Magistrate throws book at ‘serial Ponzi schemers’
Two “serial ponzi schemers”, who took R64m from more than 3,000 “investors” in less then two years were each sentenced to an effective 15 years in jail on Thursday.
Fakazile Mazibuko and Wilson Gazu, both 55, operated their Trade for Life scheme in northern KwaZulu-Natal, encouraging those they knew in the Newcastle and Ladysmith communities, including pensioners, teachers and police officers, to participate in their “get rich quick” plan.
They had previously been involved in another illegal scheme, Travel Venture International (TVI). When that folded they had been too accustomed to the flashy lifestyle, Durban commercial crime court magistrate Christobelle Mazibuko heard during evidence.
State advocate Andre Carlitz said in his argument that the two, who he dubbed “serial ponzi schemers” were “morally corrupt and greedy beyond comprehension”.
Mazibuko, he said, had bought two expensive Mercedes Benz’s in one month and had ordered personalised number plates for both. She had also spent thousands of rand on furniture and clothing and had even given her ex-husband more than R1m.
The Trade for Life Scheme was discovered during investigations into TVI by the Reserve Bank. Forensic accountant Eckhard Volker’s investigation revealed more than 6,024 deposits into various bank accounts from January 2011 to November 2012. This was on the promise that the money would be invested offshore with returns of 40% a month.
While some investors initially received interest payments — which encouraged others to get involved — none of the capital amounts were ever refunded.
The pair pleaded not guilty to all the charges, suggesting that the money had been channeled into an Australian investment scheme which had shut down.
In interviews with social workers doing pre-sentencing reports, they both maintained that they did not know that what they were doing was illegal. They said they were sorry that people had lost money.
But Carlitz argued that this was not true remorse because they were still refusing to be accountable for what happened.
“Dreams were shattered… and even marriages were destroyed,” he said. “You might say people [investors] were stupid … but they had flashy marketing material, contracts filled with legalise, they hired halls … they had an aura of confidence.”
Volker testified that their actions had been financially devastating for their victims, particularly those who were retired or close to retirement and who could never recover. He said while assets had been recovered from them and they were both being liquidated, so far only R1.6m had been recovered.
“If you take into account preferential creditors claims, there is nothing left. And even without these, investors at best will only get two cents on the rand.”
Magistrate Mazibuko said initially it appeared they wanted to plead guilty. If they had, the court could have treated them with more leniency.
While she gave them 25 sentences of 15 years imprisonment, she ordered that they all run concurrently, making it an effective 15 years. They are also still facing charges relating to TVI and other schemes they allegedly ran.
A victim,a policewoman who did not wish to be named, said she was in touch with others and would relay the news. “I came because I wanted to see for myself what happened. I am happy with the sentence but we are still not going to get back our money.”