Two American business associates wanted for gold fraud in South Africa have been arrested - barely 24 hours after they arrived in Johannesburg to clinch another business deal.
Valentino Diaz and Luis Perez, of Virginia in the US, left the country in 2001 after allegedly defrauding SA Royal Manufacturers and Via D'Oro of about R100-million.
The companies manufacture gold products.
Speaking on Tuesday at Melrose Arch in Johannesburg, the scene of the arrest, Scorpions spokesperson Makhosini Nkosi said the national intelligence agency had asked them to investigate the two men.
Business at the mall came to a standstill as onlookers crowded around to witness the high-profile arrest.
With sirens wailing, two black cars bearing the Scorpions' insignia drove into the parking lot next to the offices of Harmony Gold Mine.
Other officers were inside the mall ready to arrest Diaz and Perez, who looked surprised as officials identified themselves.
"Who pressed the charges?" asked Diaz, who said he was not ready to say anything until his lawyer arrived. When he arrived, the lawyer, who identified himself as Trevor Mcglashan, said he did not know what was happening.
Handcuffed together, the two men - wearing dark business suits and ties - were led to the waiting cars.
They were to appear in the Johannesburg magistrate's court on Wednesday on fraud charges.
The Star was told by a source that Perez and Diaz, who had disappeared for three years, had returned to South Africa about three days ago under the impression that they were to strike a deal with Harmony.
The meeting was to take place place at Harmony's offices in Melrose Arch.
Diaz and Perez are directors of Mega Gold, which is believed to have swindled money from South African gold jewellery companies, SA Royal Manufacturers (SARM) and Via D'Oro (VDO), between 1999 and last year.
The Industrial Development Corporation (IDC) owns 40 percent of SARM, while 49 percent of VDO - which manufactures necklaces and bracelets and has a gold lease agreement with Harmony - is owned by the Free State Development Corporation.
Nkosi said VDO, in a bid to expand its business, had approached the IDC for funding. The IDC proposed that Mega Gold do marketing for VDO in North America.
The corporation allegedly insisted that VDO give some of its shares to Mega Gold. VDO suspected that Perez had corrupted some IDC officials, which led them to being defrauded.
"In June 2000 the first batch of jewellery, valued at about $35 000 (about R200 000), was produced by VDO and sent to Mega Gold, which said problems with the shipment would result in a loss of $4 000 (about R25 000).
"Two more shipments followed, and VDO was ultimately conned out of $195 000," Nkosi said.
"VDO was left stranded, owing Harmony R6-million as Perez had disappeared after the third shipment."
When Harmony closed down VDO in February 2001, a total of 475 people lost their jobs.
After VDO was liquidated, SARM received a gold lease agreement from Harmony which provided it with gold on credit.
"SARM's only buyer was Mega Gold, which owes it R4-million for jewellery. SARM owes Harmony Mine R68-million for gold provided," Nkosi said.