Cape Town 09-10-12 -Arthur Brown at the High Court Picture Brenton Geach

Cape Town - Former Fidentia boss J Arthur Brown transferred money to a firm for two beachside properties in Cape Town, the Western Cape High Court heard on Thursday.

Brown is on trial for allegedly running a pyramid scheme and using investors' funds for his personal gain.

Attorney Miltiadis Koumbatis told the court he handled the property sales in 2002 on behalf of Milton's Incorporated, a law firm.

“I ran these two transactions, I conducted the files on a daily basis,” he said of the properties in Sunset Beach, an upmarket neighbourhood with views of Table Mountain.

Koumbatis said trusts were created in the name of the properties' erf numbers.

“If the property is owned by a trust, you sell the trust per se. It's a questionable practice, but was a very popular practice to avoid, let's say, rather than evade, transfer tax.”

The properties were transferred over to Brown's two trusts, the JAW Brown Family Trust and the SL Brown Family Trust when the sale was concluded.

Their total selling price was more than R11 million.

Prosecutor Jannie Van Vuuren led the attorney through Milton Inc's bank statements at the time, noting a part payment for the properties on December 13, 2002.

The money was transferred from Maddock Inc, the account of former Fidentia accountant Graham Maddock, who apparently acted on Brown's instructions.

Koumbatis said he never met Maddock, but knew him as a representative for the Brown family.

The State alleges that the properties were bought with stolen funds from the Transport and Education Training Authority (Teta).

Brown allegedly assured Teta that promissory notes to the value of R100.3 million would be kept in safekeeping by Maddock Inc and would be secured.

The properties in Milnerton were bought soon after the first promissory note was cashed.

Brown previously admitted that a total of R11.23 million was transferred from one Maddock Inc trust account to another Maddock Inc trust account in June 2003, on the same day that R11.23 million was paid to Milton's Attorneys. - Sapa