BHI Ponzi: The “biggest heist” ever from a Ponzi collapse?

Veteran fraud investigator Bart Henderson predicts the BHI Ponzi scandal in South Africa could be the biggest heist yet, with evidence suggesting losses far surpass reported figures.

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By Chris Steyn

The BHI Ponzi scandal could turn out to be the “biggest heist” yet from the collapse of such a scheme in South Africa.

That is the prediction of veteran fraud investigator Bart Henderson who has been looking in the BHI Trust since the first signs of financial doom for investors.

He says: “BHI may not be the biggest pyramid scheme in our history but I predict, based on what the evidence seems to be suggesting, it may yet prove to be the biggest heist stemming from the collapse of one.”

Henderson’s comments come in the wake of news that claims against the BHI Trust have soared past R1,6-billion.

“The quantum being reported as having been lost by victims is heading in the right direction, but is still nowhere near the true reflection of what’s been lost by investors,” he says.

Henderson describes as “interesting” the difference between what mastermind Craig Warriner confesses to and what the liquidators present. 

“If Warriner under-confessed the quantum by 30% it wouldn’t make sense,” he says.

“On the assumption the quantum provided by the liquidators is increased by 30% due to the complaints under oath and subsequent investigation by them, then one can safely assume the increase can be ascribed to money paid to intermediaries that never managed to reach the Warriner BHI as the public have come to know it at the exact time of its collapse.

“Warriner confessed to 200 investors and R1.1bn or thereabouts. Liquidators claim 800 victims and R1.6bn.”

However, Henderson – who represents many of the victims – says hundreds haven’t reported it.

According to him, the reasons for them not doing so are mainly because:

  1. They have no confidence in the liquidators over concerns about conflict of interest in the process;
  2. Others over time received pay-outs from BHI and fear they may have to pay those back;
  3. Others are pursuing civil remedy through independent class action lawsuits; and
  4. Others with smaller investment losses considered it more appropriate to approach The Office of the Ombud for Financial Services (FAIS Ombud) to submit claims under the R800k threshold. “The Ombud should also indicate the number of claims submitted and how many have been successful. “My information is none. Or virtually none.”

Henderson would place categories a-d numerically as “equivalent at least”, to the number reported by the liquidators. 

“Thus I would suggest the quantum of the BHI fraud is closer to – and probably greater -than the original R3bn reported by the media.”

He adds that recent evidence seems to support this theory with the surfacing of “control accounts”. 

“These accounts seem to demonstrate not only the ‘pooling’ of investor accounts, which serve as a strong indication BHI do appear to have conducted a collective investment scheme, which would in of itself have been illegal. But as importantly, if not more importantly, millions of rands were caught up in financial advisory and related firms, such as Rubicon Trust ‘control accounts’ without reaching BHI, or were paid by BHI to these firms, but not paid out to clients at the time of the BHI collapse.

“With investigation focus since October last year being uni-dimensional, almost exclusively focussed on BHI, these facts have been largely ignored despite best attempts to alert the authorities and the public immediately BHI collapsed.”

And he warns: “With regard to these funds the risk of capital flight has existed, from the outset in the case of financial advisory and related firms, who may have enjoyed a less than ideal business relationship with BHI, to the detriment of investors and beneficiaries of Trusts, Wills and Estates caught up in this debacle.”

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