Asset Forfeiture Unit attaches R18m and cars linked to 'pyramid scheme'
The Asset Forfeiture Unit has obtained a preservation order to attach bank accounts holding more than R18m for people who allegedly ran a pyramid scheme.
The preservation order also allowed the National Prosecuting Authority unit to attach three luxury vehicles associated with Jade Matsemela and Sipho Martin Mdlhuli, the director and former director of Up Money (Pty) Ltd and Uniitco (Pty) Ltd respectively.
Deputy National Director of Public Prosecutions and head of the Asset Forfeiture Unit Ouma Rabaji-Rasethaba said there will be criminal prosecutions in relation to the Up Money pyramid scheme, which allegedly swindled more than 230,000 investors.
Rabaji-Rasethaba said evidence indicated a number of offences were allegedly committed, including racketeering, money laundering, assisting another to benefit from proceeds of unlawful activities, and the acquisition, possession or use of proceeds of unlawful activities.
She said a criminal case had been registered and criminal investigations were under way.
“The matter will be referred to the National Prosecuting Authority at the appropriate stage for the consideration of a criminal prosecution,” she said.
Rabaji-Rasethaba said the civil forfeiture provisions of the Prevention of Organised Crime Act provided for a two-stage process — the preservation or seizure of assets followed by a forfeiture to the state.
She said the first stage was to secure the assets to ensure there was no dissipation.
The attached vehicles — an Audi TT, Hummer H3 and a Jaguar XKR Coupe — were purchased directly with funds from the Uniitco (Pty) Ltd bank account.
The application by the AFU was part of the interventions by the National Consumer Commission and the Financial Intelligence Centre to assist more than 228,900 investors who were allegedly defrauded.
NPA spokesperson Sipho Ngwema said the Up Money pyramid scheme, which is neither registered with the Reserve Bank, a registered stokvel, nor a financial services provider, used mainly social media to recruit members.
He said new participants were required to pay a one-off joining fee of R180.
This qualified them for a meat pack. New members were then required to recruit five other new participants.
The original investor would then help the five he or she recruited to each sign up five new members. This was termed level one.
This would then ensure that the original recruiter moved to level two, whose benefits were a meat pack, groceries and R500.
When those on level one were moved up to level two through their recruits, the original organiser was pushed to level three.
This would entitle the investor to receive level two benefits plus R3,000.
The NPA said though the scheme had received R42.7m between May 4 and July 2 this year, more than R12.5m was spent at various retail stores and on the vehicles.
The NCC was alerted to the pyramid scheme by a complainant from East London.
The commission’s investigation revealed that Up Money contravened the Consumer Protection Act by promoting and causing members of the public to join and participate in a pyramid scheme.
After requests from the commission, the Financial Intelligence Centre traced how the funds were allegedly laundered through various methods, accounts and transactions.