The lawyer who defrauded accident victims has a huge foreign share portfolio
Marianne Merten
Hoosain Mohamed the Cape Town attorney struck off the roll for pocketing millions of rands from poor accident victims has admitted to net assets of almost R3-million and an overseas share portfolio of ”a million or two rand”.
He was arrested last Thursday in connection with more than 180 provisional counts of fraud and theft involving R6,8-million.
During his bail application Mohamed acknowledged taking hundreds of thousands of rands out of the country on numerous occasions since 1996. But he maintained these amounts were legitimate allowances for family trips abroad and that his share portfolio was ”probably worthless” by now owing to global downward share trends.
On Wednesday the state obtained a seven-day postponement to investigate the overseas share assets, possible exchange control contraventions and misrepresentations to the Reserve Bank.
The state alleges special arrangements were made for Mohamed to take out money of South Africa, including R620 000 in January 1999.
”It is of very [great] importance to know how much money the accused has invested overseas and how he got the money to invest overseas,” said Wynberg magistrate Jackie Redelinghuys, adding it would influence the court’s assessment of flight risk.
State prosecutor advocate Ben Avenant’s request for co-operation on these issues was flatly turned down by defence counsel advocate William King. ”He [Mohamed] does not wish to assist the state in his prosecution.”
Mohamed (60), who is suffering from hypertension worsened by stress, is detained at Pollsmoor prison until his next court appearance. The criminal case by the Directorate of Special Operations formerly the Office for Serious Economic Offences has come as Mohamed is defending a civil suit from former clients who say they were cheated out of their full compensation by the Road Accident Fund (RAF).
In February 1999 noseWEEK editor Martin Welz and the Mail & Guardian exposed an alleged scam by Mohamed’s Athlone-based law firm to pocket large portions of the fund pay-outs to predominately uneducated, poor accident survivors. Many of the victims were approached while recovering in hospitals by touts working for the law firm.
Welz and one victim, Freddie Yalezo, approached the Cape High Court in 1999 for relief. Several delays ensued because of legal battles to secure client files from H Mohamed & Associates. Further delays occurred as scores of other claimants came forward.
Another court application to allow approximately 20 additional claim-ants to join the civil claim is expected shortly. This would increase the number of claimants to 210.
Approaches have also been made to the Attorney’s Fidelity Fund a statutory professional insurer to pay claimants’ the shortfall between what the RAF awarded them and what they received from Mohamed. A decision is awaited.
Yalezo and other claimants attended the bail proceedings this week. Dora Davids, who believes she has not received all the monies due to her, said: ”I didn’t know where to go to. I saw on TV they got him now, and I decided I’ll come to court.” The elderly woman was injured in an accident in January 1993.
Mohamed told the court that the difference between what the RAF paid out and what his clients received was a ”success fee”. An accounting procedure using two cheques was established because the law society frowned upon the practice.
According to the state’s draft charge sheet Mohamed allegedly called clients to his law firm’s offices. The prosecution claims the accident victims were then accompanied to a nearby bank to deposit one cheque and also asked to withdraw up to R20 000 for ”legal fees”.
The second cheque, although made out in the claimant’s name, was either cashed by Mohamed personally or paid into his private bank account, the charge sheet alleges. The state also claims Mohamed failed to tell his clients the RAF had already refunded his legal costs.
The court heard that Mohamed still wields tremendous influence at the law firm from which he resigned.
As recently as mid-June he called a meeting at the firm when staffers were about to be questioned by police investigators. Mohamed maintained this week that he had only advised them to have a lawyer present when they were questioned.
He denied the state’s contention that the father and son team of Godfrey, Eddie and Eric Mobo, were touts. He said they were clerks who spent most of their time in the office, but ”if they brought in a client or two at any time we never objected to that”.
Mohamed told the court he could not afford more than R20 000 bail as he had few cash resources. ”In view of the publicity … the banks are very reluctant … When I withdrew from the practice the sources of my income virtually came to an end.”
Earlier the court heard Mohamed still owned the Athlone building of his now disbanded law firm and his luxury home in nearby Rylands. He has other properties in Paarl, Ceres and Hawston. His wife is the director of a closed corporation which at one stage owned 14 properties in Tableview, northern Cape Town.
Following the February 1999 expose the then minister of transport, Mac Maharaj, ordered an inquiry into the RAF.
Last month Judge Kathy Satchwell, the head of the government- appointed commission of enquiry, told Parliament the fund’s deficit had increased to almost R10,5-billion by April last year.