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Sarb raids ‘Ponzi schemes’

Last week the SA Reserve Bank (Sarb) obtained and executed a search warrant to raid the premises of 23 affiliated companies, including FinGroup, MiBiz, AllQuotes and Buydirect.

This follows a series of investigative articles by City Press raising concerns about the companies after investors failed to be paid promised returns.

The private residences of Kevin Cholwich, Robert Weimar and Theunis Schoeman were also raided by Sarb.

Allegations by investors and insiders that the companies were running a Ponzi scheme have now also been included in a court application by 38 investors to have the businesses liquidated.

The action by investors is being led by Steenkamp Attorneys, which last year successfully brought a class action against Ponzi scheme Agri Smart, where investors were defrauded of R120 million.

Investors in the companies had been promised passive income as high as 30% per year – a red flag for illegal Ponzi-type deposit-taking schemes.

However, investors – referred to as “licence holders” by the companies – have not received income for more than a year.

Insiders told City Press that they believed that money from new licence holders was used to pay existing licence holders a passive income.

The businesses were supposedly engaged in a variety of e-commerce ventures.

This was meant to get them to buy yet more licences in new business ventures.

Court papers claim that the individuals continued to open new companies to keep the money rolling over and attract new investors.

Based on the Sarb warrant application and court case, it would appear that FinGroup, MiBiz, AllQuotes and Buydirect are just the tip of the iceberg with a total of 23 entities being investigated, all linked to the three individuals.

The so-called licences in these businesses were sold for up to R50 000 each.

Insiders estimate that the amount collected by these companies from licence holders and investors to be as high as R150 million.

The Sarb search warrant was issued on the basis that the companies and individuals were believed to be conducting the business of a bank without being registered to do so.

This is the legal basis on which Sarb is able to act against illegal deposit-taking schemes.

The investors’ case will appear before the court on November 8. In the 61-page court application and 274 pages of supporting documents, Steenkamp Attorneys claims that “there does not appear to be a true or viable and lawful underlying business generating the income promised to investors”.

A Sarb spokesperson told City Press that they are unable to comment on the investigation at this stage.

The group of companies and individuals, all represented by SC Vercueil Attorneys, have until Monday to challenge the court application.

When contacted by City Press for comment from his clients, attorney Faan Verceuil said: “I am an attorney, I can’t give any comments, I am not a press officer.”

The companies listed in the court application all use SC Vercueil Attorneys’ physical address as their registered address.

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