Spies caught in R180m scam
Several investigations are under way into NIA operatives allegedly involved in money laundering schemes, writes Justin Arenstein
Police are preparing to arrest at least two members of a shadowy National Intelligence Agency (NIA) unit next week after they allegedly tried to cash stolen share certificates worth more than R180- million.
The operatives have also been linked to the shady financial brokerage being probed by the Heath special investigative unit for accepting three illegal promissory notes from the Mpumalanga Parks Board.
The secret promissory notes offered the parks board’s assets and key game parks to Fenetic Investments for one year as irrevocable and unconditional collateral for an offshore loan of R340-million.
Similar schemes are currently being uncovered in KwaZulu-Natal and the Northern Province.
Gauteng’s provincial housing department has also been accused of issuing at least one R100-million promissory note, or guarantee, to the same company.
Fenetic Investments appears to have been used to launder massive amounts of cash into dollars by the two NIA operatives on a regular basis. The operatives allege in sworn statements to police that they were part of a concerted NIA programme to monitor exchange control violations and were using Fenetic to “access” the financial underworld.
The scheme blew up in their faces in January, however, when Fenetic managing director, Moshe Regenstreich, tried to cash three stolen share certificates they had given him.
Regenstreich reportedly offered the certificates, worth R50-million, R70- million and R63-million, to Johannesburg-based BFS Capital and asked for a $1,5-million short-term loan facility. BFS officials checked with the registered legal custodians of the certificates, Standard Bank, and discovered they were stolen. Bank officials and the police commercial crime unit set a trap and arrested Regenstreich and his financial manager, Gregory Mbokoma, on February 3.
Both men appeared in court on theft and fraud charges. Regenstreich is currently in New York, where he is reportedly speaking with CitiBank and a number of other United States financial institutions about discounting Mpumalanga’s promissory notes.
Gauteng acting attorney general Jan Henning confirmed he had ordered the arrest of the two NIA operatives . “We issued the order last week and want to see these two men before court as soon as possible. We have also received complaints about Fenetic from as far afield as Namibia and have handed them over to the police commercial crime unit,” said Henning.
“They already are conducting their own investigation into Fenetic on a number of issues completely separate from the promissory note or this share certificate story.”
He confirmed that NIA strategic projects general manager Thabo Kubu had submitted a sworn statement confirming that at least one of the operatives worked for him and had briefed him on the share certificates. Henning wouldn’t comment further, but a copy of Kubu’s statement in the possession of the Mail & Guardian adds that the agents had gone “overboard” and were grilled about pocketing “profits” without telling their handlers.
Kubu was unavailable for comment on Thursday but his acting general manager, Mphatamisi Ncumani, confirmed the NIA was aware of the pending charges. “It’s difficult to comment without Kubu here, but I can confirm that one of the agents was disciplined for the incident in April,” said Ncumani.
Fenetic Investments is also at the centre of an unrelated investigation by several banks in South Africa and the US for alleged involvement in dubious schemes dubbed “mythical millions” or “funny money” scams.
Standard Bank internal audit head Charles Whyte confirmed that he was investigating Fenetic and aspects of the promissory note saga. He said the bank had initiated a number of court cases but refused to comment further or give details of the court cases.
“Look, it would be most inappropriate for me to say anything at this stage. Both our own and Heath’s investigations are at a very sensitive stage and I don’t want to say anything now that would affect the various court cases,” said Whyte.
Documents in the possession of M&G indicate, however, that Standard Bank believes Fenetic may be linked to a Sandton-based Israeli syndicate which fleeced the bank of millions of rands in a “mythical millions” scheme earlier this year. Whyte indicated he was aware of the syndicate but again refused to comment.
Citibank has also issued a fraud alert, warning that Fenetic and Mbokoma had attempted to establish accounts with its South Africa offices in questionable circumstances.
Judge Willem Heath’s investigation manager, Jonathan Dutton, confirmed that he was aware of the pending arrests and the commercial crime investigation. “We’ve spoken with Henning and the banks and are monitoring the situation there. We’ve also met with the commercial crime guys, but their charges fall outside our jurisdiction because they are private- sector related,” he said. “What we’re really concentrating on at the moment are all the Mpumalanga promissory notes. We’ve set up a meeting with the local government MEC, Craig Padayachee, next week to discuss two new ones that came to light in Ekangala.”
He also confirmed that the unit was getting a presidential proclamation to investigate promissory notes in other provinces but declined to comment until the proclamation is issued.
Fenetic attorney Tony Mostert is on holiday in Italy and was unable to comment, but his office said the company was unaware of the new charges or commercial crime unit investigation. - African Eye News Service