Law firm probes R150m ‘scam’
GARLICKE and Bousfield, one of Durban’s oldest law firms has called in forensic auditors to assess who its executive consultant, attor ney Colin Cowan, fleeced in what is alleged to be a R150 million pyramid scheme he operated from the law firm’s upmarket Umhlanga Ridge offices.
“This is a like a bad dream. And not one we can wake up from and find that it’s gone,” director Brian Jennings said this week.
Cowan, 71, who was a regarded as a pillar of Durban’s legal community, committed suicide at his Innes Road home 10 days ago, admitting in a suicide note that he had committed fraud.
His death came a day after he was confronted by partners at the law firm about his “bridgeing finance” scheme, which purportedly saw clients hand over a combined R150m on the promise of excellent returns and a guarantee on the law firm’s letterhead.
The partners had been tipped off that same day by bridgeing finance company Rodel, where Cowan had gone in an apparent desperate attempt to raise money to pay back two investors who had become edgy.
His story did not add up and Rodel turned him down, simultaneously alerting Garlicke and Bousfield that their executive consultant appeared to be in financial trouble.
Jennings said a forensic audit was under way.
“Every claim will be looked at. We have insurance,” he said.
“We are doing everything possible to ensure that the claims are thoroughly investigated by independent forensic auditors KPMG. The process is at an early stage and it will take time for a clear picture to emerge.”
He also said there was no suggestion that the 143-year-old firm would close down.
“As far as our normal practice is concerned, it is business as usual and we are confident it will overcome this blight on its integrity,” Jennings said.
Weekend Argus’s sister newspaper, The Mercury, has established that Cowan made a bizarre request to another Durban lawyer six weeks ago, asking that he transfer the entire proceeds of his trust account to that of Garlicke and Bousfield.
When that failed, he approached Rodel, asking for R10m in bridgeing finance on behalf of clients involved in a property deal.
He asked that the money be deposited in Maxprop’s account.
Maxprop MD Russell Scorer said he was unaware of Cowan’s request to Rodel.
Meanwhile, the KwaZuluNatal provincial head of the Hawks, Major-General Johan Booysen, confirmed that a fraud docket had been opened.
He said the police investigation was running parallel with that of forensic auditors to establish what funds were misappropriated and if anyone else was involved.
PYRAMID: Colin Cowan