A Namibian man who allegedly operated a Ponzi scheme and defrauded 79 persons of N$4.3 million made a first appearance in the Windhoek High Court yesterday.
Sakaria Megamano Namwandi and his close corporation Asset Legacy Investment is facing 123 charges of fraud, one count of money laundering, one count of racketeering, one count of conducting banking business while not authorised and one count of conducting a Ponzi scheme. In addition, he is charged with two counts of tax evasion and two counts of failure to pay tax.
State advocate Constance Moyo informed Deputy Judge President Hosea Angula that she handed the discovery to his legal aid instructed lawyer Joseph Andreas who confirmed receipt.
The matter was then postponed to 21 July, for Andreas to complete the State’s pre-trial memorandum and file it. A pre-trial memorandum is where an accused indicates what he will dispute and what he will not. It is alleged by the State that Namwandi was the sole member of Asset Legacy Investment CC and had the duty to conduct legitimate business on behalf of the entity and facilitate reception of legitimate business funds held at various banks.
He however, the State alleges, whilst making use of the corporate entity in a fraudulent enterprise, formulated and operated a Ponzi scheme in which he, through the entity, advertised two types of investment facilities to members of the public, through face-to-face interactions and social media platforms under the guise that the invested funds would be traded on foreign exchange platforms with a return of 50% within 30 days.
The fraud charges relate to Namwandi and his entity pretending to his various investors that they were running a legitimate business, authorised to receive investments from members of the public while they knew they had no lawful authority to conduct banking business and thus were not authorised to receive any deposits or investments from members of the public. With regards to the charge of money laundering, it is alleged by the State that the accused used the ill-gotten funds to purchase a Mercedes-Benz vehicle for personal use and that he used part of the funds received from investors to settle rentals for a leased residential property that was also used as an office. In relation to the charge of racketeering, it is alleged that during the period from June 2019 to October 2019, the accused acting in connivance with one another in a partnership contrived to facilitate the receipt of illegal deposits and transfers of funds fraudulently obtained from investors. The conducting of banking business without authorisation relates to the accused during the period June 2019 and October 2019 having conducted banking business without authorisation by receiving, accepting or taking regular deposits from members of the public in contravention of the Banking Institutions Act.
The charge of conducting a Ponzi scheme relates to the accused during the same period having unlawfully became involved in the conduct of an undesirable practice by accepting or obtaining money, directly or indirectly, and paying pervious investors with funds invested by new members.
The tax evasion and failure to pay tax charges are that, having registered as a tax payer, Namwandi falsely declared to the finance ministry that he had no taxable income for the years 2020 to 2021 while in actual fact he had N$3.1 million in various bank accounts and failed to pay tax in the amount of N$1 million.