Some of South Africa's very rich and famous, who have a reputation of being wily and extremely canny when it comes to matters of money, have been taken for the most expensive rides of their lives. Moving among the pastures of the big players, a special brand of fraudsters have learned how to remove the fleece so gently that the victims do not know what is happening until they begin to feel the cold. In recent times, billions in rich people's wealth have been swindled from millionaires--by those from their own 'club'.
And if you believe that the financial crisis has stripped many Africans of their fortunes, think again. One of our own millionaires is said to have relieved a clutch of the continent's very rich of nearly R15bn ($1.8bn), although he is loudly protesting to the contrary. How did he make that much money from those who really should have known better?
Blame it on the 'Ponzi Scheme', a scam that has been around for a century but that does not get the media space and time because many victims prefer to take the loss quietly to avoid embarrassing publicity.
It seems wealthy people are intrinsically suspicious of people with a scheme to sell if they do not have a lot of money of their own. So to get away with a Ponzi deal, you must at least look wealthy. People will believe anything if it is from the right source; especially from one of their own.
In South Africa, a Ponzi scheme recently relieved the well-heeled of large amounts of money, by fleecing several of the country's wealthiest individuals in the financial and retail community.
Potentially South Africa's biggest ever investment scam, it has been established that invoices from high-ranking companies were forged, along with Reserve Bank documentation, audited financial reports and emails from financial institutions.
The man wanted in South Africa for allegedly masterminding the scheme, Barry Tannenbaum, now lives in Sydney, Australia. With estimates of up $12bn in losses from foreign and local investors, Tannenbaum blamed his inability to repay investors on the current economic climate and in an email to South Africa's Personal Finance weekly said he was "amazed to read that I have been guilty of a multibillion-rand scam and that I am compared to Bernie Madoff in the US".
The scheme originated when Tannenbaum and his fund-raising colleagues allegedly offered investors interest of between 15% and 20% every three months, which can...