US bankers sue SA govt

South Africa is being sued for more than R1-billion by a group of United States bankers and businessmen who claim to have been defrauded by rogue apartheid-era spies.

And South Africa’s new democratic government is accused of deliberately lying to protect the rogue agents from having to testify in an open court.

The spooks, including the flamboyant Riaan Stander and Roelof van Rooyen, allegedly used a network of military intelligence and National Intelligence Agency (NIA) front companies to milk five private investors and a US collateral trading house, the Trust Group Financial Services, of $100-million as part of a supposed sanctions-busting operation between 1989 and 1991.

Stander and Van Rooyen also allegedly duped the Americans into hiring one of the front companies, Intercol, for an extra $300 000 to recover their investment from a series of secret European bank accounts.

The money instead appears to have been deposited in Van Rooyen’s personal Citibank account in Greece, before vanishing.

High-powered Washington attorney Joe D’Erasmo on Thursday said the South African government was aware of the scam at the time and was therefore legally responsible for compensating all six of his American clients.

“Both South African government officials and [the] NIA knew the true objectives of Intercol, Stander and Van Rooyen, [but] are concealing the identity of witnesses, records and documents which [prove] the operation was government controlled,” said D’Erasmo.

“The objective is to avoid a damages suit against the Republic of South Africa and to deny my clients their constitutional right of access to the courts. Moreover, the [government] has deliberately misled us about Intercol, Stander and Van Rooyen’s true functions, and has both ratified and benefited from their actions.”

D’Erasmo has already won an initial $18-million damages judgement against Stander and Van Rooyen from the New York district court and has applied for an additional $100-million declaratory judgement against the South African government in the Washington DC district court.

“The government appears to believe that this problem will go away. But we have done our homework and are very serious,” said D’Erasmo.

Legal papers filed with the US courts in March this year allege that the South African police have had evidence since 1995 that Stander received electronic transfers of up to $30-million through his Volkskas and Nedbank accounts, and that Van Rooyen received at least one $100-million deposit.

The money was, D’Erasmo claims, part of the proceeds of “Operation Hammer”—an unrelated sanctions-busting financial scheme involving letters of credit from large international banks and allegedly underwritten by the Central Intelligence Agency (CIA) and intelligence agencies in Britain and Germany.

Trust Group Financial Services and D’Erasmo’s five other clients claim they were unwittingly used to launder the money, and were then cheated out of a promised $70-million commission.

Intercol was hired to recover the stolen commissions from various European bank accounts in 1990, and was paid $185 000 in March 1990 and an additional $117 000 in October 1990 to set up the operation.

Stander claimed in a sworn affidavit to the Americans at the time that Intercol had successfully “taken title” of $100-million and would pay out the investors within 30 days.

The money has never been paid out and both Stander and Van Rooyen simply refused to cooperate until the former was detained in Dusseldorf, Germany, in February 1995 and cross-questioned by German police and a Lieutenant Colonel Andre Botha from the South African police.

Van Rooyen confirmed that at least $100-million was on account in New York and indicated in a sworn statement to police that Intercol and its linked companies fed funds and information to Eugene de Kock’s Vlakplaas unit, as well as to the police C1 unit.

He said Stander also tried to use Intercol to infiltrate far-right groups in the Pietersburg area to track weapons smuggling, and repeatedly insisted that intelligence agencies in the US, Germany and Britain were aware of, and sometimes assisted, Intercol operations.

Stander was immediately arrested on charges of fraud and contraventions of the bank Act in South Africa, but was released when local investigators were unable to get an extradition order against Van Rooyen and he refused to return to the country voluntarily for trial.

Senior police advocate Director Julius Weideman confirmed on Thursday that he was part of the state’s legal team still investigating the matter, but was unable to comment immediately.

Weideman’s NIA counterpart, Willem Hanekom, also declined to comment, while agency spokesperson Lorna Daniels said the NIA did not disclose the identities of its past or present operatives and would not comment.

Senior state attorney Ben Minnaar was, however, more forthcoming.

Minnaar, who heads the legal team, confirmed meeting with D’Erasmo in the US in March this year to review the evidence.

“The Americans haven’t served legal papers on us yet, but we will defend ourselves if they do.
We don’t believe that Stander was ever in a position to legally bind the government in any matter. I’ve met with D’Erasmo, and we’ve reviewed their evidence, and if that’s the best they have, their case is very thin,” said Minnaar.

Minnaar declined, however, to comment on Stander and Van Rooyen’s current relations with the government, or to say whether the state had interviewed them regarding the lawsuit.

“I cannot be drawn on these issues at this time,” he said.

US courts appear convinced, however, that Stander and Van Rooyen were both South African intelligence operatives in the early to mid-1990s, and that Stander worked as a contract employee for the NIA after 1994.

US Judge John Sprizzo accepted that Intercol was one of a series of front companies, including Oceantec Syndicate, Cavos Shipping and Eastech Investments, that appear to have been set up by undercover South African police and intelligence units in the early 1990s to generate secret offshore funds for paramilitary operations such as De Kock’s C10 Vlakplaas death squad.

De Kock, who is serving two life sentences plus 212 years in jail for his role in 50 murders, is listed as operations director of Intercol, while Lieutenant Pieter Botha is listed as systems director and General Tai Minnaar as director.

Stander was a low-ranking security policeman at the time. More recently he has served as an NIA operative attached to the agency’s shadowy strategic projects unit headed by Thabo Khubu.—African Eye News Service

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