Sydney South African’s $1.5 billion Ponzi scheme shocks Australia and SA

June 13, 2009 by Henry Benjamin
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Questions are being asked throughout Australia’s Jewish community…who is Barry Tannenbaum?  Who has lost money to him? The community woke up to a front page in the Fairfax Press this morning indicating that Australia had discovered its own Bernie Madoff.

Barry Tannenbaum

Barry Tannenbaum

Barry Tannenbaum has been accused of operating an elaborate Ponzi scheme which has yielded more than $1.5 billion. The scheme has its origins in Tannenbaum’s native South Africa but there are fears that it has affected investors in Australia.

The questions:

Who is Barry Tannenbaum?

His family is one of the most highly respected in Johannesburg. One member of Sydney’s South African-born community told J-Wire: “The Tannenbaums are like royalty. They are fabulously wealthy and run one of the biggest public companies in South Africa.” He is the pious 43-yr-old son of Harold Tannenbaum who founded Adcock and Ingram, South Africa’s second largest drug company.

What was the scheme?

Invest with Barry to finance the importation of raw materials believe to be needed for the manufacture of drugs to combat  HIV/AIDS diseases and enjoy a massive 20% yield on your money every twelve weeks…not bad, Barry….more than 80% per annum.

So, where is Barry?

He has set up home in Australia believed to be about three years ago, living in the leafy Sydney suburb of St Ives.

Who has lost money in Australia?

Not yet public knowledge but there have been unconfirmed accounts of South African members of Sydney’s Jewish community and Israelis who live in Australia.

How did events unfold?

Christopher Lappan, a South African businessman. invested 3 million Rand [A$460,000] with Tannenbaum on the basis that there were customers in place for the imported goods. But when he asked for his capital and interest back, a sum believed to be about 5 million Rand [A$766,000]  Tannenbaum’s cheque bounced and the bank told Lappan that Tannenbaum had closed the account.

Reported victims in South Africa are Former Pick n Pay chairman Sean Summers who expected a return of  R100m [A$15m] from a R50m [A$7.6m] investment and OK Bazaar former CEO Mervyn Serebro who believes his R25m [$3.8m] is now worth R50m.

Lappan applied to the Johannesburg High Court last week to have Tannenbaum declared bankrupt.

J-Wire has received reports that Tannenbaum has employed the services of two security guards and is being ‘protected’ 24/7.

It is expected that investors will make themselves known now that the story is in the public domain.

In a statement to the ABC, Tannenbaum said:

Not only did my statement not find its way into the press, I now notice that in a period of 24 hours, the amount of the fraud that I am alleged to have committed has increased tenfold.

Having been publicly vilified, tried and pilloried, there seems to be little reason for me to offer comment because clearly the adage ‘do not let the truth get in the way of a good story’ applies here.

I understand that an attorney in South Africa, a Mr Ian Levitt, is reported as having stated that an application is to be brought in Australia for a Mareva injunction.

It is not my function to explain what the South African attorney meant thereby.

It suffices for me to say that I have no intention of leaving Australia. I have no intention of disposing of whatever assets I possess, and I in fact assure whoever requires such assurance that I will not do so.

I note that the self-same attorney alleges that I have spirited away my assets out of South Africa.

I challenge him to produce one tittle of evidence to substantiate this outrageous and unsubstantiated piece of drivel.

Thank goodness that the Sydney Morning Herald published one piece of information which must raise a question mark over the suggestion that I single-handedly, if at all, spearheaded a massive scam.

The passage reads: “Two Johannesburg lawyers, Dean Rees and Darryl Leigh, are said to have made millions of rands by signing up investors.”

If there is no hard proof that they are guilty of any wrongdoing, there is likewise no proof that I have committed fraud.

So why all the focus on me and me alone?

In fact, I state categorically that I am not sitting with millions. I have not amassed some fortune that I have spirited away, and in due course an audit will bear out this statement, if people are still interested in hearing the truth.

Maybe some attention will then be given to others who might have made millions.

I notice from the article in the Sydney Morning Herald reference is made to an investigation by a firm, Specialised Service Group.

At the helm of that entity stands a Mr Warren Goldblatt. It might be interesting to read what Noseweek Magazine, also quoted in that article, has on occasion had to say about this particular gentleman.

As for the sensationalisation of my having consulted with people wearing “rumpled clothes”, I can only speculate as to what this imputation amounts to.

This type of nonsense is calculated to add to the speculation about who I am and whom I associate with.

South African media reports that Rees and Leigh are now living in the lap of luxury in Switzerland.

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