By Justin Arenstein
The Israeli mastermind behind Mpumalanga's R1,3-billion promissory note scandal was arrested by a joint FBI-Interpol task force at his Las Vegas hideout in Nevada, United States, this week after a two-year manhunt.
Moshe Regenstreich, who has claimed to be everything from an Israeli war hero to an international spy, will be extradited to Switzerland for trial after allegedly fleecing European businessmen of $10-million (about R720-million) in a series of illicit diamond deals.
Regenstreich left Switzerland as "Moshe Regev" on Israeli passport number 5366439 in March 1995, but entered South Africa as Regenstreich on Israeli passport number 6650678 late in 1997 and eventually left on Lesotho passport number N006588 in August 1998.
After he had been linked to the illegal trade in chemical weapons, including deadly mustard and sarin nerve gas, he was blacklisted by the United States congress and the state department in 1995 when his import-export company, Mainway, was linked to the sale of equipment, material, know-how and technology to Iran for the manufacture of chemical weapons.
Swiss courts eventually placed a cash bounty on his head and issued an international warrant in January 1998.
But Regenstreich had entered South Africa, where he cut deals with National Intelligence Agency (NIA) operatives, Mpumalanga's provincial government and even the justice department.
He was also able to flee to New York at the height of the promissory note scandal in August 1998, after helping Alan Gray, the former Mpumalanga parks board chief, to secretly use 19 game parks as collateral for a series of illegal offshore loans.
Faizel Abdul-Kader, South Africa's Interpol director, confirmed that Regenstreich had been on his international wanted list since early 1998, but said Interpol was not informed that he had entered South Africa.
Regenstreich set up a financial brokerage, Fenetic Investments, in Sandton shortly after arriving in the country and rapidly bought a number of other shady foreign exchange brokerages.
He hired two NIA operatives, Ian Langworthy and Pieter Louw, and according to their official reports used the companies as a front for money laundering and dealing in stolen share certificates.
Regenstreich also used Fenetic to set up the R1,3-billion promissory note deal with Gray in 1998, promising massive offshore loans of up to R500-million each in return for a contract granting 19 game parks to Fenetic as "unequivocal" collateral.
On a roll, Regenstreich set up a $115-million 12-ton gold deal and signed an offer to purchase one of Marino Chiavelli's former 30-room palaces in Hyde Park for $2,4-million. Media exposes of the illegal promissory note deal shattered his affluent lifestyle, however, leading to his eviction from the mansion, his arrest with Langworthy and Louw in a stolen share certificate scam, Reserve Bank raids on his Fenetic offices and a flurry of law suits.
Regenstriech and Gregory Mbokomo, his Zambian financial director, were initially charged along with the NIA operatives after they were caught trying to convince Johannesburg-based BFS Capital to accept share certificates worth $14,3-million as surety in return for a $1,5-million loan.
All charges were dropped in January, however, after the state said Regenstreich had co-operated and that the police had been unable to prove that he or Mbokomo were aware that the certificates were stolen.
Langworthy insisted in NIA reports at the time of his arrest that Regenstreich was the key to the criminal underworld and had used Fenetic to illegally channel crime-syndicate money out of the country.
The Reserve Bank eventually closed down Fenetic after confirming that it was engaging in international currency speculation without a forex licence. It declined to prosecute, despite being briefed on Regenstreich's role in the promissory note scam, the stolen share certificates and concerns by the International Banks of Southern Africa that he was the front for an Israeli crime syndicate that had cost local commercial banks millions.
Regenstreich fled to the US, apparently using a Lesotho passport.
Langworthy and Louw are meanwhile threatening to implicate their NIA handlers, as well as Bushie Engelbrecht, the head of crime intelligence when the share certificate scam goes to trial next month.
Langworthy reported directly to Thabo Kubu, the head of the NIA's shadowy strategic projects unit, and tried to intimidate police into dropping charges by organising meetings between Kubu and investigating officers.
The scheme backfired when Kubu eventually made a sworn statement to police insisting Langworthy had "gone overboard".
Kubu was suspended from the NIA on unrelated charges shortly after the arrests and his unit dismantled following allegations of massive fraud, misuse of state resources and death threats against NIA operatives who complained about the unit's conduct. - African Eye News Service