The police have conducted search-and-seizure raids on the suspected masterminds minds behind an alleged pyramid scheme operating out of the Western Cape.
‘Enormous’ Ponzi scare
Last Thursday, police raided two Cape Town premises linked to World Focus, a close corporation run by husband-and-wife team Jasmin and Maksuud Ebrahim — one business and one residential property.
The raids form part of a criminal investigation into the company, which is alleged to have been a pyramid scheme that attracted more than 400 investors.
Sources close to the case believe that the scheme has drawn in more than R250-million in investments, but estimated that this figure could be substantially more.
Earlier this month, the company was placed under provisional liquidation in the Western Cape High Court.
Around 88 aggrieved investors, led by businesswoman Zireena Osman, brought the matter into the open.
The police, however, said that at present it appears R50-million is involved. “Though this figure might change substantially,” said South African Police Service spokesperson Colonel Billy Jones in an emailed response to questions from the Mail & Guardian.
“The investigative process is at this stage still ongoing and no warrants of arrests have been applied for thus far,” he said. “We are currently in the process of establishing how many investors participated; we can confirm that there were numerous agents who were involved in the scam.”
Left in dire straits
Last week the M&G reported on how World Focus purported to offer investors trucking contracts whereby they invested R150 000 to lease a truck contracted to carry commodities such as coal.
The investors were then promised monthly returns of amounts ranging between R12 000 and R15 000 for a period of three years, or returns of more than 280% over the contract period. Other investors, it is believed, were promised returns of more than 700% in some cases.
The company also offered investors other opportunities, including investing in a property fund, with the property allegedly located in Brazil, and investments in a water-purification project in Central Africa, as well as a citrus-growing venture and olive-growing scheme.
The core of investors appears to have come from the Cape, but it is believed to have operated in Gauteng and KwaZulu Natal as well.
Many investors are believed to have cashed in retirement policies, pensions or took out loans to get involved, and have been left in dire straits.
The criminal investigation may have a negative affect on the separate civil case, according to Peter Whelan, an attorney at Bowman Gilfillan who represented the complainants in court.
Following the confiscation of the company’s records by the authorities, Whelan said the liquidators will have difficulties in carrying out their own investigations.
“Now we have no access to the records of the close corporation,” he told the M&G.
One of the liquidators appointed to the matter, Chris Van Zyl, said that this will “hinder our work”.
“Ours is a civil process and we are trying to recover assets to pay back investors,” said Van Zyl.
“You must understand that the [Directorate of Priority Crimes and Criminal Investigations] has been acting on criminal cases that were registered. We are duty-bound to investigate it as it falls within our mandate, but these processes are two separate issues,” said Jones.
Whelan was hopeful, however, that the police would be willing to work with the liquidators during their investigations, and advised that a meeting had been scheduled with the police on Wednesday.