The United Nations Conference on Trade and Development (UNCTAD) said in its Investment Report 2022 published in June that Foreign Direct Investment (FDI) to African nations hit a record $83 billion in 2021.
The Organization for Economic Co-operation and Development (OECD) said that as a key element in international economic integration, FDI helps to “create stable and long-lasting links between economies”.
“FDI is an important channel for the transfer of technology between countries, promotes international trade through access to foreign markets, and can be an important vehicle for economic development,” the organization further said.
However, despite assurances to the contrary, the South African government does not appear to have genuine interest in attracting FDI to the country, going by the horrific treatment two American investors are being subjected to in the rainbow nation.
Prosper Kouassi & Associate
This is the story of an Ivorian American businessman, Prosper Kouassi, who runs a successful company called Prosperity Soul Transportation LLC in the United States and an American associate.
Documents sighted by The Herald in the course of this investigation showed that Kouassi’s firm and that of his associate, who chose to be anonymous for this story but will henceforth be called Company B, parted with $50,000 each to procure seven financial instruments provided by two South African firms which allegedly turned out to be investment scams.
The companies are Mmina Tshipi (Quantum Oil // OR John Issachar Carriers) and Barista’s Coffee Holdings (Pty) Limited.
It was learnt that on August 6, 2021, Company B entered into a ten-year Joint Venture Agreement for the Issuance and Monetizing of a Standby Letter of Credit (SBLC) with a privately-owned company called Mmina Tshipi (Quantum Oil // OR John Issachar Carriers), which is registered with the Department of Energy in South Africa.
Documents sighted by this newspaper showed that Mmina Tshipi (Quantum Oil // OR John Issachar Carriers) is owned by one Olive Rosemary John with South African ID No: 7101270134082, who through a Specific Power of Attorney appointed Johannes Jochemus Jacobs with South African ID No.7509155029088 as the lawful agent of the company.
In the agreement, Mmina Tshipi agreed to contribute / make available to the formal partnership/joint venture certain BRASIL BRAZIL FOMENTO MERCANTIL S.A approved assets while Company B agreed to pay the issuance fees ($50,000.00) as a proportionate contribution towards a Standby Letter of Credit (SBLC), as charged by BRASIL BRAZIL FOMENTO MERCANTIL S.A for the issuance of a Standby Letter of Credit, with face value of 500 million euros which SBLC would be backed by the assets so provided by Mmina Tshipi.
According to the agreement, the SBLC was valid for one year and one day and proceeds would be shared on an agreed percentage between the two parties.
As speculated in the agreement sighted by The Herald, proof of payment of Company B’s $50,000 was made to a bank account in the name of Johannes J Jacobs with account number 62798857987 (Swift Code: FIRNZAJJ) domiciled with the First National Bank (FNB) of South Africa.
The instruments were housed with Vantu Trade Bank, “a private bank for multi-national corporations, project financiers and financial institutions” registered in Vanuatu, and signed in the name of a Brazilian, Elma Karen Bichara for BRASIL BRAZIL FOMENTO MERCANTIL S.A and Mr Jacobs for Mmina Tshipi.
On the other hand, Kouassi’s firm entered into a ten-year Joint Venture Agreement with Barista Coffee Holdings (Pty) Limited, a Durban, South Africa-based company owned by Wim Fourie and Madelin Fourie, who are known associates of Jacobs.
While Jacobs was a car sales manager, Wim Fourie and Madelin Fourie ran the Barista Coffee warehouse in Durban, prior to the business deals that have now gone south.
A copy of a Barista’s Coffee Holdings commercial invoice jointly signed by Wim Fourie and Madelin Fourie and seen by The Herald showed that Kouassi’s Prosperity Soul Transport LLC made payment of $50,000 for “1/6 face value due as per DOA signed”.
As agreed by the parties in the JV agreement, the payment was made into Jacobs’ First National Bank (FNB) account, the same as used for the Mmina Tshipi deal, The Herald learnt.
However, the investors – Kouassi’s Prosperity Soul Transport LLC and Company B – began to suspect something was amiss when they did not obtain their contracted returns and the excuses became weekly that turned into monthly.
The investors also requested that the Fouries and Jacobs disclose their businesses’ Financial Service Provider (FSP) license which they could not provide.
The Herald further learnt that Company B contacted Vision Global Capital (VGC) and an American attorney, Scott Strong, whom the Fouries and Jacobs had claimed were rightfully on all seven instruments to verify their involvement.
They both confirmed that the instruments did not have their imprimatur and were fraudulent.
In an email dated October 5, 2021, Managing Director of VGC, Eric Melech, informed Company B that, “VGC does not know anything about these alleged transactions, and these parties do not have any valid agreement with VGC for these alleged transactions with VGC. It’s also very clear from their messages that their alleged instruments/SWIFT(s) are bogus/fraudulent/invalid/illegitimate/fabricated.”
In an email dated September 24, 2021, Attorney Strong, told Company B that he was not involved in any capacity and the Instruments were fraudulent.
Armed with these revelations, Company B in several emails pointedly accused Wim Fourie, Madelin Fourie and Johan Jacobs of offering unlicensed financial products in contravention of South African law and challenged them to prove otherwise by producing the FSP license. To date they have not disclosed their license to market financial products, Company B said.
The Financial Advisory and Intermediary Services (FAIS) Act (37 of 2002) states that a person who provides either advice or intermediary services with respect to financial products must register as an FSP.
Section 8 of the Act states that no person may either act or offer to act as an FSP in South Africa unless they are licensed to do so.
Section 1 defines a “financial product” as including securities and foreign currency denominated investment instruments.
The Act requires that persons that provide advice or intermediary services (any act performed by a person on behalf of a client with a view to buying, selling, or otherwise dealing in a financial product), with respect to financial products, must register as an FSP.
Thus began an epic battle by the investors to recover their investments.
“The three of you and others have swindled me and my associate out of $100,000 US Dollars for a fraudulent investment scam. In addition, your team attempted to defraud my associate by soliciting an alleged $300 M Instrument invoicing him to send you $200,000. Please refer to the attachment labeled (Barista Soliciting). Another scam for an Investment with a $15K Invoice, labeled (Barista $15K).
“I am currently requesting on behalf of myself and my associate that Mr. Wim Fourie, Mrs. Madelin Fourie & Johan Jacobs disclose their (FSP) License.
“I am sure the FSB will want to have a conversation with you all after reviewing this documentation. As each day goes by now, we are building a stronger and stronger case adding to the Complaints that we are preparing to file across the board. We understand that you all believe you have gotten away with stealing our funds, but I assure all involved that your day is coming. Ms. Becara the provider of these fraudulent instruments who conveniently closed her operation in Brazil is now operating out of Florida. We have contacted the State of Florida pertaining to her Instruments. In addition to the individual criminal complaints and evidence we continue to uncover more information daily,” read a copy of the email Company B wrote to the Fourie’s and Jacobs and sighted by The Herald.
The complainants lodged a complaint against Vantu Bank with the office of Director, Financial Intelligence Unit, State Law Office of Vanuatu, which confirmed in an email on October 19, 2021, that the bank was being investigated over its involvement in the alleged scam.
On November 13, 2021, Company B lodged a complaint with First National Bank (FNB) about the alleged fraudulent actions of these customers.
Nearly two weeks later, on November 24, 2021, the Business & Premium Fraud & Disputes Department of the bank confirmed receipt of the complaint and confirmed that a fraud investigation was opened with the bank’s Commercial Chief Risk Office Fraud Risk to investigate the allegation.
As the investors continued to ask questions, The Herald learnt, the Fouries and Jacobs offered to settle by sending the investors a 300,045 euros one-off payment from Barista’s Coffee Holdings (PYT) account with account number 62857901708 allegedly domiciled with First National Bank (FNB).
The Herald sighted the purported wire transfer supposedly initiated on January 11, 2022, and Company B’s account with a popular American bank was named as the receiver.
Company B confirmed to The Herald that no such funds were received, and the supposed payment was confirmed to be “fake” by FNB.
After this “fake” wire transfer, Barista’s Coffee Holdings and Johan Jacobs offered to repay the $100,000 initial investment made by the investors, it was learnt.
A copy of an email obtained by this newspaper confirmed that the alleged culprits engaged S Roux Inc, a law firm based in the city of Gauteng, South Africa, as paymaster to oversee the payment to the investors.
On August 4, 2022, the Managing Director of S Roux Inc, Sarel Roux sent an email to Company B confirming the firm’s appointment as “duly appointed paymasters of The Baristas Coffee Holdings and its associate being Mr. J. Jacobs”.
Roux further said that his firm was “awaiting certain funds from a third-party source to which confirmation documentation we are privileged to and had sight thereof”.
He said that upon receipt of the expected funds in the law firm’s Trust Account, $50,000 each would be sent to Kouassi’s firm and company B’s bank accounts in the United States “once proof is supplied to us that all impending action of any manner or way clients referred to above are withdrawn and so confirmed by the relevant authorities and parties”.
In an emailed response on August 9, 2022, the complainants rejected the offer, saying they did not invest $100,000 to get back the principal amount only more than a year after the investment was made.
“We did not lend your clients $100,000 US dollars for their personal pleasure or to simply return our money with no benefit to us,” the email read in part.
However, in an email dated August 10, 2022, Sarel Roux said, “we neither provide financial or legal advice to our clients Barista Coffee Holdings.
“We have been approached by them to act as independent paymaster to receive and disburse funds due to the beneficiaries to be nominated by them”.
He added, “We are not, and have never been in a position to provide these clients with legal or financial advice in the matter pertaining to yourself, and we will only be in a position to execute our instruction once the funds our clients are waiting for appears in our trust account.
“Further to the above and except for executing the due diligence on our client which we have done, we have no further knowledge of their business endeavor’s”.
Roux advised Company B to pursue whichever legal remedy it deemed appropriate to recover its funds.
In an email on August 17, 2022, Roux told Company B: “I was informed this morning that the payment will now only arrive in my account by Friday. Apparently, there was/is some delay in the transfer to South Africa. I am waiting for an update”.
Unsatisfied with the law firm’s handling of the matter, Company B filed a complaint against S. Roux Inc with the Gauteng unit of the Legal Practice Council (LPC), which regulates attorneys in South Africa.
Attorney General, other government agencies were also notified
More than a year after of back-and-forth involving the Fouries, Jacobs, the investors, and the lawyers without recovering its funds, Company B wrote an email to the Attorney General in Pretoria to demand an investigation.
A copy of the email cited by The Herald and dated September 18, 2022, detailed the crux of the matter.
“My associate and I have been attempting to retrieve funds that were wired over 15 months ago for a Fraudulent investment scheme. My associate who has literally been relatively quiet, is now not being quiet. He is an African from the Diaspora of American nationality. He is highly educated and after reviewing all the attachments I am sure that you have witnessed documents firsthand disclosing how this group has conspired for a long time to engage my associate and I to invest while this entire time they are unlicensed frauds. There is Attorneys involved and yes, they may play the card of plausible deniability but in my opinion, they must have known if they did the correct DD (due diligence) as a legal paymaster that this group was peddling financial products without a license. The kicker is we confirmed that the (7) instruments totaling over $500,000,000 are fraudulent by the very trade group they were sent to, and the entities listed in the Instruments have also confirmed that the Instruments are fraudulent. In addition, as a second main fraud they settled with us for $300,000 US dollars and then sent us a fraudulent wire transmission.
“Now we have e-mail communications to SAPS (South Africa Police Service) at every level sending them our complaints and all we have received over the course of 15 months is an automated response. I was under the impression that when a crime is committed the authorities are to investigate,” the email read in part.
“Your administration has been in office for over two years, and I would think law and order and corruption and organized crime would be top priority. This to us is a major issue.
“We have been defrauded for $100,000 USD and we want the designated settlement that is disclosed in the fraudulent wire…of $300,000.
“This is not a case of investing in a bad investment. This is based on a fraudulent investment which is a felony! I have reached out many times to the FSCA and nothing other than automated messages. The attachment above was confirmed by FNB Bank that the wire transmission does not exist in their system,” the email further read.
Days after the email to the Attorney General’s office and without any concrete response, the complainants sent a complaint by email to the Office of the President of South Africa.
Company B further stated that it has issued the President’s administration all the evidence needed to order an investigation.
Records seen by The Herald showed that a certain Phil Mahlangu of the office of Public Liaison and Stakeholder Management at The Presidency confirmed receipt on September 23, 2022.
However, Mahlangu said that complaints were handled on a first come, first served basis.
Company B confirmed to The Herald that many communications have been sent to the President’s office with no results.
Months after, the complainants eagerly await an end to their long walk to justice.
“Attorney General has not responded once. The President’s administration has done nothing, SAPS has ignored us for 17 months.
“At this point it is insulting that these frauds have managed to just walk away with this money, but the biggest slap is nobody from the President’s office down to SAPS has taken any notice to this case after 17 months of constant communication. All the plaintiffs want is the courtesy of the South African Government to intervene and have the appropriate agencies recognize this fraud and assist in having the Defendants make good on the fraudulent settlement /wire from FNB of $300,000. This to the plaintiffs is a fair trade off knowing that the three defendants took their $100,000 and used it for their personal gain with no remorse. There are many involved in this fraud including trade banks, Attorneys on Invoices collecting money as paymasters for investments identical to the same type of Investment programs that the Plaintiffs were defrauded from. The Plaintiffs question why and how licensed Attorneys collecting and transferring funds for clients that they are legally responsible to make sure that transactions of wire transfers are legal and correct can represent these very clients even after valid proof of their legal status has been confirmed, not to mention disclosing proof of a FNB fraudulent settlement wire.
“The biggest question that the Plaintiffs stated was if this was an election year would the South African Government have the same stance towards an organized crime such as this?
“Barista runs a coffee business from a major coffee chain. The question is: if ‘Barista Coffee Corporate’ was aware of such activity from one of their vendors, what would their reaction be knowing that one of their vendors has committed alleged fraud? In addition, Barista Holdings still maintains a business checking account at FNB. Even after notifying FNB about this fraud, they too have ignored us,” Company B said in an email to The Herald.