United African Stokvel’s digital investment scam stretched from SA to neighbouring countries

25 Jul 2023

An investment scam that promised to usher in the digital era for stokvels has claimed financial victims across South Africa and as far afield as Swaziland, Lesotho and Zimbabwe.

Daily Maverick is in direct communication with investors – amounts invested range from less than R15,000 to more than R500,000 in several cases. The victims are mostly aged 30 to 50, with a high number of younger investors aged 2o to 30 and at least two pensioners.

Many are afraid to divulge their contact details as they have not yet told their families that they have lost their life savings in a scam.

Gerhard van Deventer, the head of enforcement at the Financial Sector Conduct Authority (FSCA) has cautioned that although the FSCA is investigating the matter, it has little room to take action as United African Stokvel was not a registered financial services provider. United African Stokvel was also not a member of the National Association of Stokvels after its application was rejected in July 2019.

While many investors are crying out for a refund of their capital, Van Deventer says the FSCA has not handed the matter over to the Asset Forfeiture Unit because there is no evidence of any material funds in the assets that are being investigated. All the money was paid via EFT or debit orders to a Nedbank account.

Cold comfort

While Nedbank did not divulge when the funds in the account were depleted, a spokesperson said there is “zero tolerance” for all forms of dishonesty and criminality, and the bank takes all allegations concerning the abuse of its accounts for fraudulent purposes very seriously.

“Where such allegations are received, we will conduct an internal investigation to establish their veracity and will act immediately to block an account if it is clear that such action will prevent further losses.

“While an account is blocked, it may still receive funds, but the owners of such an account have no ability to access any of the money in the account. The closure of the account is a separate process that only happens after certain legal and governance steps have been completed.

“Nedbank strongly recommends that fraud victims approach the police, as we have no mandate to conduct criminal investigations. We will, however, render all possible assistance to the police to ensure that perpetrators are brought to book.”

The zero-tolerance policy makes for strong wording, but will offer cold comfort to the parents who are most likely going to have to pull their children out of school when they can’t pay school fees; the mother whose husband left her after he found out she lost R118,000 of their savings; the woman whose partner passed away in January, leaving her with two children and a newborn child.

Internal Nedbank investigation

Sibusiso Khumalo, a forensic investigator at Nedbank, has responded to some investors to say they should open a criminal case so that the police can issue a subpoena for information about the fraudulent Nedbank account – such as the account name, address, contact details and bank statements. According to Khumalo, the account has been blocked pending an internal investigation.

When the possibility of the funds being transferred out of the country or into cryptocurrency was raised, the FSCA noted that, if that was the case, it would be unlikely that investors would be able to recover any funds.

“My forensic team is analysing bank account information to determine the flow of funds, and we do plan to interview Darren Langbein,” Van Deventer told Daily Maverick on Monday.

Nkululeko Zitha (name changed to protect identity) joined the stokvel in September 2021 and invested R504,000 from his retrenchment package. He has since opened a fraud case and is still awaiting a response from Nedbank.

Daily Maverick’s continued attempts to reach Darren Langbein (who ran United African Stokvel) via cellphone calls and emails remain unfruitful.

The FSCA’s enforcement division has received only three official complaints regarding United African Stokvel, but additional complaints are being registered through the call centre, particularly since the FSCA launched a call to action for investors last week.

Investors are being asked to provide details of their investments and the presentations made to them about the performance of said investments. All information will be shared with the FSCA lead investigator and then shared with the police for a criminal case.

Investors can contact the FSCA directly on 0800 20 37 22 or 012 428 8000, or log a complaint here. DM

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Cold comfort

Internal Nedbank investigation