Missing millions, the 'lying' Mr Levick & the artwork

2019-05-12 09:00
Martin Levick, the former CEO of investment house Genesis Capital, is facing criminal and civil legal action amidst allegations of fraud. (Supplied)

Martin Levick, the former CEO of investment house Genesis Capital, is facing criminal and civil legal action amidst allegations of fraud. (Supplied)

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Martin Levick, the former CEO of investment house Genesis Capital, has been provisionally sequestrated and is facing criminal and civil legal action amidst allegations of fraud.

Levick, who was known as an innovator and deal-maker in the Johannesburg business community, has been removed as a director and chief executive of the group of companies his father Selwyn originally started decades ago, and which he joined in 1999.

A sequestration application was heard in the Gauteng High Court in Johannesburg on April 23, and a provisional order was granted with a return date for a final order in June.

As Levick’s empire has come tumbling down around him, trustees have been appointed to oversee his estate. Levick, who has homes in Houghton and on Clifton beach in Cape Town, and who until recently drove an expensive Aston Martin, has already been visited by the sheriff.

Numerous creditors have come forward claiming that Levick owes them tens of millions of rands through his "desperate and dishonest conduct", "trickery" and "fraudulent" behaviour. Some affected suggest the total amount that will be claimed will be in excess of R1.5bn.

Levick denies defrauding any creditors.

The Hawks have confirmed that two separate criminal cases are being investigated by the Johannesburg Commercial Crime and Serious Economic Crime Unit. Levick has given a warning statement to the investigators in one case.

How the debt kept piling up

From court papers and multiple interviews with business partners, creditors and lawyers over the past month, a picture has emerged of a wheeling and dealing businessman who got into trouble by allegedly borrowing from Peter to pay Paul.

As a director and significant shareholder in both Genesis Capital (Pty) Ltd and Genesis Capital Partners, Levick was perfectly placed in the business elite to convince those with money to invest with him. He claimed to be worth R1.3bn, with assets in his name and money in offshore bank accounts.

But towards the latter part of 2018, a number of individuals, who had long business and personal relationships with Levick, began calling in their loans or their investments. Levick negotiated payment agreements with many of them, but in most cases the payments were allegedly not made as promised. The creditors claim that what followed was a series of alleged incidents of fraud committed to pay off preferred individuals.

This culminated in a sequestration application brought by Rael Segal and Segal Super (Pty) Ltd on a semi-urgent basis. The applicants claimed $29m from Levick, in his personal capacity.

Three additional intervening creditors joined the legal action. These included:

 - Two entities, Chester Holdings Limited and Illovo Limited, represented by former Brait-CEO Anthony Ball claiming a total of $7.5m

 - Christopher Brand claiming R57m and $13m (totally approximately R240m)

 - AMB Capital represented by Chris Vosloo claiming €3m

Ultimately, only the Chester/Illovo application, brought by Fluxmans Inc, was successful on technical reasons. Fluxman’s Saul Shoot confirmed that Levick did not oppose their application.

The brazen Banksy scam

In a lengthy affidavit, businessman Anthony Ball details through emails and text messages with Levick, how he allegedly attempted to pull off a sensational "fraud" involving an artwork by famous English street artist, Banksy.

Banksy art work

Banksy art work. (Supplied)

Ball has confirmed that he knew Levick for a number of years, during which time Levick had presented a number of business opportunities to him.

In July 2018, Levick approached Ball and asked him for a loan of R30m. The loan agreement was signed between 'Illovo' and Genesis UK, the UK arm of Genesis Capital. Levick bound himself as a personal guarantor for Genesis UK.

Ball alleges that the documents which Levick used in this first deal, to give the impression that he was a duly authorised representative of Genesis UK, were used in "carrying out the elaborate theft of the stolen funds under false pretences".

Central to this was a letter from Catherine Hewett of Fourways auditing firm Thort Chartered Accountants. In it, Hewett writes that "this letter serves to confirm that Martin Levick has always shown a high degree of integrity, judgement and responsibility… He is a captain of industry and has been in business for many successful years".

She goes on to say, "I confirm based on the information received by ourselves that Martin Levick assets amount to R1 296 930 000".

On the basis of this letter, Ball thought Levick was good for the money. The letter also contained an attached schedule, listing Levick’s assets and bank accounts locally and abroad. However, it has since emerged that neither his home in Cape Town, valued at R180m, or in Houghton, valued at R30m, are registered in his name.

News24 attempted to contact Hewett. Her attorney Kim Warren sent a statement in response: "As discussed, our client confirms that she prepared the letter of 22 October 2018 in which she confirmed that according to the information at her disposal, Levick’s assets amounted to R1 296 930,00. No schedule was attached to client’s letter and particularly the schedule purportedly attached to the letter headed 'assets and liabilities as at 30 September 2018' was not prepared by our client. As discussed with you, client’s letter of 22 October 2018 refers to Levick’s assets (it does not take into account his liabilities) and not to his net asset value. Our client cannot advise who prepared the schedule. She can only confirm that such schedule was not utilised by her in her letter of 22 October 2018."

Then in September, Glenhazel actuary Maon Jacobson, who is also an avid art collector, told Levick that he was planning on buying a 2006 Banksy artwork called Grannies at a price of £1m. In November 2018, Levick promised to lend Jacobson the money on the basis that Levick's "trustees" required due diligence on the artwork before advancing funds.

"Mr Levick abused this information as a platform to spin a tale and steal Illovo’s funds under false pretences," argues Ball.

Towards the end of 2018, Levick presented a business opportunity to Ball. He would lend Jacobson the money to buy Grannies and Levick would sell it on to his "friend", billionaire Natie Kirsh’s daughter Wendy, at a substantial profit. He would buy the artwork for $3.5m and sell it to Kirsh for $10.5m, and they would split the profit 50/50.

If Ball was to procure the $3.5m and advance it to Genesis UK for the specific purpose of purchasing the artwork, funds would be made available to Jacobson to buy it.

On November 24, Levick sent a message to Ball: "I have a game changer even in Naties (sic) world … I am so excited to tell you!!!".

Ball asked Levick whether it was ethically correct for him to profit from a business opportunity out of a deal with his supposed friend, who he had a close relationship with. He says Levick told him that Kirsh was comfortable with the arrangement and even allegedly suggested to Levick to use the profits to purchase an apartment next to his in Trump Towers in New York.

It is unclear if Natie Kirsh or his daughter Wendy were ever interested in buying the artwork or even aware of the deal.

But according to Ball, "the entire Supposed Art Work Business Opportunity was a fraudulent fiction created by Mr Levick" and use of the documents for the initial loan "was merely one of the many elaborate components of the fraud perpetrated by him".

Levick procured a letter from Pest Control Handling Services, the management company for Banksy, under false pretences that he intended lending money to Jacobson to buy the artwork.

"This was all simply part of Mr Levick’s trickery…Mr Levick had created the false impression that Genesis UK would be purchasing the artwork and selling it for a profit, all of which was untrue," says Ball.

On December 4, 2018, Illovo paid $3.5m to Genesis UK, to fund the "Supposed Art Work Deal". What Anthony Ball and his trustees didn’t know at the time, which they subsequently found out, was that the money never went to Maon Jacobson to pay for the Grannies artwork. Instead, it was allegedly funnelled off into the account of another Levick creditor, Warren Friedland.

An SMS exchange contained in the court papers, between Levick and Genesis UK MD Lewis Bloch on December 5, shows the desperation to get the money into Friedland’s account:

Martin 14.14: It has to reflect in Warrens (sic) acc today or I stand to loose (sic) a fortune.

Martin 16.25: Oy I need to do the transfer to Warren today – if I fail, I loose (sic) $17m. So concerned.

Lewis 16.47: I am busy speak to them again. I’m on hold while they are trying to sort out. 5th cup of coffee. I won’t sleep for the next week.

Martin 16.50: I’m so sorry Lew and so stressed.

In an email in the court papers, Genesis UK’s attorneys told Ball’s UK lawyers that Genesis UK had nothing to do with the deal.

"It appears that your client has been defrauded by Martin Levick, director and shareholder of Genesis Capital (Pty) Ltd South Africa," the email read.

In reality, what happened was that Jacobson purchased the artwork on December 9, and did not receive any funds from Levick. But for more than three months, Levick "unlawfully, intentionally and under false pretences" continued to "mendaciously perpetuate the fraud" by continuing with the "charade". Ball's affidavit details multiple examples of this.

In early April, Levick agreed to a repayment plan but Ball’s entities never received any money from him.

"Mr Levick’s modus operandi … is transparently to obfuscate, delay and mendaciously dishonour his payment obligations to his creditors, as well as to prefer those creditors who place him under the most pressure thereby preferring them over his other creditors," explains Ball.

"Mr Levick will have no hesitation in repeating his dishonest pattern of theft and fraud and of preferring some of his creditors and prejudicing others. Mr Levick will self-evidently devise further unlawful schemes in order to avoid being held to account to his general body of creditors. Mr Levick is under considerable financial pressure from his creditors and has made and continues to make promises to repay creditors which he then repeatedly breaches," Ball adds.

In the court papers, it is alleged that Levick was placed "under pressure" by Friedland in particular, a property investor who now lives in Miami. It’s claimed that Friedland was the source of "threats" against Levick and his family to the point that he hired bodyguards.

However, Friedland insists this is far from the truth.

"I vehemently deny that Martin was ever threatened. To the contrary, we remain on relatively good terms despite what he has done," he told News24 at a meeting this week. Recent WhatsApp messages between Friedland and Levick also demonstrate the cordial relationship between the two.

Fake swift payments and banker's 'balls up'

The affidavits of other creditors involved, demonstrate how long-standing personal relationships between them and Levick turned sour over the past few months.

Christopher Brand, who has known Levick for over 20 years as his 'wealth manager', claims Levick misrepresented the value of his shares in Genesis Capital Partners. After Brand negotiated a repayment plan with Levick, he believes Levick even falsified a payment confirmation to him.

"I believe that the Respondent’s confirmation of payment that he sent to me on 8 February 2019 was falsified by the Respondent who merely copied, pasted and edited a previous legitimate payment confirmation to create the impression, on which I relied, that he had made payment to me."

The payment was never received.

Similarly, Chris Vosloo on behalf of AMB Capital, alleges that Levick made a number of "false representations to me in regard to payment".

On September 17, Levick attempted to explain a late payment with a message reading: "Guys, There was a genuine balls up from my banker and trustees which I will explain but the funds will reflects (sic) very shortly."

The funds never reflected.

Levick denies 'defrauding creditors'

News24 attempted several times to interview Martin Levick. He did answer calls and respond to messages, but did not agree to an interview.

In a letter from his lawyer, Marco Martini, he also declined an opportunity to give his version of events.

"Your questions appear to relate, directly or indirectly, to allegations made in the civil proceedings and possibly to the Hawks investigation which you appear to have knowledge of. Since the matters are sub judice, you will appreciate that in such circumstances, our client has been advised not to make any statements or answer any questions. You do recognise our client’s constitutional rights in this regard. In view thereof, our client will not answer your questions nor afford you the interview you seek," wrote Martini.

"Notwithstanding the aforegoing, our client denies that he has intentionally defrauded creditors as alleged by your or otherwise," the letter further stated.

Martini also issued a veiled warning, that allegations contained in the sequestration application were "defamatory" against Levick.

"Finally, as advised telephonically, some of the applications before the Court contain defamatory allegations (which you as an experienced reporter have no doubt read and understood) and should you publish your article incorporating such defamatory allegations, you will merely be aggravating the defamation and possibly making yourself a party thereto. You are once again advised to proceed with caution."

Martini has confirmed that his client has made a warning statement to the Hawks and has offered to surrender himself to the authorities should they decide to prosecute him.

Genesis Capital distances itself

Genesis Capital MD Stan Melnick says immediately after they were alerted to the situation, the company "acted swiftly to secure Mr Levick’s resignation as a director and CEO of Genesis Capital (Pty) Ltd and thereafter his suspension as an employee".

It then instituted a disciplinary process against him which led to his resignation.

"Insofar as Genesis Capital (Pty) Ltd and its subsidiaries are concerned, including Genesis Capital UK, Mr. Levick has no current relationship with them other than a minority shareholding in and indebtedness to Genesis Capital (Pty) Ltd. As regards to Genesis Capital Partners (Pty) Limited, his relationship is limited to a minority shareholding," says Melnick.

He insists that the sequestration applications are against Levick in his personal capacity and should not reflect negatively on Genesis Capital’s corporate governance. Also, no clients' money was ever in jeopardy, he says.

"At no point in time is Genesis Capital (Pty) Ltd or its subsidiaries custodians of clients' money and all client funds are paid directly to the relevant third-party product providers. Genesis Capital (Pty) Ltd is a holding company for a number of businesses that have for many years successfully acted as intermediaries in the financial services industry.

"These businesses have been built on a strong ethics and compliance foundation to protect the interests of our clients who can be assured of our current and ongoing commitment to the principles of good corporate governance. All of these businesses are regulated by the FSCA and led by specialist teams who are experts in their fields."

Melnick says the company is considering its legal options and will await the outcome of the sequestration proceedings before taking a decision on any action against Levick.

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Read more on:    genesis capital  |  hawks  |  martin levick  |  fraud  |  crime
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