By Justin Arenstein

Eugene de Kock has warned that a former National Intelligence Agency (NIA) operative, Riaan Stander, might be setting up South Africa's security agencies to take the rap for a series of massive international fraud scams.

The first group of American investors is already threatening to sue the NIA and the South African Secret Service for $14-million (about R94-million) after Stander allegedly cheated them in a complex scam using apartheid-era front companies.

A United States district court has already granted the investors a judgment for $10-million in 1998, but is struggling to get the South African government to agree to either a settlement or arbitration.

Negotiations have taken so long that an additional $3-million interest has been slapped onto the original judgment.

The front companies list De Kock, who is serving two life sentences and an additional 212 years in jail for his role in 50 murders, and other senior officials including Lieutenant Pieter Botha and General Tai Minnaar as directors along with Stander.

De Kock said on Wednesday that he was never involved in either private or official ventures with Stander, and in fact "disliked the man".

"Stander is a liar who sets people up. He never worked for C1 or even visited Vlakplaas. He was never a registered or unregistered source and never gave us anything of value," said De Kock.

However, the investors' high-powered Washington attorney, Joe D'Erasmo, confirmed on Wednesday night that he had sufficient documentary and other evidence to prove that Stander worked for the NIA and other South African agencies at the time of the scam.

D'Erasmo added he was about to institute additional urgent legal proceedings in New York in an attempt to enforce the $14-million judgment against the South African government.

"The government appears to believe that if it delays long enough, the problem will go away. It won't.

"My clients have enforceable judgments from US courts and are serious about getting their money back," said D'Erasmo.

"We believe there may be as much as $100-million still hidden in secret Citibank accounts in New York and Greece."

D'Erasmo said Citibank has refused to comment or release details on the accounts, but junior bank officials have reportedly confirmed they belong to Stander as chief executive officer for Intercol, and his sometime business partner, Roelof van Rooyen Rodine.

Intercol is one of a series of front companies, including Oceantec Syndicate, Cavos Shipping and Eastech Investments, that appear to have been set up by undercover South African police and intelligence units in the early 1990s to generate secret offshore funds for paramilitary operations.

Intercol's letterhead boasts it supplies covert intelligence gathering, trade or labour union investigations, political risk analysis and military security training in addition to electronic surveillance, while signed letters indicate it tried to help Zairean dictator Mobutu Sese Seko stay in power by spying on rebels.

D'Erasmo said three of his clients hired Intercol in 1990 to trace and seize $70-million in commissions they had been cheated out of in Operation Hammer, an unrelated sanctions-busting financial transaction involving letters of credit from large international banks and allegedly underwritten by the CIA and intelligence agencies in Britain and Germany.

Intercol told the group of US and Australian investors that it had traced the stolen commissions to various European bank accounts and would be able to freeze and electronically confiscate the money - for a price.

Stander and Van Rooyen were paid $185 000 in March 1990 and an additional $117 000 in October 1990 by three of the American investors to set up the operation.

Stander claimed in a sworn affidavit days afterwards that Intercol had successfully "taken title" of $100-million and would pay out the investors within 30 days.

The money has never been paid out and both Stander and Van Rooyen simply refused to co-operate until Van Rooyen was detained in Dusseldorf in Germany in February 1995 and cross-questioned by both German police and Lieutenant-Colonel Andre Botha from the South African police.

"Intelligence agencies from a number of western countries appear to have become involved. It's all very murky, but Operation Hammer itself seems to have funded military operations at a time when everyone was worried about communism in Africa," said D'Erasmo. - African Eye News Service