Episode Transcript
[00:00:00] Speaker A: Eight minutes now before 10 o'. Clock. This conversation on 702 is brought to you by Capitec. Slam scam. With Capitec you must slam that scam.
So investment scams like Morita Forestry have cost South Africans hundreds of millions of rands. I'm sure you've heard of them. You've got criminals using social media, WhatsApp and word of mouth to make the scheme appear legitimate. They're promising rapid guaranteed returns. Morita attracts, in fact, they have attracted thousands of investors before collapsing in July20.
So today we're unpacking how the scam worked, how the money was moved, why it's difficult to recover, and how you as a South African can protect yourself from similar scams.
So we're having this conversation now with Capitec on the line. We've got Nick Harris, who's the head of financial crime at Capitech, and Jean Rosso, who's the head of CSI and financial education at Capitech. Nick and Jean, thank you so much for, for making time for us.
So Nick, let's start with this Morita Forestry scam because it promised huge faster returns from, you know, forestry and carbon credit investments. Talk us through how a scheme like this is set up and dressed up to look credible.
[00:01:20] Speaker B: Yeah, absolutely. Thanks Clement. Yeah, something Marita really promised, something incredible that, you know, you could just turn a few hundred rand into thousands or even hundreds of thousands of rands just by investing allegedly in forestry and carbon credits overseas.
And really that, that did their home. Well, they had a proper company name, they registered an entity.
We even posting photos with local seps officials on social media. And what already sold was word of mouth. So you know, friends, relatives were recommended to, to each other or even influencers on Tik Tok and the like. And that personal touch is really what made people let their guard down.
But the one thing Marita didn't have was a FSCA registration which should have been a big red flag. And also what my mom taught me is that money doesn't grow in trees.
[00:02:07] Speaker A: And, and we've seen media reports, Gene, suggesting more than 500 million rand has moved through the so called money mule accounts into cryptocurrency. What role do money mules play? And, and why does this make it so difficult to trace or even recover the victim's money?
[00:02:27] Speaker C: Yeah, scammers use ordinary people's bank accounts because it lets them behind someone's else's identity.
The money moves through a real person and not through the scammer, which makes it far harder for anyone to trace it back to the scammer. And then from there, the money is often then converted into cryptocurrency, which lets it cross borders instantly with no name attached for anyone to chase it. And by the time the pattern is spotted, it's usually already moved on. So this all happens incredibly quickly, all designed to hide behind ordinary people. And that's why, actually, one of the clearest warning signs there is if an investment product asks you to pay money into an individual's personal account rather than a proper registered business, it's definitely a scam. And it's the ordinary account holder who carries the real risk, not the scammer. So if you let your account be used in this way, you can be implicated in money laundering.
[00:03:23] Speaker A: So what do we do then, Nick? Like, if someone sees an investment opportunity like this on social media, in a WhatsApp group or maybe through a friend, what should they do before parting with any money?
[00:03:36] Speaker B: So really, I mean, I think the first thing is just to pause and ask yourself, you know, if, if money could be made like this, why does everybody not make money? Why is everybody not millionaires or billionaires?
And also really to, to check, you know, is the business registered with the FSCA and can it really offer these products legally in South Africa?
I think the, the broader question for me really is around, you know, just making sure that you must be skeptical of, you know, relying on proof and, and photos or even screenshots of bank accounts receiving money. Right. All these things can be faked.
And, you know, if you see something that looks like it's too good to be true, you know, it's, it's the, the returns are crazy. It will definitely be a scam.
[00:04:20] Speaker A: So if, if someone, Jean, realizes that they've invested in a scam like this, or maybe they've been asked to use their own bank account to move money for someone else to.
What should they do next?
[00:04:33] Speaker C: So firstly, if you realize that you invested in a scam, you should report it to your bank.
Don't think that maybe I've lost already.
The fact is that everyone who reports such a scam to a bank helps us to determine who those scammers are using to cover up their tracks. So while the funds may have already left your account, it may not be recoverable. It is important that you can have the ability to help others. So help the bank to track and trace and then also flag related accounts and then protect other people.
Secondly, if someone has asked you to receive money into your personal account and pass it on, don't you could definitely unknowingly become a money mule, which would then lead to you facing legal consequences for money laundering and stand the risk of having your accounts frozen, suspended, and even criminal charges laid against you. So it's really not worth the while to do this.
[00:05:39] Speaker A: Sure. Yeah. Nick Harris and Jindra. So thank you so much for, for joining us and speaking to us about, really, these scams that, that have terrorized so many South Africans. And thank you as Capitech, for making it your priority to really teach South Africans out there how to protect themselves so that they're not parting with any monies. I really appreciate your time. Nick Harris is the head of financial crime at Capitech. Jin Raso is the head of CSI and financial education at Capitech.
