A High Court order has frozen R43-million linked to the Ponzi scheme allegedly headed by Barry Tannenbaum.
On Friday, the High Court in Pretoria granted the preservation order to the National Prosecuting Authority's asset forfeiture unit in terms of the Prevention of Organised Crime Act, NPA spokesperson Mthunzi Mhaga said in a statement.
"The order freezes an estimated amount of just less than R44-million held in two bank accounts in the name of Darryl Leigh and the Darryl Leigh Trust," he said
Source: Mail & Guardian
Showing posts with label Darryl Leigh. Show all posts
Showing posts with label Darryl Leigh. Show all posts
Saturday, August 1, 2009
Investigators begin to unravel Ponzi scheme
A High Court order has frozen R43-million linked to the Ponzi scheme allegedly headed by Barry Tannenbaum. On Friday, the High Court in Pretoria granted the preservation order to the National Prosecuting Authority's asset forfeiture unit in terms of the Prevention of Organised Crime Act, NPA spokesperson Mthunzi Mhaga said in a statement. "The order freezes an estimated amount of just less than R44-million held in two bank accounts in the name of Darryl Leigh and the Darryl Leigh Trust," he said
Tannenbaum, whose estate was provisionally sequestrated in June, was a trustee of the Darryl Leigh Trust. Legal adviser Darryl Leigh and attorney Dean Rees are accused of recruiting investors for the scheme. Mhaga said evidence in court appeared to indicate that the money in the now frozen accounts was the proceeds of the Ponzi scheme. Rather than distributing actual profits, a Ponzi scheme uses funds from investors to pay generous "returns" to other investors.
Mhaga said it appeared that the frozen accounts were used to launder some of the scheme's funds. "It is alleged that as a result of this Ponzi scheme nearly R97-million was transferred from Tannenbaum private accounts to those of Leigh," he said. Mhaga said money invested was allegedly transferred to Tannenbaum's personal accounts. Some was then moved to Leigh's personal account and channelled from there to his trust account. He alleged that at least R96 263 022 was transferred from Tannenbaum's personal bank accounts in South Africa to Leigh's personal account between October 2006 and November 2008. "Also, between October 2006 and June 2009, 23 deposits were made into the Darryl Leigh Trust bank account, amounting to R51 601 799." Of the 23 deposits, 17 deposits (totalling R39 298 365) was money transferred from Tannenbaum's two personal accounts to Leigh's personal account, then moved to the Darryl Leigh trust account.
Mhaga said the NPA, the police, the Financial Intelligence Centre, the South African Revenue Service and the South African Reserve Bank were engaged in a "massive" joint effort to investigate the alleged Ponzi scheme. Earlier this month, Leigh's assets, including two Lamborghinis and three properties, were seized. This asset seizure application was reportedly brought by Johannesburg businessman Christopher Leppan, who also brought an application in June which resulted in the provisional sequestration of Tannenbaum's estate in South Africa. Leppan claimed he was owed R2,88-million.
Mhaga said Ponzi schemes usually had four characteristics: the bait, the hook, the line and the sinker. The bait was promises of high returns and was used to lure investors; the hook was a complicated, but fictitious business model used to justify the promised returns; the line was the standing in society of the fraudster; and the sinker, which usually ended the scheme, was absence or paucity of commercial activity.
Source: Mail & Guardian
Tannenbaum, whose estate was provisionally sequestrated in June, was a trustee of the Darryl Leigh Trust. Legal adviser Darryl Leigh and attorney Dean Rees are accused of recruiting investors for the scheme. Mhaga said evidence in court appeared to indicate that the money in the now frozen accounts was the proceeds of the Ponzi scheme. Rather than distributing actual profits, a Ponzi scheme uses funds from investors to pay generous "returns" to other investors.
Mhaga said it appeared that the frozen accounts were used to launder some of the scheme's funds. "It is alleged that as a result of this Ponzi scheme nearly R97-million was transferred from Tannenbaum private accounts to those of Leigh," he said. Mhaga said money invested was allegedly transferred to Tannenbaum's personal accounts. Some was then moved to Leigh's personal account and channelled from there to his trust account. He alleged that at least R96 263 022 was transferred from Tannenbaum's personal bank accounts in South Africa to Leigh's personal account between October 2006 and November 2008. "Also, between October 2006 and June 2009, 23 deposits were made into the Darryl Leigh Trust bank account, amounting to R51 601 799." Of the 23 deposits, 17 deposits (totalling R39 298 365) was money transferred from Tannenbaum's two personal accounts to Leigh's personal account, then moved to the Darryl Leigh trust account.
Mhaga said the NPA, the police, the Financial Intelligence Centre, the South African Revenue Service and the South African Reserve Bank were engaged in a "massive" joint effort to investigate the alleged Ponzi scheme. Earlier this month, Leigh's assets, including two Lamborghinis and three properties, were seized. This asset seizure application was reportedly brought by Johannesburg businessman Christopher Leppan, who also brought an application in June which resulted in the provisional sequestration of Tannenbaum's estate in South Africa. Leppan claimed he was owed R2,88-million.
Mhaga said Ponzi schemes usually had four characteristics: the bait, the hook, the line and the sinker. The bait was promises of high returns and was used to lure investors; the hook was a complicated, but fictitious business model used to justify the promised returns; the line was the standing in society of the fraudster; and the sinker, which usually ended the scheme, was absence or paucity of commercial activity.
Source: Mail & Guardian
Thursday, June 11, 2009
SA rocked by R10bn Ponzi scheme
One of South Africa's largest Ponzi schemes, estimated to be worth up to R10-billion, has been uncovered, reports said on Thursday. The weekly Financial Mail, the Star and website moneyweb.co.za reported that this scheme could outstrip Fidentia and other scams by billions of rands. It said some of South Africa's wealthiest families seemed to have been targeted. A website set up to provide details said the scheme was allegedly run by Barry Tannenbaum (43), grandson of Adcock Ingram founder Harold Tannenbaum.
According to the Financial Mail, Tannenbaum may have defrauded investors through his Frankel International and Frankel Chemical Corp companies. Tannenbaum allegedly asked investors to put money in his companies, Frankel International and Frankel Chemicals, by offering returns of more than 200% a year, the magazine said.
The Star reported that estimates showed up to R10-billion could be at stake. One local investor placed as much as R100-million in the scheme. The newspaper named those involved as Tannenbaum and Johannesburg attorneys Dean Rees and Darryl Leigh. It said Rees and Tannenbaum were both blaming each other for the scheme.
The website describes the Frankel investment scheme as operating as an importer and exporter of active pharmaceutical ingredients (API) to and from foreign countries. "These ingredients are used by manufacturers of generic medicines and a large part of the APIs are used in the manufacturing of the antiretroviral drug prescribed to people who are exposed to or contracted HIV/Aids."
The site added that Tannenbaum promoted his concept to investors "claiming massive returns on investments". It alleges that he supported his proposition "by showing prospects purchase orders from major pharmaceutical companies such as Adcock Ingram, Aspen and Novartis for the respective APIs valued in the many millions." Tannenbaum currently lives in Sydney, while Rees is in Switzerland. Leigh told the Star that he could not comment "at this stage".
According to the Financial Mail, victims of the scheme included former Pick n Pay CEO Sean Summers. "Summers is fortunate in that, while he is believed to have put more than R20-million into the scheme, he hasn't lost everything," the publication said. Other victims included Allan Rock, a professional tennis coach, accountant Howard Lowenthal and broker Wayne Gadden, the Financial Mail said. Uraj Tewary, a call centre administrator, was also a victim. He took his wife's pension money and any money that his family could get, and put it into the scheme. "The problem is that my wife is due to have a baby any day now and I don't even have money to pay the doctor," Tewary told the Financial Mail.
The website describes a Ponzi scheme as a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. It usually offers returns that other investments cannot guarantee in order to entice new investors, in the form of short-term returns that are either abnormally high or unusually consistent.
The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going. The system is destined to collapse because the earnings, if any, are less than the payments. The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903.
Source: Mail & Guardian
According to the Financial Mail, Tannenbaum may have defrauded investors through his Frankel International and Frankel Chemical Corp companies. Tannenbaum allegedly asked investors to put money in his companies, Frankel International and Frankel Chemicals, by offering returns of more than 200% a year, the magazine said.
The Star reported that estimates showed up to R10-billion could be at stake. One local investor placed as much as R100-million in the scheme. The newspaper named those involved as Tannenbaum and Johannesburg attorneys Dean Rees and Darryl Leigh. It said Rees and Tannenbaum were both blaming each other for the scheme.
The website describes the Frankel investment scheme as operating as an importer and exporter of active pharmaceutical ingredients (API) to and from foreign countries. "These ingredients are used by manufacturers of generic medicines and a large part of the APIs are used in the manufacturing of the antiretroviral drug prescribed to people who are exposed to or contracted HIV/Aids."
The site added that Tannenbaum promoted his concept to investors "claiming massive returns on investments". It alleges that he supported his proposition "by showing prospects purchase orders from major pharmaceutical companies such as Adcock Ingram, Aspen and Novartis for the respective APIs valued in the many millions." Tannenbaum currently lives in Sydney, while Rees is in Switzerland. Leigh told the Star that he could not comment "at this stage".
According to the Financial Mail, victims of the scheme included former Pick n Pay CEO Sean Summers. "Summers is fortunate in that, while he is believed to have put more than R20-million into the scheme, he hasn't lost everything," the publication said. Other victims included Allan Rock, a professional tennis coach, accountant Howard Lowenthal and broker Wayne Gadden, the Financial Mail said. Uraj Tewary, a call centre administrator, was also a victim. He took his wife's pension money and any money that his family could get, and put it into the scheme. "The problem is that my wife is due to have a baby any day now and I don't even have money to pay the doctor," Tewary told the Financial Mail.
The website describes a Ponzi scheme as a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. It usually offers returns that other investments cannot guarantee in order to entice new investors, in the form of short-term returns that are either abnormally high or unusually consistent.
The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going. The system is destined to collapse because the earnings, if any, are less than the payments. The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903.
Source: Mail & Guardian
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