Lapu-Lapu BPO case exposes limits of authorities going after US author scams

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With victims abroad, all authorities can do is check business papers, says the city attorney

CEBU CITY, Philippines – On a tip from three of its workers, members of the Lapu-Lapu City Task Force Against Illegal Business Operations shut down two offices of Spotlight Digital Business Process Outsourcing on September 26, 2024. Spotlight was accused of scamming authors based in the United States. (READ: Cebu becomes a hub for scam targeting self-published authors in the US)

The employees contacted the hotline set up by Lapu-Lapu Mayor Junard “Ahong” Chan. The task force was created after the discovery of an offshore gaming operator hub in Barangay Agus on August 31, 2024. Authorities out to rescue Indonesians stumbled upon the Philippine offshore gaming operators (POGO) hub in a raid that found at least 162 foreigners.

The cease-and-desist order against Spotlight Digital was based on violations of its business permit, Lapu-Lapu City Attorney James Sayson told Rappler. The company’s paperwork was for another location, but it had transferred.

PADLOCKED. The Spotlight Digital office near the Lapu-Lapu City Public market. This is where the company worked on publishing operations. It has now been closed. Max Limpag/Rappler

“I felt that we’re like criminals because it was all about POGO that time,” Mel told Rappler. Mel, an employee of Spotlight Digital, only gave her first name.

Sayson said workers were so stunned by the raid that some jumped off the stairs. The two offices were located on upper floors.

After the raids, Criminal Investigation and Detection Group (CIDG) Lapu-Lapu chief Richard John Macachor warned that unless criminal complaints were filed, the closure would likely be temporary. He was correct.

Sayson said authorities subsequently issued new papers and allowed the two offices to resume operations after police said they couldn’t establish a crime. 

Apart from checking business papers and compliance with local regulations, there was nothing authorities could do against alleged scam operators, he told Rappler.

“They are not illegal,” said an official of the City Treasurer’s Office at the off-site business permit renewal in Hoops Dome in Barangay Gun-ob when Rappler asked for Spotlight Digital’s business details.

Rappler checked with the Lapu-Lapu City CIDG field office, and operatives there said the case files had been transferred to higher headquarters. They said they weren’t aware of the details of the case. Macachor has also been transferred out of Lapu-Lapu.

Rappler went to the Spotlight Digital office in Barangay Poblacion in the evening of January 28. The office was a stone’s throw away from the Lapu-Lapu City Public Market and was dark and padlocked. 

The guard there said operations had ceased for more than a week. He said about 20 workers had reported to the office, located on the second floor of a building. This was the location of Spotlight Digital’s publishing operations.

Rappler then checked the company’s other location on the main highway in Barangay Pusok, Lapu-Lapu City, also on January 28. The office on the third floor was occupied by about 15 workers, many appearing to be of student age.

Mel, who identified herself as the supervisor, came out of the office and explained that the firm was no longer Spotlight Digital but Creative Reach. She also said they no longer maintained the publishing account.

Mel said they gather leads or information on roofing and solar business owners and enter it into a software app. What happens to the leads is beyond them.

At that time, one worker in a cubicle was viewing an author’s bio on an Amazon page listing.

Mel said Rio Cris Nobleza Sabigan, the owner of Spotlight Digital, had visited their office several days earlier to announce that he had decided to sell the firm.

Mel said Sabigan told them he wanted to protect his mental health and did not want to deal with the stress of being connected to an industry that had become controversial following the arrest of Cebuano BPO executives Michael Cris Traya Sordilla and Bryan Navales Tarosa in the United States for alleged fraud.

The new owner told Rappler over the phone that he intended to legitimize the firm’s operations to help young people who would have lost their jobs if the company shut down. He wanted to set up smaller and off-site BPOs closer to communities.

Sabigan, meanwhile, is back in Mindanao. He said he is no longer involved in any part of the operation.

He told Rappler, however, that theirs was not a scam operation because they fulfilled their promises. He said their padlocked office contained many books they had successfully published for clients.

Sabigan also said the former workers who reported Spotlight Digital to Mayor Chan had been terminated for cause and made up stories to retaliate.

He said their operations weren’t so much a scam but they charged steep prices for services they delivered to authors, such as website creation and social media management.

He told Rappler he felt much better now and that his mental health had improved.

“Send a text before calling. I sometimes can’t answer calls,” he told Rappler. “I’m always playing ML (Mobile Legends).” – Rappler.com

*Some statements were translated into English for brevity.