CityPress - - Business -

‘Inever thought it would hap­pen to me. I thought I was fairly fi­nan­cially as­tute. How wrong I was,” Gil­lian says about her ex­pe­ri­ence of be­ing fleeced of hun­dreds of thou­sands of rands in a Ponzi scheme. As with most schemes, it all started with a re­fer­ral from a fam­ily mem­ber. “My mother one day started telling me how a good fam­ily friend of ours was mak­ing a lot of money off an in­vest­ment.”

Both Gil­lian and her mother had money in­vested in unit trusts with Al­lan Gray, but the re­turns the friend was get­ting were so much bet­ter. Too good to be true – as it turned out.

The fam­ily friend in ques­tion had be­come friendly with his neigh­bour, who claimed to be a fu­tures trader.

“Our friend had given this trader al­most R1 mil­lion and had been re­ceiv­ing monthly pay­outs of around 19% a year on the in­vest­ment – that was just in in­ter­est, not the cap­i­tal. We all thought, ‘What a find!’ and in­vited him to our home.

“He sat in my lounge in my hum­ble apart­ment and met my kids. He was in­formed that I was giv­ing him some of my life sav­ings, he un­der­stood what this R150 000 meant to me,” says Gil­lian, who adds that her mother had told so many of her friends about this great “fu­tures trader” that col­lec­tively they had in­vested around R2.5 mil­lion.

It took time to re­ceive any in­vest­ment doc­u­men­ta­tion, and Gil­lian and the other in­vestors were told to leave the in­vest­ment to grow.

They were also told that if they needed any of the money soon, he could not guar­an­tee where the mar­ket would be and they could in­cur losses. This is fairly nor­mal for any mar­ket-re­lated in­vest­ment as mar­kets can fall over the short term, but it did not tie in with his story of pro­vid­ing a 19% per an­num in­come re­turn as ini­tially sug­gested.

Al­though Gil­lian did re­ceive some money from time to time, she started to feel un­easy. Then, af­ter two years of no re­turns, they started to sus­pect some­thing was se­ri­ously wrong.

“The rands be­gan to drop and we re­alised we could not get hold of this guy. He never re­turned our calls, or he would even­tu­ally re­turn the calls, but ‘be in a meet­ing’ so couldn’t talk. Then we emailed him giv­ing no­tice that we wanted our money back.”

From time to time he would give them a small cash pay­ment. “We would cling to this ges­ture of good­will be­cause we did not want to fully ac­knowl­edge that we had given our pre­cious sav­ings with­out any proof, or find out that this man was not who he said he was. We went blindly on trust.

“It was such a won­der­ful feel­ing to trust, but so aw­ful to be be­trayed.”

Gil­lian also had to ac­knowl­edge the role of their good fam­ily friend. He was at the top of the scheme and had been the bait with his ini­tial pay­outs, which had duped the rest of them be­cause they trusted him.

“Once we re­alised the bru­tal truth, our money was gone. Then be­gan the fran­tic at­tempts to re­cover it, throw­ing good money af­ter bad, pay­ing lawyers to in­ves­ti­gate, which all cost more than it was worth.”

Only at this stage did Gil­lian do the re­search she should have done at the out­set. She con­tacted the Fi­nan­cial Ser­vices Board (FSB) and dis­cov­ered the trader was not reg­is­tered. All she had was his ID num­ber, which was of no use. The bank they had de­posited the money into was not in­ter­ested that their client had com­mit­ted fraud. “The fraud di­vi­sion would not even re­turn my calls.”

Even­tu­ally Gil­lian re­alised she had to write the money off. She was at least in a po­si­tion where she was still rel­a­tively young and still earn­ing an in­come, but the same was not true for other peo­ple in the group.

“Some had in­vested all their life sav­ings. What kind of heart­less per­son could do this?”

Her last act was to re­port the man to the po­lice. It ap­peared a hope­less task. “I had al­ready phoned all the re­lated crime di­vi­sions for white-col­lar crimes in the coun­try, no one knew the cor­rect process or pro­ce­dure to lay a charge against this crim­i­nal,” says Gil­lian. She then went to her lo­cal po­lice sta­tion.

At the po­lice sta­tion, no one seemed to un­der­stand the crime that had taken place.

“I must have stood in the po­lice sta­tion for an hour try­ing to ex­plain my sit­u­a­tion. Even­tu­ally, they gave up on me and I went home.”

For­tu­nately, in a con­ver­sa­tion with a com­mu­nity

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