An unscrupulous and predatory pyramid scheme that supposedly raked in more than R42 million from desperate people has been foiled by authorities following an alleged two-month looting and shopping spree.
Advocate Ouma Rabaji, the head of the Asset Forfeiture Unit (AFU) and the National Prosecuting Authority’s (NPA) deputy national director of public prosecutions, enthused on Tuesday at how law enforcement had worked together to “rescue 230000 people who were being swindled” by the Up Money Ponzi scheme.
The alleged fraudulent entity, which the NPA said was neither registered with the SA Reserve Bank, a registered stokvel, nor a financial services provider, operated in Tembisa in Ekurhuleni.
The Star has seen orders from the South Gauteng High Court, signed by Judge Brian Spilg, freezing R18.3m still left in Up Money’s FNB Gold Business account, as well as attaching three luxury vehicles; namely an Audi TT, a Hummer H3 and a Jaguar XKR, which were allegedly bought with the proceeds of crime.
The NPA said these vehicles were part of a mega R12.5m shopping spree after Up Money had allegedly conned R42.7m in just two months this year, between May 4 and July 2, as the two directors wasted no time in blowing their “fraudulent” windfall.
The directors’ names are known to The Star, but cannot be named as racketeering, money laundering and fraudulent business conduct charges have been opened, with the NPA set to prosecute once investigations are concluded.
Judge Spilg, however, ordered that the directors continue to “comply with all obligations, namely motor finance repayments, if any, motor vehicle insurance and renewal of the disc” of the cars that were seized.
The NPA said the elaborate scheme entailed new recruits “investing” R180 to receive a meat pack, where five more people had to be roped in for investors to move up the levels, to ultimately, receive R3 000, a meat pack, and some groceries the more people one recruited.
“The original investor would then help the five he or she recruited to sign up their five new members each. This will then ensure that the original recruiter moves to level two whose benefits are a meat pack, groceries and R500.
“When those on level one are moved to level two by their recruits, the original organiser is pushed to level three. When there (at level three), they get level two benefits plus R3 000,” the NPA said.
The authority added that the lid was blown on the intricate plan when an East London complainant alerted the National Credit Commission, which roped in the Financial Intelligence Centre who traced how the funds were allegedly laundered through various methods, accounts and transactions.
Rabaji was pleased at how all the agencies worked together to foil the supposed looting of people’s money.
“Law enforcement and regulators have moved rapidly in a collaborative effort to rescue those 230 000 people who were being swindled unbeknown to them. We need to continue to co-operate as various state agencies,” Rabaji said.
“The people are under attack from Covid-19, and those who want to rob them of their last cent. Our people are desperate - they are losing their livelihoods.
“They will now be more prone to unscrupulous predators who are cashing-in on this pandemic,” she added.
Asked whether the directors had responded after their accounts were frozen and cars seized, the NPA said: “The orders were served on them last week. We do not have a response at this stage.”