Before turning the gun on herself and committing suicide last week, Aneesa Arrison, a 43-year-old mother of four, shot dead her eldest son, Waseem, and shot and injured her teenage twins. Arrison had invested in 4th Power Investments, a suspected Ponzi scheme.
Before turning the gun on herself and committing suicide last week, Aneesa Arrison, a 43-year-old mother of four, shot dead her eldest son, Waseem, and shot and injured her teenage twins. Arrison had invested in 4th Power Investments, a suspected Ponzi scheme.
Pastor David Cupido, the director of 4th Power Investments, is being investigated by the Hawks.
Pastor David Cupido, the director of 4th Power Investments, is being investigated by the Hawks.

A Cape Town mother of four who committed suicide last week had invested R1 million of her late husband’s pension in a suspected Ponzi scheme. The scheme, 4th Power Investment, stopped paying investors in September last year, and the woman, Aneesa Arrison, was being investigated by the Hawks, according to a relative.

Pastor David Cupido, the director of 4th Power Investments, is being investigated by the Hawks. 

The director of 4th Power Investments, pastor David Cupido of Touws River in the Western Cape, is being investigated by the Hawks on charges of fraud, theft, money laundering and contravening sections of the Financial Advisory and Intermediary Services (FAIS) Act and the Banks Act.

It is not known how much Cupido collected from investors, but he reportedly owned a fleet of luxury vehicles.

This week, another pastor suspected of operating a Ponzi scheme appeared in the Bellville magistrate’s court. Colin Davids, of the New Direction Church in Parow, faces charges of fraud and contravening the FAIS Act and Banks Act.

Davids is believed to have taken deposits of about R330 million.

Both Cupido and Davids claimed they were currency traders, as does Refiloe Wayne Nkele, or “Ref Wayne”, as he is known. Nkele is the creator of Pipcoin, which he alleges is South Africa’s first cryptocurrency. Nkele launched the Pipcoin scheme early last year on the back of promises of a 35-percent monthly return. The scheme is believed to have taken deposits of about R200 million.

Nkele, who claims to be a self-made billionaire, has a strong presence on Facebook. He has received extensive media courage, including interviews on, SABC and numerous radio stations.

According to the 22-year-old’s LinkedIn profile, he is a “forex specialist, author and philanthropist” who studied at “DIY University”. On, he describes himself as “a blue-chip pedigree, best of the best, senior executive with highly transferable cross-industry skills in artificial intelligence, quantum physics and psychology”.

After the launch of Pipcoin, financial journalists and industry experts started poking holes in the scheme, claiming there was no such cryptocurrency. Since then, a cryptocurrency called Pipcoin appears to have been created, but it is unclear who actually owns the Pipcoins.

Not a cent

Needless to say, many of Pipcoin’s so-called investors have yet to receive a cent. One of them, Queen Nduwe of Pretoria, invested R4 500 early last year. She told Personal Finance this week that she had lodged a complaint with the Hawks. She had met someone who had invested her pension savings of R100 000 in Pipcoins.

Nduwe is a member of a Facebook group of 4 200 people, many of whom say they have been scammed.

At the end of last year, Pipcoin investors received an email from the owner of, a privately owned exchange company, stating that Pipcoin was a Ponzi scheme and that investors had been sold a fake cryptocurrency, which DC-EX had refused to list it on its platform.

The writer of the email claimed to have subsequently created a real cryptocurrency – PIP – and listed it on to give Pipcoin investors a chance to recover their losses. But to claim their free coins, investors had to register with DC-EX before December 30. Thereafter, they would be able to trade on, the email said.

DC-EX enables users to buy and sell Pipcoin for Bitcoin (BTC). They then need to move their BTC to an exchange where they can be exchanged for rands at the market rate.

In a letter to investors, Nkele rejected DC-EX’s claims to ownership and said there were no free coins up for grabs. “There are no free coins. Out of seven million total coins, 1.4 million have taken away from me, which is my share as the owner of the currency, and the remainder belongs to you, the participants of the stokvel,” he said. It was no secret that “Pipcoin started off as a stokvel and a crowdfunding method”, he said, suggesting that there was initially no actual cryptocurrency.

Scam warning

Shane Maguire, a Bitcoin enthusiast and contributor to, wrote an exposé of Pipcoin in August last year, warning consumers that it was a scam.

Maguire says that since then an actual Pipcoin has been created and is trading at R5.71 a piece. Most investors purchased theirs for R150 each.

“Coinmarketcap shows there are about 6.5 million PIP in circulation at R5.71 each. However, there is no liquidity in it. Yesterday morning, there were only four BTC in buy orders on DC-EX, meaning that if you were to sell R50 000 in Pipcoin, it would be worth nil.

“Pipcoin was 100 percent pre-mined, meaning there is no mining and the founders could have created as many Pipcoin as they wanted for themselves. They are not transparent about how the coins were distributed,” Maguire says.

Pipcoin is forked, which means copied, from Novacoin’s code. Pipcoin’s blockchain explorer (which shows trading in the cryptocurrency) doesn’t work, making it impossible for anyone to view the public ledger or “mine” the coins. It was created with a cap of 6.5 million coins and there are already 6.5 million in existence, so no more can be mined, he says.

“I would avoid it at all costs. If Pipcoin does increase in value, the founders who potentially hold most of the coins, could exit by dumping all coins on the market, leaving the holders with worthless coins.”

Gill Raine, a senior policy adviser at the Association for Savings & Investment South Africa, says people who manage investments in currencies, including digital currencies, on behalf of clients need to be approved as asset managers by the Financial Services Board and comply with the FAIS Act.

Pipcoin was reported to the South African Reserve Bank (SARB) last year, according to sources. Jabulani Sikhakhane, the head of communications at SARB, this week would not confirm whether the SARB was investigating Pipcoin.

The Hawks did not respond to questions from Personal Finance. This week, Personal Finance was not able to reach Nkele on Pipcoin’s listed landline number or his cellphone.


In hard times such as these, you may be more prone to falling for a scam posing as an investment. Pyramid schemes and Ponzi schemes, which are the most common and dangerous scams, have certain characteristics. Be on the lookout for one or more of the following tell-tale features.

1. Unrealistic returns. Any scheme that offers an annual return of 20 percent or more above the repo rate (currently seven percent) is, in essence, a Ponzi scheme, according to the Consumer Protection Act. 

Schemes such as MMM and Pipcoin have offered outrageous returns of 30 percent and 35 percent a month respectively.

In contrast to legitimate investment schemes, Ponzi and pyramid schemes offer unrealistically high returns, without mentioning the risks involved, and can pay so-called profits only while “investors” continue to pump money into the scheme, Iain Orpen, the head of forensic services at Capitec, says. In other words, they can’t pay investors out of real profits, because there is no underlying investment. Ponzi and pyramid schemes can survive only if more people continue to join them: they rely on recruiting Peter to pay Paul. When the scheme’s growth stops or slides, it is doomed to fail.

Not only should you understand what a realistic return is, you should also know how the returns are generated – in other words, what is the underlying investment and the level of risk associated with the asset class (equities, bonds, cash, foreign currencies) to which it belongs. It is vital that you ask yourself whether you can afford the level of risk, particularly if you are investing your life savings or your retirement savings.

Make sure you understand how an investment scheme works. Pyramid and Ponzi schemes are often deliberately complex and murky, so that they can dupe and steal the money of ordinary, hardworking people, Orpen says.

2. Unregistered entities. The scheme and the operators of the scheme are usually not registered with the authorities, such as the Financial Services Board or Stokvel Association, Orpen says. It is also not uncommon to find negative articles about dubious schemes on the internet, and it’s worth doing a Google search on any offering. “A trustworthy investment scheme will have a good reputation in the financial media,” Orpen says.

3. Unorthodox marketing methods. Schemes such as MMM and Pipcoin have relied heavily on social networking, including social media platforms such as Facebook, as well as structures such as churches and community forums, to lure their victims. A legitimate investment scheme may have a presence on social media, but it will not sell directly to the public by presenting its offering in a community forum or from the pulpit. It will market itself in the mainstream media and will have a physical presence, including fixed-line phones and proper office premises.


Iain Orpen, the head of forensic services at Capitec, spells out the differences between a pyramid scheme, a Ponzi scheme and a stokvel.

Pyramid schemes recruit sales people, who sometimes have to pay a fee for the “privilege” of selling a product, and become the scheme’s army of evangelists to spread the word about the purported benefits of joining the scheme. The product is almost always an after-thought. The “profit” is actually generated and shared by the members.

Second, the scheme’s promoters promise significantly higher returns than any bank could. The promised rate, which may be weekly or monthly, could be as high as 50 percent. However, any rate greater than about 10 percent a year is unrealistic. If the promised returns are in double digits, you are entering “pyramid country”, Orpen warns.

Third, pyramid-scheme evangelists almost never mention risk, or may even claim that the “investment” is risk-free. There is no such thing as a risk-free investment. Always remember that if it sounds too good to be true, it probably is. 

Ponzi schemes are similar to pyramid schemes, but a key difference is that the mastermind of a Ponzi scheme gathers the funds from new “investors” and then distributes them, usually paying the initial investors handsome “returns” to convince others that the scheme is a success. The person at the top of the scheme has access to all the money. Ponzi scammers often run off with the funds once the scheme starts to collapse.

Stokvels are savings clubs. In a stokvel, the participants know each other personally and share a common goal to save money every month. No one gets rich quickly. Stokvels are regulated. In terms of the Banks Act, they are required to belong to either the National Association of Stokvels, a self-regulatory organisation that has been approved by the Registrar of Banks, or a similar body approved by the South African Reserve Bank.