Tue, 29 Sep 2020

PRETORIA, Aug. 4 (Xinhua) -- South Africa's National Prosecuting Authority (NPA) on Tuesday said they will prosecute directors of a sophisticated pyramid scheme that fleeced 230,000 investors of millions of rands amid the COVID-19 lockdown.

Deputy National Director of Public Prosecutions and head of the Asset Forfeiture Unit (AFU) Ouma Rabaji-Rasethaba told a press conference in Pretoria on Tuesday.

She said Up Money unlawfully exploited the COVID-19 pandemic and food security concerns to lure consumers into joining and participating in the Up Money pyramid scheme.

New participants were required to pay a once-off joining fee of 180 rand (10 U.S. dollars). This qualified them for a meat pack. The new members were then required to recruit five other new participants. This process was termed level 1.

The original investor would then help the five members that they recruited to sign up their respective five new members. The original investor would then be moved to level 2 and get more reward of food.

"The sections might be racketeering, money laundering, fraud, theft, assisting another to benefit from proceeds of unlawful activities and acquisition, possession or use of proceeds of unlawful activities, as well as assisting another to benefit from proceeds of unlawful activities," Rabaji-Rasethaba said.

She stated that the AFU has obtained preservation orders from the High Court to freeze bank accounts worth more than 18 million rand and three luxury vehicles.

She said the pyramid scheme, which mainly used social media to recruit members, was neither registered with the Reserve Bank, a registered stokvel, nor a financial service provider.

The National Consumer Commission said pyramid schemes continue to mushroom in communities in different forms.

"If a scheme promises you high returns, especially 20 percent above the repo rate, then you should know it is a pyramid scheme," said the commission.

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