Asset Forfeiture Unit Seize R18 million and three Luxury cars from a pyramid scheme

The National Prosecuting Authority and  Assets Forfeiture Unit says it has been granted a court order to seize R18 million from accounts aa well as three luxurious vehicles owned by a Ponzi Scheme, who have allegedly swindled more than 230 000 investors.

 

Amongst the cars, is an H3 Hummer, a Jaguar XKR Coupe and Audi TT.

 

According to the statement by the NPA issued on Tuesday morning, these were bought with monies received from investors using two companies UP Money and Uniitco.

 

The NPA through its Deputy National Director of Public Prosecutions and head of the Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA), Adv Ouma Rabaji-Rasethaba, said that the two companies and their directors Jade Matsemela and Sipho Martin Mdhuli now face fraud charges and possible money laundering and racketeering charges for violating various sections of the Organised Crime Act.

 

The NPA said Mdhuli and Matsemela’z companies were not registered with the Reserve Bank, not even as a stockvel and used social media to recruit members to join the pyramid scheme.

 

“New participants were required to pay a once off joining fee of R180. This qualified them for a meat pack. The new members were then required to recruit five other new participants; this process was termed level one.

 

The original investor would then help the five he or she recruited to sign up their five new members each. This would then ensure that the original recruiter moved to level 2 whose benefits were a meat pack, groceries and R500.  When those on level one were moved to level two by their recruits, the original organiser was pushed to level three. When here the investor received level two benefits plus R3000,” the NPA said in a statement.

 

The law enforcement authority said the scheme operated by Up Money was also called Push Push because it was structured in such a way that those who joined earlier were pushed to the top by the new recruits.

 

The statement shows that Up Money, before it was busted, had raised an amount of R42 million from its investors between 4 May 2020 and 2 July 2020.

 

However, the NPA said the directors used R12.5 million of the money raised through the pyramid to buy themselves three luxury cars, an H3 Hummer, Jaguar XKR Coupe and about Audi TT and to pay for several purchases made at numerous retail stores.

 

In its statement, the NPA said details about the scheme emerged after a complaint was registered with the National Consumer Commission, who uncovered that Up Money was a pyramid scheme.

 

After the complaint, the statement shows the Financial Intelligence Centre was called in and traced how the money weals laundered through various accounts and transactions.

 

Aubrey Mothombeni