Two lawyers and five others were arrested in Gauteng on Tuesday for allegedly running an investment scam that promised ”the black empowerment opportunity of a lifetime.”
They allegedly defrauded at least 91 people of a total of R9-million.
Members of the Scorpions detective unit swooped on the homes of the seven in pre-dawn raids in and around Pretoria and Johannesburg.
They would appear on charges of fraud in the Kempton Park Magistrate’s Court later in the day, Gauteng Scorpions head Gerhard Nel said in Pretoria.
He said earlier information from investigators that one of those arrested was a former rightwing politician proved to be incorrect. The seven people started the alleged scam by setting up a front company in Kempton Park.
”They apparently focused on people from previously disadvantaged communities, promising them the black empowerment opportunity of a lifetime,” Nel said.
In terms of the scheme, ”investors” could buy a truck from the company by depositing R70 000. The company guaranteed buyers transport contracts and undertook to provide a driver and free vehicle maintenance.
The money the truck brought in would be sufficient to cover the monthly payments on it and to leave the owner with a income of R23 000 a month, the scheme operators claimed.
”But not a single truck was delivered,” Nel said.
Some of those duped bought more than one truck.
Nel said the alleged scam ran from 1999 to 2000 but a number of franchises under different names were still operating.
”The original company which was only a shell had glossy magazines, grand offices and succeeded in building a legend around the scheme.” Private property and an abattoir in Polokwane were among the things bought with the proceeds from the scheme.
Nel said the investigation took about a year.
People kept on hoping the promises would materialise, and only came forward later.
”It appears that alleged culprits were superior salesmen. They even took people to plants to show them the trucks that were purportedly for sale,” Nel said.
In reality, the company appeared to have never owned a single truck.
Victims were led to believe that the company owned several mines that provided ample scope for transport contracts, and some borrowed money to join the scheme.
”We spoke to at least 91 people who said they received nothing back. We are quite sure there are more,” Nel said. – Sapa