A KwaZulu-Natal family of three who allegedly used millions in investors’ money to buy luxury cars, properties and five aircraft were released on R50,000 bail each this week in connection with a R75m Ponzi scheme.
The De Beer family in Dundee in northern KZN established the Coin-It investment scheme which, at its peak, distributed millions of rand to investors across the province and various regions of the country.
Malcolm de Beer, 54, along with his wife Patricia, 53, and their daughter Samantha, 31, were arrested on Tuesday, five years after the scheme crashed in 2019, leaving many penniless.
They appeared in the Pietermaritzburg Magistrate’s Court on the same day, charged with fraud, alternatively theft, amounting to R73.6m. They are also accused of contravening the Financial Advisory and Intermediary Services Act, the Banks Act, and engaging in money laundering.
A source revealed that the family was widely known for its lavish lifestyle and heavy security.
“They are well-known for living luxuriously. Whenever a helicopter hovers above, it’s often assumed or known to be them. The majority of people who had close encounters with them were those employed in their warehouses. While we’re aware of the ongoing controversy surrounding them, it remains a sensitive matter as many people suffered significant financial losses through the scheme,” said the source.
He said there had been mixed reactions to the arrests, with some still believing in the family’s innocence and the legitimacy of the scheme, and others determined to reclaim their investments.
One investor who asked not to be named said some investors had opted for early retirement, channelling all their pension funds into Coin-It.
“It’s a hard topic to discuss in a public area because you don’t know if maybe the person next to you lost close to millions. The unfortunate reality is that, despite the scheme’s collapse, the family continues to enjoy a wealthy lifestyle, driving luxury cars. Meanwhile, the investors face daily struggles,” he said.
Investors were promised their money would be used to buy earthmoving equipment, trucks and heavy-duty vehicles to be leased to third parties and the operations would earn them monthly dividends (of up to 10% of their initial investment) for a long time.
While this might have worked for some investors for a while, it was discovered that Coin-It was operating as a pyramid scheme with new investors’ funds used to pay existing investors.
The family allegedly spent the money on properties in Dundee, Hattingspruit and Colenso outside Ladysmith. They allegedly bought a Porsche 911 Turbo, Jeep Grand Cherokee, Trackhawk Grand Cherokee, two Beechcraft Baron 58 light aircraft, two Hawker 700A jet aircraft and a Bell 2006 Long Ranger III helicopter.
Hawks KZN spokesperson Lt-Col Simphiwe Mhlongo said the delay in the arrests was due to the liquidation of the company and Hawks investigations to build a solid case against the family.
KZN’s National Prosecuting Authority spokesperson Natasha Ramkisson-Kara said the Asset Forfeiture Unit (AFU) seized the firm’s assets worth R106m. This includes 11 tracts of land in Dundee, five aircraft and a motor vehicle.
She said once the forfeiture order takes effect, the assets would be handed into the custody and control of the liquidators of Coin-It and the other liquidated entities.
Ramkisson-Kara said Coin-It had placed advertisements on its website and in newspapers calling for people to invest with them.
The matter was postponed to March 19 and would be transferred to the specialised commercial crime court in Durban, she said.
A Durban-based investor told the Sunday Times he had been recruited by someone who had profited from the scheme for about two years.
“He would show me bank messages and receipts proving his earnings. Seeing an opportunity, I decided to invest as well. Around 2018, I invested R110,000 and received approximately R11,000 monthly for over seven months. Devastatingly, it all came crashing down. I hadn’t recouped my initial investment or made a profit. Six years have passed, and my hopes of recovering the money have dwindled.”
He said he had to repay borrowed funds used to supplement his initial investment.
“We were played and we hope the court won’t be lenient with them. It has been a challenging journey, causing severe financial stress. Although it was a difficult period, I had to move forward with my life. Some individuals invested over R400,000, with some even opting for early retirement just to invest their money,” he added.
However a group of investors still believe the scheme was legit and had the liquidators not gotten involved, they would be reaping the rewards to this day.
The group, Isigqeba Movement, has submitted a number of memorandums of demand to the liquidators, Berrangé Incorporated, demanding they release Coin-It documents and assets to enable the scheme to pay them.
Group convenor Mlungisi Thabethe didn’t respond to queries.
