More than 2000 may have been scammed in R3bn Ponzi scheme – report

As authorities continue to uncover the real cost of a massive alleged Ponzi scheme, investigations claim it may have affected more than 2 000 clients and amounted to more than R3 billion.

Moneyweb recently reported trustee and fund manager of the BHI Trust Craig Warriner handed himself over to police, admitting to fraud. He appeared in the Palm Ridge Magistrates Court south of Johannesburg and was remanded in custody.

While investigations continue, City Press said investors had done their own investigations and believed the cost of the fraud reached into the billions.

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“This has punched the guts out of many families,” one investor told the paper.

Using Peter’s money to pay Paul

Warriner reportedly suffered a big loss in the 2008 recession and had “been attempting to trade the available funds of the trust in such a manner as to trade the trust back to a position of liquidity”.

In this process of using “the funds of Peter to pay Paul”, he made more losses he could not recover from, said Moneyweb.

Reacting to the case, financial educator at Just One Lap Simon Brown told Cape Talk there were red flags for investors.

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“There’s not a lot of insight into it at this point, but it was just managing third party money. The dividends suddenly stopping should have been, if not a first red flag, certainly a red flag… this had been a dividend-paying entity.”

Daily Maverick said its enquiries to the BHI Trust were referred to the lawyers who intend to apply for the fund to be liquidated.