Mungo Soggot
A German citizen charged with sodomy and a string of banking scams involving sums of up to $100-billion has joined the club of heavyweight alleged fraudsters who fled South Africa and are now fighting extradition.
Manfred Zachel was imprisoned in South Africa in 1996 after allegedly pulling off several frauds using a fake bank he set up in the Seychelles and allegedly sodomising an associate’s 13-year-old son. Zachel threatened to sue for wrongful imprisonment, but escaped last June while recuperating from a back operation at a Pretoria clinic.
He fled to Britain where he was arrested in the coastal resort of Torquay. The South African Office for Serious Economic Offences (OSEO) applied for his extradition and a London magistrate ordered he be flown back to South Africa last month, but Zachel is appealing.
An affidavit used in Zachel’s South African bail application says he has operated scams in several other countries, angering many of his targets. Former OSEO superintendent Etienne Lambrechts says in the affidavit: “According to Interpol, a Dutch organisation which was ripped off intends to put pressure on Zachel to refund it for the loss, after which he will be killed. I am also in possession of information that members of the former East German security police who were defrauded in a similar manner also intend to kill Mr Zachel.”
Lambrechts, who recently quit the OSEO, says Zachel bought 12 bulletproof vests and some night-sight equipment. He also found that Zachel has several passports, some from a non-existent country called the Dominium of Melchizedeck. “After he was released in 1994 from prison in Germany, he travelled from place to place. He was, among other places, in Germany, then in England, thereafter the United States, and then, alas, South Africa.”
If Zachel can afford it, he could appeal against the extradition order all the way to Britain’s highest court of appeal, the House of Lords, and even to European Union courts – a strategy adopted by one of South Africa’s most prominent alleged fraudsters, Oliver Hill.
Hill, wanted by the Reserve Bank and the Transvaal attorney general for a multi-million rand “roundtripping” fraud scheme involving forged Eskom bonds, has lost a series of costly appeals over the past two years while imprisoned in London. He was recently transferred to a mental asylum after petitioning the British government to block his extradition.
Another alleged foreign exchange fraudster in exile who is in the sights of the South African fraud authorities is Edward Dutton, a flamboyant Johannesburg businessman who fled his R205-million fraud trial in Johannesburg in 1994 on the pretext of a dentist’s appointment.
Dutton flew to Australia and changed his name to Michael Addison, but was arrested by Australian police in 1996. A New South Wales court ruled that he could not be extradited because South Africa had not supplied all the evidence against him heard during his trial.
OSEO advocate James de Villiers, who prosecuted the Dutton case, says the Australian authorities had previously agreed that he need send only sections of the 30 000 page record: “Otherwise we would have had to charter a Boeing, as they needed seven copies of the record.”
Dutton was released on bail while the Australian authorities appealed against the magistrate’s decision. He was rearrested in Sydney last month, but released again on bail.
De Villiers says the OSEO will benefit from a recent simplification of Australia’s extradition legislation when the appeal is heard shortly in Australia’s Federal Court. Dutton could delay his return home by appealing to higher courts. Dutton has protested his innocence, claiming he was targeted for progressive employment practices. He even dispatched one of his advocates to South Africa to explore obtaining amnesty from the Truth and Reconciliation Commission.
De Villiers says since 1994 South Africa has became a haven for “prime bank-instrument fraud”, involving bank documents like letters of credit and certificates of deposit.
According to court documents, Zachel came to South Africa from San Francisco in 1995 and teamed up with several other individuals, claiming he intended starting a bank in Africa. He eventually chose the Seychelles Islands, where he set up what he called the Atlantis International Bank, but never registered it with the Seychelles banking authorities.
Back in his Pretoria office, Zachel allegedly produced a series of forged documents, among them letters of credit, and faxed them back to his Seychelles accomplices. The so-called bank then faxed the documents back to him and he allegedly used them in a string of South African transactions, including property deals in Pretoria.
One of the most intriguing documents found by police is made out to one Burt Rogers. It claims that the Atlantis International Bank would advance Rogers $100-billion – roughly equal to South Africa’s gross domestic product.
Zachel was arrested after local banking group Absa, which Zachel tried to use in one of his scams, alerted the OSEO.
Zachel allegedly boosted his financial credibility with “proof-of-funds letters” from a company called Makrin International, which he claimed was a British arm of Anglo American.