Law firm probes R150m ‘scam’

Weekend Argus (Saturday Edition) - - NEWS - TA­NIA BROUGHTON and BRONWYN GERRETSEN

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

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