Two stockbrokers accused of defrauding 100 people of more than R22m pleaded not guilty in the Specialised Commercial Crimes Court in Gqeberha on Monday.
Michael Rathbone, 31, and Leon Lewitton, 29, dressed in matching grey and purple, appeared before magistrate Nolitha Bara.
The charges they face include 163 counts of fraud as well as falsely claiming to be registered financial service providers and using the proceeds acquired for unlawful activity.
As co-directors of Helping Hand Invest in Newton Park, Rathbone and Lewitton are accused of acquiring investments under false pretences between May 2017 and August 2019 and splurging the proceeds on holidays, gambling and to paying off debt.
Presenting the state’s charge sheet, prosecutor Clint Jacobs included a list of the duped investors and the money they had allegedly deposited with Helping Hand Invest amounting to R22,680,172.
He told the court the two men had indicated to their clients that their investments would be divided over long- and short-term portfolios.
“One third of the investment would be transferred to a full platform over a 10-year period, attracting guaranteed interest of between 15% and 45% per annum.
“Two thirds of the investment would be accessible within a three- to five-day payout frame and would attract guaranteed interest of 15% per annum.”
Jacobs said the accused’s strategy was that they would generate income from this capital investment by buying and selling property and second-hand cars or financing loans.
“The accused would furthermore furnish all written agreements entered into between themselves and the investors to their attorney, who was instructed to open a ... trust wherein the capital investment and all interest which accrued during the period of investment would be paid.”
He said the situation was very different in reality.
“The accused knew the investments were not invested as portrayed and that the business was not financially strong or successful.
“They knew they were not in a position to commit themselves to the payment of predetermined annual interest rates of 15-45% and they knew that Helping Hand Invest did not generate any profits.
“They knew that they depended on the deposits of new investments to pay other investors capital and/ or interest withdrawals as well as operating expenses.”
The men furthermore did not instruct their attorney to open a trust as they had committed to do.
Jacobs said Rathbone and Lewitton were alternatively guilty of 163 counts of theft in terms of which they “in the execution of a common purpose unlawfully and intentionally stole from the [investors]”.
He said in terms of the final charge under the Prevention of Organised Crime Act, the two men had deliberately concealed what they were doing.
“They knew or ought reasonably to have known that R22,680,172 was transferred to the bank accounts ... associated with the accused ... and that they formed part of the proceeds of unlawful activities.
“They engaged in transactions which had the effect of concealing the nature or movement of this property.”
Rathbone and Lewitton, who are represented by attorney Alwyn Griebenow, are out on R50,000 bail each.
The case continues.
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