By Christina Gallagher
The SA Reserve Bank has launched an investigation into the business practises of Millennium Leisure International, a company allegedly operating a pyramid scheme, said a police source close to the probe.
In addition, police have begun investigating a charge of money-laundering against MLI, and Absa Bank has frozen MLI's account pending criminal investigations.
Earlier this week police searched premises believed to be linked to MLI throughout Gauteng.
Documents were seized, the source revealed. Several sources confirmed the Reserve Bank investigation including the fraud examiner hired by MLI to confirm whether or not the company was complying with SA law regarding illegal pyramid schemes and money-laundering.
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"The investigators received instruction from the Reserve Bank after receiving complaints that the institution (MLI) had been taking deposits illegally. The institution (MLI) is not registered with the financial services board and should be if it is taking deposits," said the police source.
Members of MLI deposited their R11 394 membership fees into an Absa account registered in Cape Town. Media spokesperson for Absa, Errol Smith said: "Absa suspended the account while the company is under investigation by the authorities and forensic services."
A case docket has been opened with the SAPS against MLI for money-laundering.
MLI was unable to respond to the questions faxed to them late on Friday. Lawyer Andre Nel agreed to respond on Monday, saying there was "nothing to hide".
The investigation comes weeks after Weekend Argus broke the story about MLI and its connection to similar benefits package clubs OMI and VIP operated by Leisure Marketing International in the UK, that offered high pay-outs to members who recruited others.
Those clubs have been served with an injunction for operating an illegal lottery in the UK.
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This article was originally published on page 2 of Cape Argus on July 15, 2006
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