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Ponzi scheme: court steps in

Jun 17 2009 15:42

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Johannesburg - Trustees have been appointed for South African assets seized from alleged Ponzi scheme fraudster Barry Tannenbaum.

Johannesburg attorney Ian Levitt, who is acting for one of the scheme's investors, said on Wednesday the master of the South Gauteng High Court had appointed the trustees.

Levitt said one of the trustees that he had put forward - Johannesburg-based Shirish Kalian Attorneys - had been appointed.

The other trustee was KPMG International's Gavin Gainsford.

"Because a Ponzi scheme is illegal - all those people who got paid anything have to give it back now," Levitt said.

He added that the trustees would meet on Wednesday afternoon to plan a way forward.

Last week Tannenbaum, who now resides in Australia, was unveiled as the alleged fraudster behind a Ponzi scheme involving as much as R15bn.

Tannenbaum has denied the allegations.

According to an investigation, he allegedly convinced investors to put money into the import of pharmaceutical drugs, confirming that he had contracts with large pharmaceutical manufacturers including Aspen Pharmacare.

On Friday, Aspen issued a statement saying correspondence between itself and Barry Tannenbaum's Frankel International and Frankel Chemicals Corp was fraudulent.

- Sapa

 
 
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