Libertas GH: Where are the crypto millions?
· Citizen
An alleged crypto investment scheme linked to Mauritius-born Ahmad Yasin Hossenbocus that may have swallowed as much as R1.2 billion is facing mounting scrutiny after a former business rescue practitioner resigned, citing lack of evidence of available funding.
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Forensic investigators and investors continue to question what became of the money entrusted to Libertas GH.
Investor concerns continue to grow
The company, which is now under business rescue, has attracted growing attention from investors, who claim consideration payments stopped after years of being told their funds were being deployed in various investment opportunities.
While allegations range from regulatory breaches to claims the operation bore the hallmarks of a Ponzi scheme, Libertas GH and its legal representatives have denied any wrongdoing and insist there are underlying assets and a viable path forward through the business rescue process.
Among those raising concerns is IRS Forensic Investigations’ Chad Thomas, whose firm represents several investors. According to Thomas, the explanations provided to investors evolved significantly over time.
Thomas said investors initially believed their money was being used in a cryptocurrency mining venture involving a Serbian partner operating in Bosnia. When questions arose about payments, investors were allegedly told funds had been tied up elsewhere.
“The latest is that the money is tied up in a local plastic-to-diesel manufacturing plant, but funds meant to be made available to pay out investors are tied up in a transaction in Europe,” he said.
Thomas also claimed the figures involved may be substantially larger than initially disclosed. He said that Hossenbocus previously referred to Libertas raising approximately R120 million involving around 200 investors.
However, he said his investigation suggested the exposure could be significantly higher. “There was a group of investors in Pietermaritzburg that contributed a significant amount of money. We’ve subsequently heard from others abroad, including Dubai, pensioners and other investors.
“The amount could be closer to the R600 million to R800 million mark,” he said.
He questioned whether the investment model complied with South Africa’s financial regulatory framework.
“If you’re giving financial advice and you’re investing third-parties’ money on their behalf, you have to be registered in terms of the Financial Advisory and Intermediary Services Act. Worse still, the Bank Act says if I take a deposit from somebody as an investment and I pay them returns on that, I’m performing the functions of a bank,” Thomas said.
He said regulators should closely examine the structure of the operation and determine whether all necessary approvals were in place.
‘Where is the money?’
Adding weight to concerns is the resignation of former business rescue practitioner Danie van Jaarsveld. Van Jaarsveld said he met Hossenbocus and was given explanations regarding the company’s cryptocurrency operations.
He said evidence was presented to show mining activities existed, but questions remained about the value behind them and whether those assets aligned with the scale of investor funds involved.
“A tremendous amount of money came in. The question is: where is the money? He said it was there, but I could not see the value,” Van Jaarsveld said.
The business rescue practitioner’s concerns were repeated in a resignation letter, seen by The Citizen. Van Jaarsveld wrote that the matter involved “various specialised cryptocurrency-related platforms, crypto trading structures and associated technical considerations”, in respect of which his experience was limited.
More significantly, he recorded that “material differences” had emerged between himself and the director regarding the affairs of the company and the manner in which the rescue should proceed.
He noted that he had “not been provided with sufficient evidence confirming the availability of funding required to support the ongoing business rescue proceedings and the investigations contemplated therein”.
Company rejects Ponzi scheme allegations
Despite those concerns, Libertas GH’s consulting attorney, Paresh Pursooth, dismissed allegations against the company and rejected claims that it operated as a Ponzi scheme.
“I will say emphatically that the unsubstantiated and foolish notion that the entity is running a Ponzi scheme is dispelled in its entirety.”
According to Pursooth, the acceptance of the appointment by business rescue practitioners demonstrates there is a basis for the rescue process to proceed.
“Upon the evidence given to them, they voluntarily came on board and accepted the appointment.” Pursooth was equally dismissive of criticism directed at the company. We have idiots like Thomas from IRS Investigative Services and social media.
“It’s empty vessels [that] make the most noise. Fundamentally, we know what to do and we are working within the confines of the Companies Act,” he said.
The consulting attorney also disputed suggestions that investors were being paid interest because the fundamentals of the scheme were Islamic.
“Interest in Islam is forbidden. If any of the investors are under the belief that they’re deriving interest, they need to be questioned from an ethical and moral standpoint,” Pursooth said.
He maintained that critics misunderstood the structure of the investment arrangements and compared the company’s activities to conventional investment portfolios.
Unanswered questions
The Citizen attempted to obtain comment from the newly appointed business rescue practitioner, Thomas Samons. E-mail questions were sent and telephone calls made to the number provided to this publication but, by the time of publication, no response had been received.
Detailed questions were also sent to Hossenbocus via WhatsApp after his cellphone number was confirmed through multiple independent sources.
He was asked how much money is owed to investors, how many investors are affected, whether documentary proof exists showing where investor funds were deployed, what licences or regulatory approvals Libertas held while accepting money from members of the public, why the previous business rescue practitioner withdrew, what assets currently exist that can be used to repay investors and whether he would support an independent forensic audit of the company’s affairs.
He was also asked to state if any investor funds had been used to pay returns to earlier investors. He had not responded by the time of publication.
Red flags investors should watch out forThe US Securities and Exchange Commission (www.investor.org) warns investors to protect their investments by watching out for these red flags:
- Unlicensed investment professionals;
- Aggressive sellers who may provide exaggerated or false credentials;
- Offers that sound “too good to be true”;
- ‘Risk-free’ investment opportunities;
- Promises of great wealth and guaranteed returns;
- ‘Everyone is buying it’ pitches; ɳ Pressure to invest right now;
- Over-the-top, sensational pitches that may have fake testimonials;
- Unsolicited pitches seeking to obtain your personal information; and
- Being asked to pay for investments by credit card, gift card, or wiring money abroad or to a personal account.
- Ask questions;
- Research every investment opportunity thoroughly before you invest; and
- Conduct a background check on any investment professional.