A Department of Arts and Agriculture official and three others who allegedly operated a pyramid scheme in Ulundi have been stripped of R3.3 million because the money was obtained through criminal activity.
Yesterday, a Pietermaritzburg High Court judge granted an order permitting the State to claim the money which was collected in the three days that the scheme operated before police got wind of it. The modus operandi used was to advertise and entice the public to invest their money in exchange for high returns after a specific period ranging from one week to a month. A prospective investor paying an amount of R300 would get a return of R1 000 after a week.
A director of public prosecutions, Knorx Molelle, said in court papers that investigations into the crime revealed that the department official and three others – who were not named as they had not been charged – met at the Ulundi Holiday Inn in 2011 and established an investment club operating under two names – Inzuzo and Intuthuko.
It operated from outside the premises of the Ulundi Old Spar and investors were directed inside to an office to make payment.
“The investors’ details were then noted in a hard-cover notebook and each investor |received a receipt upon paying the amount to be invested. None of the investors signed contracts or agreements of any kind,” he said.
In the three days that the club operated R4.3 million was collected. On February 18 the official and another man were robbed of R1.3m during a hijacking while they were transporting R1.3m from the Spar office to the official’s workplace.
The next day police seized R3.3m from the safe.
Molelle said that the operators of the scheme had misrepresented the scheme to the public. Also, in terms of the Banks Act, it was an offence to conduct the business of a bank without registering it as one.
