Three Eastern Cape accused charged with running R1.2m pyramid scheme

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The Hawks have arrested more senior government officials who are allegedly linked to fraudulent activities.
The Hawks have arrested more senior government officials who are allegedly linked to fraudulent activities.
Tiro Ramatlhatse, Gallo Images, Sowetan
  • Three Eastern Cape men are being charged with fraud.
  • They allegedly ran a pyramid scheme that brought them R1.2 million.
  • The victims were allegedly sold shares in a company, but were never paid their interest.

EDITOR'S NOTE: This story has been edited to reflect that Masixole Madikane and Ludumo Nkungwini are not directors of BLB Investments CC, as initially stated by the Hawks in a press statement.

Three men have appeared in court for allegedly running a pyramid scheme, through which they allegedly made off with R1.2 million.  

Ludumo Nkungwini, 34, Bonke Dayizana, 35, and Masixole Madikane, 31, appeared in the East London Magistrate’s Court on Wednesday, where they were released on a warning.

The charge sheet lists a fourth accused, Lulama Sicam. It further adds that Dayizana and Sicam are "members" of BLB Investments CC, the company at the centre of the investigation.

Madikane and Nkungwini are noted as being "employed" by the company to "market the investment portfolio of BLB CC".

The Hawks had initially said Madikane and Nkungwini were directors along with Dayizana.

Hawks spokesperson Captain Yolisa Mgolodela said the three men were arrested on the same day by the East London Serious Commercial Crime Investigation team of the Hawks on charges of fraud.

"During 2013, Nkungwini, Dayizana and Madikane ... are alleged to have lured victims to invest in the company and to expect a 7.5% interest each month," said Mgolodela.

READ | Western Cape man to appear in court over R3.1 million pyramid scheme

"It is further reported that there was a contract agreement signed by the victims with the [accused] for the above percentage to be received on a monthly basis on invested funds. The [accused] according to the victims never lived up to the agreement. The [accused] ultimately disappeared with the victims’ monies."

The victims lodged complaints, which were investigated by the Hawks, and culminated in the arrests on Wednesday.

"The investigations revealed that the company was not a registered service provider, according to the Financial Stability Board, and that BLB was a pyramid scheme. The scheme prejudiced the victims' cash to the value of more than R1.2 million," said Mgolodela.

The matter has been set for 7 December, 2021 to allow further investigation.

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