By Asime Nyide
In today’s court appearance on the 13th of December 2023, Craig Warriner, the alleged mastermind behind the massive BHI Ponzi scheme in South Africa, was denied bail as authorities intensify their investigation into his elaborate financial crimes. Warriner had previously notified the court of his intention to cooperate, admitting to tax fraud and implicating several individuals in his intricate scheme.
The court’s decision to deny bail comes as various government agencies, including the South African Revenue Services, the Directorate of Priority Crimes Investigations, the Reserve Bank of South Africa, and the Financial Sector Conduct Authority, collaborate to uncover the extent of Warriner’s criminal activities. The investigation is expected to conclude around March 2024 due to its complexity and scope.
Warriner, an equity trader, is accused of orchestrating a Ponzi scheme through the BHI Trust, defrauding an estimated R1.18 billion from nearly 220 investors over a decade. The trust allegedly operated without the necessary authorizations, engaging in unauthorized financial activities.
The court documents reveal that Warriner’s fraudulent activities involved using new investments to pay off earlier investors, creating a web of deceit that targeted over 2,000 clients, including high-profile financial advisers. The total investments amassed by Warriner reached a staggering R3 billion.
To find out what he had to say, listen below:
The bail application was characterized by strong opposition from the state, citing several factors that posed a risk if Warriner were to be released. The court considered the likelihood that he might endanger the public, attempt to evade trial, intimidate witnesses, or undermine the proper functioning of the criminal justice system.
One significant factor contributing to the denial of bail was the heightened anger and threats from investors who lost their life savings in the Ponzi scheme. Approximately 15 investors expressed their resentment during a meeting at the prosecutor’s office, creating an atmosphere charged with hostility.
Furthermore, the court highlighted Warriner’s significant financial means, his extensive international connections, and the absence of identifiable assets in the country as factors that increased the risk of flight. The court expressed concerns that Warriner, if released on bail, could potentially escape abroad, making extradition proceedings challenging.
The denial of bail aligns with the court’s commitment to safeguard the interests of justice and protect the public from potential harm. Warriner’s next court appearance is scheduled for March 20, 2024, reflecting the gravity of the charges and the thoroughness required in the ongoing investigation into one of South Africa’s largest Ponzi schemes.
Edited Excerpts from Craig Warriners cross examination
Craig Warriner on how the Ponzi scheme worked
Craig Warriner: Funds come in. They go to the broker so we trade the funds with the broker. They come back in so that 3.1 billion can be coming from the brokerage and from the clients, the FSCA said to me that’s it’s about 1.2 billion not 3 billion but that’s a turnover situation so it’s clients funds coming in, going to the brokerage to trade, going back from the broker and back into the bank account so the 3.1 billion might be the turnover so it’s not actual client funds.
On the misconception that he has vast resources; and the Barnard family
Craig Warriner: I’ve got 17,000 in my current accounts. I think I might have about 20,000 in my credit card. I have no assets hence the reason why, my ex-wife is trying to help me with bail because I can’t afford it. And I do not have vast resources before I had a very good lifestyle out of what I did. earned the interest which I was allowed to earn, and the interest as per the application form of all the applicants that came to me. And it also said it was unregulated. It wasn’t covered by any law. and it said you could lose all your money and there was no benching money at all. And there was one client, The Barnard family, that made R43 million rand out of this scheme and in terms of the people that say that they would be devastated. I’m not saying no one’s been devastated but it was a high net wealthy individual that came.
On if he has resources abroad and if he can afford to forfeit anything given his current situation
Craig Warriner: My ex wife has an Absa account in Mauritius and I think there may be about 600,000 maybe but I have nothing. The reason why my ex-wife is bailing me out is because my wife is having a nervous breakdown because of the way I carried on. And I feel terrible about it.
On the evidence and where it can be found
Craig Warriner: I can’t access the evidence while I’m in Sun City. The evidence will come from my server, that is in Thailand. It’s an administration guy who I used to employ. and that server is where it’s located. That is something I have undertaken to the FSCA and to the liquidators and to SARS that I’m going to try and get that server through to them plus to the prosecution as well. but there’s a sensitivity there because I think that Caddy may try if let’s say the CA or the prosecutor goes and tries to get it from him, he might curl up and maybe even destroy it.
- BHI PONZI: Investors fume over losses from Global & Local’s “expert advice”
- BHI Ponzi: The Global & Local signs come down
- South Africa’s “Bernie Madoff” faces second bail hearing amidst BHI ponzi scandal