/ 16 May 2013

How much of your money did J Arthur Brown waste?

How Much Of Your Money Did J Arthur Brown Waste?

J Arthur Brown was convicted on two counts of fraud earlier this week on charges related to his dealings as founder and boss of financial services company Fidentia. 

He was convicted of making false representations in transactions involving dealings with the Transport Education and Training Authority and Mantadia Asset Trust Company, even though Brown stood accused of misappropriating far more funds during his time at the helm of Fidentia.

While many were hoping for a jail term, Brown was given two separate R75 000 fines. 

Here is a look at Brown's conviction in numbers: 

The original amount of money Brown and his associates were accused of being involved in misappropriating through false dealings and dodgy transactions by Fidentia. 

Brown's role as executive chairperson of the investment management business came under harsh scrutiny after Fidentia was placed under curatorship in early 2007. 

The Fidentia group of companies controlled then about R2-billion, of which at least R680-million in client funds is still unaccounted for.

36-month jail sentence
Brown was also handed two 18-month jail terms for his fraud convictions. But, they were both suspended for five years.

183 dropped charges
When Brown was arrested, the state originally laid 192 charges against him. But these fell away when the case went to trial and the state proceeded with only nine charges.

2 convictions and 7 acquittals
In the trial, Brown was acquitted on seven other charges of corruption, money laundering, theft and fraud and was only convicted on two charges.

7-year jail term
Brown's former financial advisor Graham Maddock landed a seven-year jail sentence after admitting wrongdoing in the saga and entered into a plea bargain with the National Prosecuting Authority. After serving two years in jail, he is under correctional supervision for the remainder of his seven-year prison term.

R1-million bail
The Cape Town Magistrate's Court requested the seven figure sum as security for Brown's bail in 2007. Brown, however, did not have that amount in cash and had to offer up securities and other immovable assets to ensure his bail.

One sexual assault
Brown was allegedly raped in the back of a police van taking him from the Cape Town Magistrate's Court to Pollsmoor in 2008. 

2 260 days
This is the number of days the process took from Brown's arrest on March 7 2007 through to his sentence to a fine on May 15 2013.

Those who think Brown has not only gotten off lightly and will return to his lavish lifestyle are wrong. Orders to have Brown sequestrated were given by the Cape Town high court in 2008 after it was found that he was hopelessly insolvent – meaning his liabilities far outweighed his assets.

R6-million in criminal justice fees
After Brown was first arrested in 2007, the state spent an estimated R10-million trying to convict him. State advocates and private counsel both approximated a cost of R30 000 a day in court for the state prosecution, magistrate's or judges and court orderlies. Then there is the cost associated with incarcerating an awaiting trial prisoner along with their transport to and from prison to court which are pegged at around R80 000 annually, according to correctional services experts. Follow that up with the expense of the myriad of financial experts, forensic analysts and other expert witnesses that were called upon during the trial (whose time was also paid for by the state) and the numbers keep on increasing.

Brown spent over 50 days in court and eight intermittent months in jail during his trial; so R6-million for the entire process could even be described as conservative.