CEBU CITY, Philippines – Cebu has become a major hub for scam operations targeting self-published authors in the United States, several insiders told Rappler in separate interviews. Many founders and workers of these groups previously worked for established self-publishing companies in Cebu before breaking off to start their own.
Unless stopped, a business process outsourcing industry executive warned, this will drag down a sector where foreign clients are already exploring new outsourcing destinations.
Some of those interviewed for this report were either former employees of legitimate self- and vanity-publishing companies in Cebu or involved in scam operations. They requested anonymity, fearing reprisals.
“I can confirm that Cebu is home to large numbers of publishing scams. They all use the same playbook and operate very similarly to Innocentrix/PageTurner,” author Victoria Strauss told Rappler in an email. Strauss is co-founder of the Writer Beware website, which exposes scams and other bad practices in the publishing industry.
Insiders said the publishing scam operations can be found in the Capitol area in Cebu City, Cebu IT Park, Mandaue City, and Lapu-Lapu City. Sources said the biggest operations are in Mandaue City.
‘Pig-butchering scam’
The arrest in December of Innocentrix Philippines president and CEO Michael Cris Traya Sordilla and vice president for operations Bryan Navales Tarosa pried the lid open on an industry that preys on vulnerable authors, who are mostly elderly, with promises of fame and monetary windfall, provided they pay first.
Strauss described the scam operations as “a whole shadow industry in the Philippines.”
The two were arrested in the US along with Gemma Traya Austin, identified as the organizer and listed agent of PageTurner, Press and Media LLC. They are accused of defrauding more than 800 identified authors of a total of US$44 million or more than P2.5 billion. All three are in custody.
According to the complaints, PageTurner and Innocentrix posed as literary agents and movie studio executives pretending to be interested in republishing or adapting works of the authors.
They allegedly contacted the authors via unsolicited phone calls or emails to build trust and then made false promises that a publisher, movie studio, or streaming service was interested in their work. They also allegedly promised huge future payouts when the deals were consummated.
According to the complaints, the agents then extracted money from the authors, claiming that they needed to pay taxes and transaction fees before the contract could move forward. The authors were also asked to pay for various services such as book insurance, publicity, updating of the work, or creating a website, social media campaign, screenplay, or an audiobook.
The complaints said the agents then asked for larger sums of money “to make sure the deal can be completed.” After they allegedly collected the money, the agents then cut off communications and disappeared.
Such a modus operandi is a type of “pig-butchering scam,” a long-term fraud where the victim is asked to pay an increasing amount of money. Strauss said this is the playbook of many of the publishing scam operations in the Philippines.
It is the same playbook Arvin Jay Pasaporte is accused of running with Better Bound House. The Writer Beware website lists in its “Overseas Scams List” several entries for The Pasaporte Group, including Better Bound House, Digital Axis Media, Media Lexus, Paramount Book. and Greendot Films.
The companies are incorporated in the US. Pasaporte’s operations are based in Cebu.
Pasaporte and several co-accused were sued by Tighe Taylor, an author who lives in Los Angeles. According to the lawsuit, Taylor got an unsolicited email from Greendot Films offering to adapt his book into a film or TV show. The email came from Pasaporte’s agents in Cebu.
To proceed, however, Taylor was allegedly told he needed to purchase production services from Better Bound and would need to pay US$9,000 for a screenplay and film synopsis. The author said he paid the amount but alleged that he did not get the screenplay nor synopsis.
Taylor has asked a court in the US for a total of $156,000 (roughly P9 million based on current exchange rates)* in compensatory and punitive damages for all the charges.
Pasaporte told Rappler in an email, however, that this has been settled but did not provide details.
Set-up and betrayed?
One of those sued along with Pasaporte is a Cebuano now based in the US. When Rappler reached out to him, he said he was “in very big trouble” because of Pasaporte, but denied he was involved in the operations. He said Pasaporte told him, “salig lang kuno ko sa Ginoo (I should just trust God).”
In an email to Rappler, Pasaporte confirmed that the person, whom he described as his best friend, was not involved in the operations even if he is listed as president of Better Bound House.
“We set up the business in good faith,” Pasaporte said. “I was betrayed by my partners and other executives. They set me up.”
Pasaporte, who described himself as the sole breadwinner of his family, said he is trying to start all over again.
The websites of all the six companies listed in the Writer Beware as linked to Pasaporte are down.
Flashy displays
It is quite a stumble from the height of his success. Pasaporte’s birthday on May 4, 2023, was covered by SunStar Cebu as part of a paid marketing package that included a website article and social media posting.
The event, “This is Me: The Arvin Jay Pasaporte Birthday Concert,” was held at the posh NUSTAR Resort and Casino. It was listed as the first event of the Better Bound Entertainment (BBE), an events company.
The article that came with the marketing package was published on the SunStar Cebu website as “From Rags to Riches: Arvin Jay’s Journey to Success.”
A former employee of BBE told Rappler that Pasaporte kept his companies separate but that the call center operations had more than 20 employees.
A rags-to-riches story and flashy display of wealth are common among these publishing operators, insiders told Rappler.
Sordilla was known for throwing money at gatherings, whether in the Innocentrix office or during events. Tarosa’s Facebook page has a pinned post about how he built his dream house “not to brag, but to inspire.”
“They love to flex,” one insider told Rappler.
Many of those linked to the operations would post about new cars, houses, and trips abroad, several sources told Rappler. After Sordilla’s arrest, many locked their profiles or scrubbed their posts.
Innocentrix was also known for posting on Facebook about huge commissions — amounting to millions of pesos — for its agents.
Suspicious commissions
The large commissions triggered the suspicion of Mike Cubos, chief executive officer of Performance360 Global Services Incorporated.
“Way back in 2022 and 2023, I really had doubts. How could they give P1 million, P2 million in paid incentives? When I did the calculations, there was definitely something wrong. How could they give P2 million as an incentive commission based on a maximum of 5% of the revenue? These are huge figures,” said Cubos.
A former Innocentrix worker told Rappler they were given very high sales quotas to meet.
“[Workers] overpromise just to be able to sell, but they are just doing a job. They are just trying to meet that ridiculous quota set for them. Everything is a choice: scam your authors or blemish your record with a pending case of liquidated damages because you ‘broke the contract,’” the former Innocentrix worker who requested anonymity told Rappler.
Cubos, who lost some workers to Innocentrix, said they later quit because of the aggressive and cutthroat demands on marketing employees.
‘Bad eggs’
Innocentrix has padlocked its office. Rappler verified this by going to the building in Mandaue City where the company rented space and found it closed. The phone number listed on its website was answered by someone who identified himself as tech support for the company’s pageant vote tabulation system.
When Sordilla and Tarosa were arrested, the Federal Bureau of Investigation asked victims of the PageTurner scam to report to AuthorFraud@fbi.gov. Somebody has reported two of Innocentrix’s top agents and its human resources head to that email, complete with names and photos. Rappler was sent a copy of the email.
Sordilla and many of those involved in the industry started in self-publishing with the Cebu-based operations of Tate Publishing, Xlibris, and Author Solutions.
Rappler asked to talk to people from Author Solutions through an officer with the industry association Cebu IT BPM Organization Foundation Incorporated (CIB.O), where it is a member, but was declined, with the company saying it did not want to comment.
Another insider said there is a trend of freelancers setting up their own operations.
It’s easy to start if the routines are known, one insider told Rappler. Signing up with services such as IngramSpark, a suite of tools for self-publishing, and charging a markup on their services is common.
The line is crossed into scamming when the markup is excessively high, such as 20 times or more, and when promises are made that cannot be delivered.
Buddy Villasis, CIB.O executive director, said such are isolated cases although they have heard of them. He did not see any impact on the Cebu BPO industry.
“Just like POGO, there are bad eggs in the industry,” Villasis told Rappler.
Damaging to the industry
But there are industry leaders who warn that these scam operations could damage the local BPO industry’s reputation.
Cubos emphasized the urgency of cracking down on the scam operations, which impact small and medium BPO companies like the one he runs. He said that when it comes to fraud in publishing, the Philippines ranks first in the world, based on information on the Writer Beware website.
He said the scam operations can damage the reputation of the local BPO industry.
He said companies like Innocentrix operate through numerous shell companies, so if one is blacklisted or added to the Do Not Call (DNC) registry after being reported by an author, the lead is simply recycled by another company or brand.
“We have a lot of small and medium call center shops that are very dependent on outbound campaigns or outbound programs. Because of this fraud case, the US will go strict on regulations in terms of opt-in. They must have opted in, with evidence that they clicked ‘agree,’” Cubos told Rappler.
Cubos is worried about the impact because this is happening at a time when the Philippines is starting to lose jobs not to its traditional competitor India, but to South America and South Africa.
He said the government is focused on job creation but should also take action to address problems involving small and medium BPOs, which are often left out of industry associations. – Rappler.com
*$1 = P58.14
*Some statements in Cebuano were translated into English for brevity.