five ways to earn: 1. 50% Discount in all wellness products; aCIHcD 2. Direct Referral Bonus earn for every direct invites; 3. Indirect Referral Bonus earn for every invites of invites; 4. Sales Match Bonus earn for every left and right invites of your structure; and 5. Direct Matching Bonus earn 50% for every match even if only on one-side of the structure. Additional features: > Points earned are convertible or redeemable to assorted grocery items, appliances, etc. through the Pangkabuhayan System > Maximum of seven accounts > Earn Pairing Bonus even in one leg > Maximum pairs/day to earn with required 12 hrs. and 24 hrs. entry cycle Fast Track 12 pairs, 6 pairs per cycle Global 18 pairs, 9 pairs per cycle Executive 48 pairs, 24 pairs per cycle > Maximum earnings per day Fast Track P9,000.00 Global P15,000.00 Executive P32,000.00 II. PANGKABUHAYAN SYSTEM Passive & Active Income Note: To avail the benefits of the Pangkabuhayan System, one must have a Binary account. FEATURES: > Each Pangkabuhayan Package comes "with consumable products." > Points can be exchanged for grocery items which are also consumable goods. > Profit sharing every time WELLCONS earns. > Accounts can be upgraded for a higher Return of Purchase (ROP). > Earnings even without invites where investor-members do not have to do anything, thus, known as the company's PASSIVE INCOME. Below are the packages under the Pangkabuhayan System where the flagship of the ways of earnings is its so-called " Daily Reward ." The purported "Return of Purchase" is in reality a return-on-the-capital (which in turn referred below as "Amount Purchase"). Pangkabuhayan Package Amount Purchase Daily Reward Return of Purchase BRONZE (15 pts.) P1,500.00 P15.00 P3,000.00 SILVER (25 pts.) P2,500.00 P25.00 P5,000.00 GOLD (50 pts.) P5,000.00 P50.00 P10,000.00 Return of Purchase (ROP) or Maturity. After maturity an individual can repurchase the same package. Hereunder are the four (4) ways of earnings under the Pangkabuhayan System: Daily Rewards The above scheme is actually the "double-your-money" scheme of the company where the package/s availed of by the member will earn Php3,000.00, Php5,000.00, and Php10,000.00 for Bronze (worth Php1,500.00), Silver (worth Php2,500.00), and Gold (worth Php10,000.00), respectively. However, the guaranteed income of Php3,000.00, Php5,000.00, and Php10,000.00 shall be given to the investor based on a daily rewards of Php15.00, Php25.00, or Php50.00 depending on the package availed of, which total guaranteed income could be earned within more or less six (6) months . Profit Sharing; Loyalty Bonus; Global Pool Bonus: Investor-members belonging to the company's Top 20,000 members shall be entitled to Profit Sharing equivalent to 20% of the company's earnings to be distributed among them, Loyalty Bonus equivalent to 10% of the company's earnings shall be distributed among the Top 5,000 members, and Global Pool Reward equivalent to 5% of the company's earnings shall be distributed among the Top 1,000 members. Further, the company has an Active Members' Income which is applicable to those who availed of the Pangkabuhayan System. This is to obtain a faster maturity of one's account, thus, a shorter term to earn the guaranteed income. ScHADI ACTIVE MEMBERS INCOME UNILEVEL BONUS PANGKABUHAYAN LEADERSHIP BONUS INFINITY BONUS LEVEL 1 10% LEVEL 1 5% LEVEL 2 1% LEVEL 2 1% LEVEL 3 0.5% LEVEL 3 0.5% LEVEL 4 0.5% LEVEL 4 0.5% LEVEL 5 0.5% LEVEL 5 0.5% Additional Earnings for every Pangkabuhayan package purchased by invites (Level 1) and the invites of Level 1 up to Level 5. Under these scheme, an investor-member shall be entitled to Leadership Bonus equivalent to 10% of his/her direct recruits' (Level 1) repeat availment of Pangkabuhayan System and 1% for Level 2's and 0.5% for Level 3's, 4's, and 5's recruits. On the other hand, Infinity Bonus can be enjoyed by any member of the company. Accordingly, WELLCONS UNLIMITED SYSTEMS, INC. lures the public to invest in their scheme mainly through referral system designed to encourage its members to recruit others in order to earn income instead of selling on the merits of its products. The scheme of WELLCONS UNLIMITED SYSTEMS, INC. is a hybrid of a pyramiding and a ponzi scheme . The Pyramiding scheme involves securities because for payment of a sum of money, often nominal, the investor participates in a recruitment scheme that promises a stream of profits. The scheme that requires recruitment in a two-pronged structure takes the form of a pyramid, one that grows wider at the bottom, and thrives with the supply of new recruits to the scheme. Here, the recruitment fees collected from new recruits are used to pay the recruiting commissions to earlier recruits. Further, applying the Howey Test , the scheme of WELLCONS UNLIMITED SYSTEMS, INC. involves the offering and sale of securities in the form of Investment Contracts, to the public because the investors need not exert any effort other than to invest or place monies in WELLCONS UNLIMITED SYSTEMS, INC. in order to generate income. This is highlighted through the Pangkabuhayan System of the company. Since this scheme involves the sale of securities to the public, the Securities Regulation Code (SRC) requires that these securities are duly registered with the Commission and that the concerned corporation and/or its agents have appropriate registration and/or license to sell such securities to the public pursuant to Sections 8 and 28 of the SRC . Per record of the Commission, WELLCONS UNLIMITED SYSTEMS, INC. (WELLCONS) although registered with the Commission, has NO SECONDARY LICENSE to solicit, accept or take investments/placements from the public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC) since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the Securities Regulation Code (SRC). Notably, the schemes that is being offered by MERARI PAILAGAO through WELLCONS UNLIMITED SYSTEMS, INC. is not within its allowed activities. aICcHA To emphasize, registration of a corporation merely grants it juridical personality and must conduct business in accordance with the purpose for which it was established and the law requires whenever such entity shall solicit investment, it must have secured the necessary secondary license. Accordingly, the Commission warns all unscrupulous individuals and/or entities that strict penalties are imposed for violations of the Securities Regulation Code, the Revised Corporation Code and such other laws, rules and regulations enforced by the Commission. Hence, those who act as salesmen, brokers, dealers or agents or claim to act as such of WELLCONS UNLIMITED SYSTEMS, INC. (WELLCONS) in selling or convincing people to invest in the investment scheme being offered by said entity including solicitations and recruitment through the internet may be prosecuted and held criminally liable under Section 28 of the SRC and penalized with a maximum fine of Five Million pesos (Php5,000,000.00) or penalty of Twenty-one (21) years of imprisonment or both pursuant to Section 73 of the SRC. Also, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public may incur criminal liability, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of Securities and Exchange Commission vs. Oudine Santos (G.R. No. 195542, 19 March 2014). Further, the names of all those involved will be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be correspondingly assessed. In view thereof, the public is advised NOT TO INVEST or STOP INVESTING in any investment scheme being offered by WELLCONS UNLIMITED SYSTEMS, INC. (WELLCONS) and exercise caution in dealing with any individuals or group of persons soliciting investments or recruiting investors for and on behalf of the said company. Should you have any information regarding any investment solicitation by any individuals or group of individuals on behalf of MERARI PAILAGAO through WELLCONS UNLIMITED SYSTEMS, INC. , please send your report to the ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT at [emailprotected]. For the guidance of the public. Pasay City, February 3, 2022.