Thousands of gullible investors may have become very poor in a get-rich investment scheme that operates from Highlands North in Johannesburg.
Thousands of gullible investors may have become very poor in a get-rich investment scheme that operates from Highlands North in Johannesburg.
Consumers were told that Young Stars Investments is not a pyramid or fly-by-night scheme and were guaranteed to get rich quickly.
In March 2007, Petrus Mabyana, 43, of Polokwane, withdrew R70000 from his pension fund and invested it.
Young Stars Investments told Mabyana that the company imported goods from abroad and sold them locally for a big profit. He was told that his R70000 would rake in a profit of R80000 over 12 months.
Mabyana was told that the company would buy goods for R60000 and sell them on his behalf. He was told the balance of the money would be used to transport the goods.
He was also told he would get R25000 in six instalments over a year.
But he became suspicious when he was told to recruit members.
"I told the agent I valued my friends and I did not want them fleeced through me in a pyramid scheme," said Mabyana.
He was again assured that the company was registered and had been enriching people since 1994.
"I was relieved when they paid R25000 into my account," Mabyana said.
"I had a choice not to invest, but was swept off my feet when people showed me proof of payment."
When months passed and he received no further payments, he enquired and was told that the Scorpions were investigating the company.
"Then the company demanded R23000 if I wanted my R70000 back," said Mabyana.
Solly Sethekga, who owns Young Stars Investments, did not respond to our enquiries and was not available at the time he had agreed for an interview.
His right-hand man Mike Mfuthwana said they had instructed their lawyers to comment. But he did not know the names of the attorneys.
Consumer Line discovered that the company is not registered and used a CK number of an import and export company which operates from Pretoria.
A source said that Mabyana was not the only disappointed investor.
"Marriages and friendships have been threatened," said the source.
The source also said that the company had sold its electrical appliances to another company which undertook to repay for the goods over a year.
Mfuthwana did not want to comment on the allegations and gave Consumer Line the telephone number of the company's director, Daisy Mogale. Telkom's faults department told us that that number had been discontinued early last month.
Pyramid schemes come in many disguises. Most partici- pants never make money, but lose their own money instead.
What to look out for:
l If there is financial rewards for recruiting people, then you are possibly dealing with an illegal pyramid scheme;
l If you are required to buy large quantities of goods;
l If you are offered goods or services of little or doubtful value.
Get-rich scheme that will make you poor
Thousands of gullible investors may have become very poor in a get-rich investment scheme that operates from Highlands North in Johannesburg.
Thousands of gullible investors may have become very poor in a get-rich investment scheme that operates from Highlands North in Johannesburg.
Consumers were told that Young Stars Investments is not a pyramid or fly-by-night scheme and were guaranteed to get rich quickly.
In March 2007, Petrus Mabyana, 43, of Polokwane, withdrew R70000 from his pension fund and invested it.
Young Stars Investments told Mabyana that the company imported goods from abroad and sold them locally for a big profit. He was told that his R70000 would rake in a profit of R80000 over 12 months.
Mabyana was told that the company would buy goods for R60000 and sell them on his behalf. He was told the balance of the money would be used to transport the goods.
He was also told he would get R25000 in six instalments over a year.
But he became suspicious when he was told to recruit members.
"I told the agent I valued my friends and I did not want them fleeced through me in a pyramid scheme," said Mabyana.
He was again assured that the company was registered and had been enriching people since 1994.
"I was relieved when they paid R25000 into my account," Mabyana said.
"I had a choice not to invest, but was swept off my feet when people showed me proof of payment."
When months passed and he received no further payments, he enquired and was told that the Scorpions were investigating the company.
"Then the company demanded R23000 if I wanted my R70000 back," said Mabyana.
Solly Sethekga, who owns Young Stars Investments, did not respond to our enquiries and was not available at the time he had agreed for an interview.
His right-hand man Mike Mfuthwana said they had instructed their lawyers to comment. But he did not know the names of the attorneys.
Consumer Line discovered that the company is not registered and used a CK number of an import and export company which operates from Pretoria.
A source said that Mabyana was not the only disappointed investor.
"Marriages and friendships have been threatened," said the source.
The source also said that the company had sold its electrical appliances to another company which undertook to repay for the goods over a year.
Mfuthwana did not want to comment on the allegations and gave Consumer Line the telephone number of the company's director, Daisy Mogale. Telkom's faults department told us that that number had been discontinued early last month.
Pyramid schemes come in many disguises. Most partici- pants never make money, but lose their own money instead.
What to look out for:
l If there is financial rewards for recruiting people, then you are possibly dealing with an illegal pyramid scheme;
l If you are required to buy large quantities of goods;
l If you are offered goods or services of little or doubtful value.
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