What happened: Alleged diamond swindler Louis Liebenberg, wife Desiree, and seven co-accused were arrested and charged with five counts of racketeering, six counts of money laundering, and 42 counts of defrauding investors of R 4 billion
Where it stands: Husband and wife masterminds will spend Christmas in jail, while other co-accused are out on bail. Bribes to royalty, and politicians were exposed, while victims were left penniless.
What’s next: Politicians linked to the case are being probed, court proceedings will resume on February 4, 2025
Tariomix, Louis Liebenberg, and an alleged diamond Ponzi scheme
Louis Liebenberg and his wife, Desiree, were arrested at a restaurant in Johannesburg last October. The events that transpired were nothing short of a reality show unraveling in a courtroom.
Here’s what we know so far.
What is Tariomix?
Tariomix is a diamond company owned by Louis Liebenberg established in 2020. It is more commonly known through its trade name Forever Gold and Diamonds and it manages the buying and selling of diamonds.
In 2020, Louis Liebenberg and co-accused Magdelena Petronella Kleynhans registered Tariomix where they were both directors. Another company named Forever Zircon was registered in 2021, which also dealt with diamonds.
Through social media and radio interviews, Liebenberg invited investors to invest in diamonds for unrealistic profits in a short amount of time. According to the SAPS statement, thousands of investors made payments to the platform amounting to approximately R4.5 billion.
Read more: 1980’s Kubus Scheme: First-Ever Ponzi Scheme in South Africa
Its investors, mostly Christian Afrikaners, were allegedly “sweet-talked by Liebenberg’s promises of miraculous returns,” and he claimed the minerals were blessed by God.
One failed investor claimed that Liebenberg “used God’s name and swearwords in one sentence…to steal from the poor and to give to the rich.”
In February 2023, the company was placed in provisional liquidation after two investors filed a complaint that they never got their promised payouts and accused Tariomix of being a Ponzi scheme.
A report by provisional liquidators found that Liebenberg had directed R3.2 million from Tariomix to fund former president Jacob Zuma’s legal battle against a journalist.
Meanwhile, the Hawks state that proceeds from Tariomix were used to purchase 2 mines, a Ford Bakkie, a BMW 230i sport, a Toyota Agya, Kruger rands, and silver coins, and to fund Liebenberg’s lavish wedding and honeymoon in Greece.
Is it a Ponzi scheme?
The diamond company owned by Liebenberg is surrounded by allegations of a Ponzi scheme. In 2023, 13 court applications accused the company of manipulating investors with offers to buy diamond parcels that received no returns.
Tariomix allegedly defrauded R4 billion from investors and creditors. The speculations are that Tariomix’s business resembles a Ponzi scheme, a type of investment fraud where earlier investors are paid using capital from newer investors, instead of actual profit earned from legitimate business. A business model like this would rely on consistently defrauding new investors.
At present, the court has not yet ruled on whether Tariomix is or is not a Ponzi scheme.
Who is Louis Liebenberg?
Louis Petrus Liebenberg, 60, is a high-profile Northern Cape businessman active in mining and dealing gold and diamonds. However, Liebenberg has long been accused as a “conman” running Ponzi-like schemes and illegal mining activities.
In the past, Louis Liebenberg has been linked to many fraudulent claims. Several Facebook groups were even set up allegedly exposing Liebenberg as a fraud, moreover, private investigators had set up online services specifically to retrieve lost funds from Liebenberg investments.
Related: How to recover scammed money in South Africa 2024
The Daily Maverick described Liebenberg as a “self-absorbed huckster with a Donald Trump-like appetite for power, corruption, and chaos.”
Here are some of the alleged schemes that Louis Liebenberg has been tied to:
- In 2007, the Department of Trade and Industry (DTI) held an investigation of the diamond company Wealth 4 U (W4U) owned by Liebenberg. W4U promised a 5% monthly dividend on shares sold for R1 each, which alerted the DTI. The firm was liquidated in 2010, while investors got less than 1c for every R1 investment.
- In a 2020 interview on Carte Blanche, Liebenberg admitted that trading Forever Gold and Diamonds is illegal. When asked by the investigative team if his dealing was legal or illegal, he said, “Both. But we make it legal.” Moreover, he was linked to helping the Italian mafia to smuggle USD 450 million worth of diamonds out of South Africa.
- In 2021, the Northern Cape Hawks Serious Organized Crime Investigation Unit began its investigation on Liebenberg’s company Tariomix. This led to the freezing of Liebenberg’s and Tariomix’s bank accounts.
- The Hawks’ investigation turned into an extensive five-year chase on Liebenberg, leading to his arrest on October 22, 2024.
Liebenberg is certainly no stranger to controversy. He has since been very public about his past relations with mob daughter Pina Ferrante; posted a video impersonating a black president; and has invested in a whites-only settlement in the Northern Cape. Meanwhile, former president Jacob Zuma referred to him as “the definition of loyalty.”
Louis Liebenberg was born in Port Nolloth and was the son of a pastor. He allegedly inherited mining rights to exclusive marine diamond concessions along the West Coast from a man named Johannes Huisamen, a wealthy member of his father’s congregation. However, his spokesperson Dirk Lotriet, has also referred to him as a “former hobo, who pulled himself up by his shoestrings to become a billionaire…”
In 2024, he ran for parliament to represent the Free State and Gauteng regions but lost.
Former staff speak out about Tariomix scam
Since the arrest of Liebenberg and his wife, Desiree, several former staff members have spoken up about the case regarding Tariomix and Liebenberg’s relations with politicians, law enforcement, and royalty.
Ex-bodyguard turned whistleblower says Liebenberg bribed politicians, police, and royalty
Liebenberg’s previous head of security Heinlo Jooste had released a a 22-page affidavit identifying high-ranking politicians, law enforcement officers, and other powerful individuals that were “lavished by wealth” by Liebenberg during meetings.
Jooste was Liebenberg’s security chief from 2021 until 2024 when, Jooste claims, their working relationship soured after Liebenberg accused him of stealing diamonds.
In the statement, Jooste said that Liebenberg “used his wealth and his money to garner influence and protection,” and that Jooste was asked to carry a back that contained polished diamonds, gold, silver, and large wads of cash given to officials and politicians.
He claimed that Desiree Liebenberg often counted the cash and accounted for every payment and to whom it was paid.
Read more: What happened to BHI Trust? | The biggest Ponzi scheme in SA?
Jooste revealed several brow-raising deals with various public individuals, and even members of the police.
In the affidavit, he wrote of the following deals:
- On separate occasions, Liebenberg handed R250,000 cash wrapped in a napkin and secured with rubber bands; and then R400,000 at a dinner table to a South African Minister.
- A high-ranking former politician received R500,000 inside a paper bag at Liebenberg’s office in Kempton Park, and then another R750,000 in a gift bag a year later.
- The daughter of a politician also received varying amounts from R60,000 and R250,000.
- Another incumbent high-ranking politician received 3-carat diamonds as a “gift” during a visit to the politician’s home in a luxury Johannesburg estate.
- In 2023, a senior mineral resources and energy department official received R250,000 in a rucksack at a restaurant, after Mrs. Liebenberg counted the money in the back seat of a vehicle.
- A top police official went on late-night visits to Liebenberg’s home with two, masked men, and received a gift parcel with cash at every meeting.
- A Zulu royal was handed R350,000 in a boutique hotel in Pinetown, and another R200,000 in Sandtown a month later.
Jooste also revealed that Liebenberg had ordered him to “take out” Vaughn Victor, the lead liquidator of Tariomix, to which he refused.
Read more: The Surge of Online Scams
While the named politicians and officials will eventually appear in court, all eyes are on Deputy President Paul Mashatile and his wife Humile.
Mashatile claimed that his wife Humile Mashatile received a diamond as an “unsolicited gift” from Liebenberg, however, they failed to declare the item to be in their possession.
However, the DA is intent on investigating the “possible contradictions” in Mashatile’s declarations.
Former admin says Tariomix scam victims committed suicide
Another whistleblower, a former administrative worker at Tariomix, said that thousands of people’s lives were ruined because of the alleged Tariomix scam.
The staff member told Daily Maverick that people from all walks of life had invested and lost all their money to Tariomix and struggled after losing so much of their savings, “many people were left penniless and some even committed suicide,” said the anonymous staff member.
He went on to say, “People from all walks of life have invested and lost millions of rands. I am aware that a Vredendal farmer died a month ago. He invested R2.5 million and lost everything…I know that people from Bloemfontein, Malmesbury, Springbok, Kuruman, and other parts of the country have also lost a lot of money in this scam…”
Just a ponzi scheme or something more sinister?
As it stands, the arrest of Liebenberg and the controversy around it has certainly shaken investor confidence and sentiment in the South African market. The heavily-reported trial of Mr. and Mrs. Liebenberg is unfolding to be more than just a Ponzi scheme.
While some South Africans have lost their entire life savings on Liebenberg’s alleged Tariomix scam, a much larger threat to South African politics and economy is emerging.
Liebenberg has since established his relations with many high-ranking officials on both sides of the political spectrum. According to Jooste, “a hostile and forcible takeover of government was the general underlying theme of many meetings he held with individuals and entities.”
Liebenberg often publicly claimed to have strong alliances with Zuma, the MK party, the pro-Zuma faction of the ANC, and the Zulu King. He also made his utter disdain and disgust with the ANC and DA parties known.
How to know if diamond investment is real
An ongoing trial with one of South Africa’s biggest diamond businessmen shouldn’t deter you from investing in this luxury investment if you wish to.
However, diamond trading is an unregulated market and can be hard to crack for private investors. Cut diamond prices are tightly controlled by De Beers, which invites buyers from the jewelry industry to make sealed bids.
Private investors can still invest in diamonds by directly owning diamonds, buying physical gems, buying shares of diamond mining companies, or investing in diamond funds.
Thorough research, advice, and consultation are highly recommended before making any decisions on diamond investment.
