BHI Ponzi: A “Nest of Criminality” & fears that missing money could have left SA – with Magnus Heystek

Fears are growing that some of the missing billions from South Africa’s latest Ponzi scheme could have been sent out of the country. BizNews has been receiving information on off-shore companies linked to the BHI Trust of Craig Warriner. There also appears to be network of at least 11 special purpose vehicles and entities, made up of companies local and offshore – that enabled and benefitted massively from the BHI Fund. The network of entities uncovered so far numbers 16. In this interview with independent financial advisor Magnus Heystek, he says: “…the suspicion is very strong that most of this money is either dissipated on Ferraris and aircraft and has left the country.” Heystek details the huge obstacles that could create for investors who hope to get their money back. He also warns that Ponzi-like schemes land on his desk almost “on a monthly basis”, and urges investors to review their investments without delay and to walk away from unregulated schemes. – Chris Steyn

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Relevant timestamps from the interview

  • 00:00 – Introductions
  • 00:24 – Latest on the BHI Ponzi
  • 02:11 – Magnus Heystek on Craig Warriner’s possible co-conspirators
  • 04:21 – On the chance of BHI investors getting any money back
  • 06:18 – On Global & Local’s Michael Haldane
  • 08:11 – On investing in Ponzi schemes
  • 11:04 – How often Heystek comes across schemes similar to the BHI Trust
  • 13:18 – Advice to investors
  • 14:44 – Concludes

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Highlights from the interview

Fears are growing that some of the missing billions from South Africa’s latest Ponzi scheme could have been sent out of the country.

BizNews has been receiving information on off-shore companies linked to the BHI Trust of Craig Warriner.

There also appears to be network of at least 11 special purpose vehicles and entities, made up of companies local and offshore – that enabled and benefitted massively from the BHI Fund. The network of entities uncovered so far numbers 16.

In this interview with independent financial advisor Magnus Heystek, he says: “…the suspicion is very strong that most of this money is either dissipated on Ferraris and aircraft and has left the country. 

“So I wouldn’t be surprised if they really dig down to find out a lot of this money has left the country over a period of time and it’s just stashed away in trusts in funny parts of the world. 

“So there’s significantly more to the story than just another scam…there’s many more things that are gonna come out of my view.”

Asked what it would mean for investors if their money had been taken off-shore, Heystek says: “…locating the money is one thing, proving that it is the proceeds of crime is another thing. And now you’re talking or dealing with international jurisdictions, which is immensely expensive, immensely time consuming. 

“And we’re probably looking at a five- to 10-year period of time before you actually can go through the whole legal process in South Africa, prove that the money was stolen, prove that it left the country, prove that it landed in offshore jurisdictions, because technically that money, if it is, let’s assume that it is in various trusts around the world, is in a trust, and the trustees of that trust need to decide whether they’re gonna repay the money or not. They might take a different view and say, well, unless you’ve got legal proof in the court, in our area, our jurisdiction, we’re not gonna pay the money back.

“…that is the…trickle-down effect of these things. It takes so much money and time and effort to try and find the money. 

“So, in Afrikaans, they call it a katnes (cat’s nest) of criminality…We all know what that is. It’s just a nest of criminality perpetrated over time, almost 20 years.”

Meanwhile Heystek warns that Ponzi-like schemes land on his desk almost “on a monthly basis”.

He urges investors to review their investments without delay: “First of all, check if it’s regulated. Check with the FSCA  (Financial Sector Conduct Authority) if the advisor is regulated and or the fund that they’re invested in is regulated.  And if you don’t know how to do that, go and pay a professional, go to a financial advisor and say, here’s money for your time, two hours, three hours, please check this out for me and come back with a report. It’s simple, but people don’t want to do that.They don’t want to pay for it. They want everything for free. And then they lose their money.”

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