A pastor accused of running an alleged R550 million ponzi scheme has been arrested.
Colin Davids made a brief appearance at the Bellville Magistrates’ Court on charges of fraud yesterday morning after handing himself over to police .
The New Direction Grace Ministries pastor was released on R100 000 bail after the state indicated they would not be opposing bail.
The 48-year-old made headlines in July last year when the Asset and Forfeiture Unit obtained a preservation order against him at the Western Cape High Court and seized R138 million worth of assets from his company, Platinum Forex Group.
These assets include his multi-million rand home in Plattekloof and expensive cars.
According to prosecutors in this civil matter, an amount of R550 million went into the business’ bank account over a period of a year, but when a curator checked, only R1.6 million was left, with no explanation as to where the rest was.
The curator also later found that between February and June 2015, R1.5 million was transferred from Platinum Forex Group’s bank account into Davids’ personal account in 18 transactions.
Upon checking his personal account though, only R76 000 remained.
Yesterday it emerged the Plattekloof man faces charges of fraud, and being in contravention of the Financial Advisory and Intermediary Services Act [FAIS], as he was allegedly not licensed to operate.
He also faces a charge of being in contravention of the Banks Act, for accepting deposits when he was not allowed to.
It’s alleged that through this company, Davids defrauded about 2 000 clients, many of whom are church members and retirees.
State Prosecutor Advocate Jannie Knipe told the court the matter was a schedule five offence.
But his lawyer Leon van der Merwe said: “My client is charged with fraud and disputes the charges against him.”
Davids, who denies all the charges, stood calmly before Magistrate R Rickets who postponed the matter to January 18 next year for further investigation.
Outside court, a woman who claimed to have been a “silent investor” in Platinum Forex Group vehemently denied claims that the pastor was running a ponzi scheme.
She claims mense have been giving the pastor their money out of their own free will for him to “grow it”.
“He has not been borrowing money to anyone, people borrow him money and asked him to turn it around and that’s what he did, he has all his documents in order,” says the woman who did not want to give her name or have her photo taken.
“What brought this case on was that one of his staff members was caught stealing and he threatened to lay criminal charges but then changed his mind and then went to the state to try and spite the pastor.
“There was never a scenario where he did not get our funds paid to us, we always got our funds and when the accounts were frozen, he was not in a financial position to help anyone, so a lot of families are suffering right now.
“He had shown us when the state froze his accounts there was enough money to pay back all the investors, including interest, so I don’t know where these charges come from.
“He is registered with all the necessary entities, it is not a ponzi scam. This is just a witchhunt against him.”
The Hawks are asking victims of the alleged scam to come forward and contact the case’s Investigating Officer Jerome Hardenberg on 021 918 3354 or email [email protected]
The case against Reverend
National Prosecuting Authority (NPA) spokesperson Eric Ntabazalila says according to court papers:
- Instead of investing the monies he collected, Pastor Colin Davids used some of the funds for his own benefit, including: two multi-million rand homes in Plattekloof and Hermanus; cars for his wife, Charlyn Anthea Davids; and household expenses from stores such as Woolworths, Checkers and Pick n Pay.
- Platinum Forex is not a public company that is lawfully allowed to provide financial services in terms of the Financial Advisory and Intermediary Services Act, or to conduct business of a bank in terms of the Banks’ Act.
- It is also alleged the company made false promises to members of the public, saying that their so-called investments would yield interest returns of between 48 percent and 84 percent.
- On its Facebook page, Platinum Forex boasts it can “turn R3 million into R30 million in 30 days”.
- It is suspected that the company used some of the funds received from investors to pay other members.