Marion Edmunds
An Israeli conman, posing as a devout Orthodox Jew, has duped Cape Town-based entrepreneurs into investing millions of rands in a fraudulent investment scheme and skipped the country.
The SAPS’s Commercial Branch is investigating Shmuel Deri (29), who is alleged to have left about 65 investors, many from Sea Point and Clifton, out of pocket to the tune of R80-million.
Deri, the son of an Israeli Orthodox rabbi, came to Cape Town in the early 1990s and befriended the Feinsteins, who had returned from the United States to Cape Town in 1994. Deri rented an apartment in Clifton, went to shul in Sea Point, and spent hours reading the Torah. Di Feinstein was enchanted with the bright young man.
“He was just a small little thing, with his big leather-bound books. We thought he was a whizz-kid, a George Soros in the making,” said Feinstein ruefully this week. “He used to call me ‘Mommy’.”
Feinstein and her husband were the first investors in Deri’s investment programmes. He claimed he would make fortunes for his clients by skimming profits off large international foreign exchange deals, which he could put together with the help of international contacts. Deri spoke Arabic, Hebrew and French, and had lived with his father’s family in Paris.
Deri allegedly offered a range of deals, including one in which he promised a monthly 2,5% interest payment on capital investments, in any currency in any bank account in the world. He provided wealthy South Africans with a way to get their savings out of the country, in spite of foreign exchange laws then in force, and others with a chance to make their off- shore savings grow beyond the normal rates of return.
Deri employed Feinstein’s son-in-law, Israeli-born Yaron Yehudah. Because of her faith in him, Feinstein was happy to use her London bank accounts to shift funds, allegedly to make profits for his clients. Yehudah had signing powers on her accounts and did Deri’s paperwork.
For three years, the Feinsteins were paid R32 000 a month on their investments. Deri helped establish a low-cost housing company, Horizon Homes, as well as import- export companies. He also opened a company in Canada called Famcor and invested in a building in Toronto. Deri flew out a Paris- based friend, Sylvia Hanich, to help run Horizon Homes, which is currently under sequestration.
The sweet life came to an abrupt end in October last year. Deri and Hanich flew to Paris, and phoned Feinstein to say that certain payments would be late. Feinstein flew to Paris to find out what was going on, and smelled a rat. “I knew there was something wrong when he did not pick me up as usual in the chauffeur-driven Rolls Royce … I also knew there was something wrong when we went out to dinner at a non- kosher restaurant. This boy had not eaten a single meal in my house over three years because I don’t run a kosher kitchen,” she said.
Feinstein had failed to pick up earlier signs of Deri’s duplicity. She did not question the fact that he employed a bodyguard to protect him from kidnapping, nor did she think twice before signing the leases on his rented accommodation, his leased Jaguar, nor when her husband organised him an American credit card. She said she has been left with his debts, his telephone bills and a distraught family.
She reported Deri to the police, and is co- operating fully with the investigation. She said Yehudah, who has since flown to Israel with private investigators to track down Deri and the money, would return to South Africa to assist in the investigation. She said he had received death threats and been beaten up, apparently at the behest of angry investors. Yehuda is signatory of many of the investment contracts, while Deri is not.
Private investigators in Cape Town are also chasing the money on behalf of investors who do not want to be named. Reasons given for preserving anonymity range from wanting to protect the Jewish community from anti- Semitism to not wanting to expose individual investors’ stupidity and greed. The police have yet to establish a list of suspects.
Investigating officer Inspector Jeff Edwards, says he expects it is going to be difficult to unravel what happened. “Because many people broke foreign exchange regulations, they will not come forward to reveal their losses nor give evidence. There are stories about people losing everything … but they could be exaggerated.”
An Interpol South Africa representative says Deri is wanted by the Israeli police, but could not say for what crime. Deri could not be found for comment.