BAD NEWS awaits investors, who were lucky enough to earn lucrative interests from red-flagged Ponzi scheme Coinit Trading, as authorities will turn to them to recover part of billions of rand of investments, in order to refund those who lost all their hard-earned cash.
Most unsuspecting investors did not only invest their pensions and life savings, but also went overboard by taking bank loans – worth hundreds of thousands of rand – to try their luck with Coinit. They are now blaming the Directorate for Priority Crime Investigation (Hawks) and FSCA for meddling with the ponzi scheme, which had promised them financial freedom.
Some investors had, for some years, enjoyed monthly earnings until a few years ago – when authorities raised a red flag. However, their luck seems to have run out as authorities set their sights on them to recover the interest they earned, in order to refund those who, unfortunately, lost all their investments, as it is unlikely that the money would be recovered from Coinit.
Some victims, who invested hundreds of thousands of rand, want law enforcement agents to keep their hands off the controversial Coinit, that is alleged to have collected R4 billion from them.
Coinit’s case is among nine others that the Financial Sector Conduct Authority (FSCA) had, over the past three years, referred to the National Consumer Commissioner and the SAPS for a thorough investigation.
Coinit was operated by Malcolm de Beer and his family. Some of the investors joined the scheme, believing that Malcolm had family ties with the giant De Beers Mining group.
The investors are now divided on whether Coinit should be allowed to continue operating or be liquidated. However, FSCA’s head of investigation Gerhard van Deventer said Coinit could never be allowed to continue operating, since there is evidence of illegality.
“Among other things, new investors’ funds were used to pay existing investors, and there was no other income detected in the bank accounts other than the actual deposits of the investors,” said Van Deventer.
Although it has been reported that, since its inception, Coinit had collected about R4bn, the FSCA has uncovered that R729 000 000 was deposited into the scheme’s accounts, between February 2019 and August 2019.
According to Coinit’s website, an investment of between R1 000 and R50 000 had a monthly return of 3% interest, while those who wanted a high return were required to invest R51 000 or more – for an annual return of between 10% and 15% interest. However, when they were recruited, investors were promised much bigger and lucrative returns.
Attempts to contact Coinit drew a blank. Victims requested to remain anonymous, apparently due to the embarrassment caused by their loss.
One investor believed that De Beers had the interests of the investors at heart, but there were certain people who, without his knowledge, acted as Coinit agents and collected money from investors – only to enrich themselves.
“We are divided. There are those who think that if the company is liquidated, we would recover our investments. But there are also many, like myself, who believe that we can only recover our investments if the company is allowed to continue,” said another investor.
Despite warnings, Zanele Myeni was, in 2019, actively recruiting people to continue investing their money with Coinit, but she now wants nothing to do with the company and hopes that its liquidation would help her to recover her R150 000, without the promised return.
“I am with those who are calling for Coinit to be liquidated,” said Myeni,
An estimated 20 000 investors, including health-care workers, prison warders, police officers, and taxi operators, lost almost all their money to Coinit. Recently, the Asset Forfeiture Unit (AFU) seized De Beers’ properties, a plane, helicopter, and flashy cars – all worth about R106 million.
There are several ponzi schemes that have been exposed around the country over the years. In 2006, Mynderd Hendrikz, and spouses Anton and Debra de Bruyn, were nabbed for running Springbok Haulage and Logistics, which had a modus operandi similar to Coinit.
Also, David Wilmot was sentenced to a 15-year jail term, two years ago, for running Nava Shore Holdings, which robbed investors of more than R23 million since 2013.
| Investigations Unit