SA investment fraud guilty plea

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IOL gavel_2 mar 28

sxc.hu

Durban - Former tax lawyer, Canadian Brian Ray Dinning, has pleaded guilty to duping wealthy Americans into investing in South African projects, including a luxury hotel on the Wild Coast, gold and diamond mining operations and charitable work for local tribes.

But all the while Dinning, 48, used the “invested” money - more than $2.9 million (about R29m) - to pay child support, credit card bills, and his brother Stephen’s salary while he lived in South Africa and took potential investors on safari.

Last Monday Dinning, a self-proclaimed “social venturer”, pleaded guilty to wire fraud and bank fraud and is expected to be sentenced in October by a US court in Virginia.

The maximum penalty for wire fraud is 20 years’ imprisonment and a fine of $250 000, as well as full restitution, a special assessment, and three years of supervised release.

The maximum penalty for bank fraud is 30 years’ imprisonment and a fine of $1m, as well as full restitution, a special assessment and five years of supervised release.

While investigating the fraud, US prosecutors found a video filmed in the Kruger National Park that shows Dinning terrorising young elephants with his vehicle and yelling “South Africa sucks”.

According to court papers, Dinning owned and operated, or was associated with, hundreds of corporations such as Africa Conservancy, Lions Walk Lodge, and Wild Coast Explorer Club.

From about May 2005, Dinning had devised a scheme to fraudulently get money from potential investors by promoting various investment opportunities in SA, by making false verbal and written presentations and presenting fraudulent documents misrepresenting financial gain for investors.

He then used the fraudulently obtained money for personal and family gain, to pay his personal expenses and repay disgruntled investors.

Dinning sought out and recruited wealthy investors and their acquaintances and colleagues to invest in numerous “for profit” corporations he established. He also encouraged the investors to make charitable donations to the several “not for profit” corporations he established by falsely assuring them the money was to carry out charitable, environmental, agricultural, medical and community projects.

Dinning told investors they would also receive a monetary return on their charitable contributions and assured them he would not use any investor money for himself.

The Canadian had deposited investors’ contributions into bank accounts he controlled and withdrew most of the money, some of which he used as a down payment and mortgage payments for a new $975 000 home, as well as for luxury vehicles.

Part of the scheme was for his brother to move to SA as a project manager for Hole in the Wall, a development project consisting of 51 ocean-front homes in a gated estate on the Wild Coast, and the Coffee Bay Farming Project.

Stephen was also a guide for investors wanting to oversee their investments.

Some of Stephen Dinning’s expenses were paid from an investor who was promised that a church or community centre would be built in Coffee Bay in memory of his dead daughter.

Dinning obtained approximately $2.9 million from investors’ contributions.

He also had a blog and in March last year wrote that, like actor George Clooney, he had dedicated his life to those in need in Africa.

“My belief comes from my dedication to the service of God and to my beliefs from the Bible which tells us to care for the orphans, the widows and the needy,” he wrote.

“So, like George Clooney, I, Brian Ray Dinning, will work to help as many people in need in Africa as I can - even if this means the loss of reputation, the loss of liberty or imprisonment by an injust system or people, or the loss of my life.

“Because some things are more than a belief.”

noelene.barbeau@inl.co.za

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