Investigative journalism is like peeling an onion. Especially when you’re dealing with complex structures designed to defraud the unwary because vendors have a vested interest in keeping things dark and confusing. But dig for long enough, rattle enough cages and eventually the muck is revealed in all its ugliness.
When OffshoreAlert broke its story last week alleging a South African was at the centre of the Belvedere scandal, potentially the Southern Hemisphere’s biggest ever Ponzi scheme, it was mostly ignored. Capetonian, Cobus Kellermann seemed to shrug it off. His Mauritius-based partner David Cosgrove, Irish by birth but domiciled in South Africa for most of his life, responded by issuing a letter to Belvedere clients calling the report “sensationalist and unfounded.”
Cosgrove’s letter says: “We take these allegations very seriously and are in the process of communicating directly with the publication. In the interim, and in the interests of transparency, we debunk the core of the allegations in the table below.” The table he refers to contains a list of denials that only the naive would swallow.
For his part, Kellermann was relaxed until Saturday morning when I asked him to comment on my draft follow-up to the OffshoreAlert expose’. There was no direct response but his Cape Town money management business Clarus Capital, moved swiftly to disown him. Kellermann’s name (and that of Anchor Capital CEO Peter Armitage) was removed from the list of “key people” on the company’s website. Then the website itself was closed down. Clarus clients who did inquire were told by Kellermann’s colleagues he no longer works there.
My bet is Kellermann is in either in or on his way to Mauritius where his business partner and the other Ponzi kingpin David Cosgrove has been operating from. They may both be planning their relocation to Australia, a popular haven for South African criminals.
Among South Africans wanted for white collar crimes at home, but living out loud in Australia are Barry Tannenbaum (R10bn Ponzi king), John Stratton (Kebble fraud), Barry Duke (Beige Holdings) and Ed Dutton (Interboard). Australia refuses to allow extradition to SA because it regards the local prison system as not up to its human rights standards.
The now exposed Belvedere Ponzi kingpin David Cosgrove is no stranger to the South African financial authorities. Just over a decade back, he single handedly collapsed JSE-listed financial services company mCubed after the Reserve Bank and SARS discovered he was helping clients to illegally ship money offshore.
Described by those who know him as a high-pressure salesman who considers laws and regulations the same way SA taxi drivers view traffic lights, Cosgrove used the institutional offshore allowance as a vehicle to prey on rich South Africans nervous about the country’s future.
When the scheme was discovered, the authorities levelled a R140m fine on mCubed, which in effect killed the business, a piece of which was later picked up by the equally corrupted Fidentia. As a result, Cosgrove is about as popular at the Financial Services Board and in SA financial circles generally, as Netanyahu would be at an ISIS gathering.
There is no longer any doubting Irishman Cosgrove’s role in what OffshoreAlert’s proprietor David Marchant describes as an “unprecedented” Ponzi scheme. Cosgrove runs Mauritius-based Belvedere Management the spider in the complex web.Kellermann is named as Cosgrove’s 50% partner in documents lodged with the Mauritius Financial Services Commission (MFSC).
How big is the scam? In documents submitted to the island state’s authorities, Belvedere says it has R200bn ($16.5bn) in assets under management.
Outside of working hours, Cosgrove spends most of his time at home in one of Mauritius’s luxury residential estates where foreigners are allowed to invest. His family lives in a similar estate in Paarl in the Western Cape.
Although Cosgrove’s name appeared nowhere in Clarus Capital documentation, Kellermann’s partner has also played an active part in building the Cape-based money manager. He was intimately involved in hiring by conducting pre-employment interviews with senior staff. Cosgrove made regular numerous visits to the business during trips to see his SA-based family.
Cosgrove’s role in the now unraveling Ponzi scheme was to manage the Mauritian operation and, presumably, keep Port Louis comfortable. The cloak of respectability started slipping last year when MFSC officials raided the Belvedere offices and duly ordered two of the major subsidiaries to stop accepting deposits. Its investigations are continuing.
Belvedere was the distribution hub which received funds from Clarus and other organisations. Among them was De Vere, a global financial sales and marketing operation which has a large presence in South Africa. Kellermann was close to De Vere, calling the offices on a daily basis to elicit funds. De Vere invested hundreds of millions of its clients’ funds into the Kellermann schemes. The money was ostensibly invested into a range of trading assets and “private equity” investments. These are the preferred vehicle of Ponzi scheme operators as valuations presented to clients are easily manipulated.
* Click here to read the “back story” and access links to all the Biznews.com coverage of the Belvedere saga.