Did you know that 80% of South Africa can access only 20% of the country’s wealth? That’s wealth inequality fuels the desire and desperation of the South African public to secure a better financial future.
And when such desperation and optimism filled the financial markets, fraudsters thrived.
Two infamous financial scams in South Africa are the 400% ROI investments through MyWealth Method and MyWealth Dias – Ponzi schemes operated by Charl Coetzee.
In early 2024, two years after being flagged by the Financial Sector Conduct Authority, Coetzee accumulated an administrative penalty of ZAR 73.85 million and was ultimately sentenced to 20 years.
However, has the scam operation of Coetzee officially ended, or is there a brand that continues to defraud unsuspecting investors?
Read on this TRU Insight to learn everything you must know about Coetzee’s MyWealth Method and MyWealth Dias Ponzi schemes.
Coetzee’s Ponzi Scheme at a Glance
What Happened?
In 2022, the Financial Service Conduct Authority (FSCA) flagged Coetszee’s MyWealth Dias for unauthorized provision of financial services to the public. Two years later, the FSCA revealed that MyWealth Dias and its investment platform, MyWealth Method, are investment-disguised Ponzi schemes.
Charl Coetzee, the scheme operator, was fined a total of ZAR 73 million and debarred for 20 years.
What Do We Know?
Promising up to 400% ROI through MyWealth Method and MyWealth Dias share-trading investment, Charl Coetzee successfully solicited and defrauded millions of Rand from unsuspecting South African investors.
His scam operation ran wild from 2020 to early 2024 when the Ponzi scheme collapsed as the platform constantly denied investors’ withdrawals.
Who Are Involved?
The FSCA speculated that MyWealth Legatus – another flagged financial service provider – is a brand aimed at continuing Coetzee’s scam operation. Upon investigation, it’s found that Charl Coetzee, the founder of MyWealth Holdings, claimed to be a “global wealth-creation system that empowers families to achieve financial freedom.”
What Are MyWealth Method and MyWealth Dias Investments?
MyWealth Method and MyWealth Dias were investment companies founded and operated by Charl Coetzee.
MyWealth Method was a ‘Christian-principled’ investment platform where investors invest in naturally processed healing products. Such products ensure that the member would live a minimum of 120 years without any illness.
With such alluring promises, the investment platform defrauded multi-million Rands from its members. However, you must remember that a promised profit greater than the prime overdraft rate raises red flags as a common tell-tale of a Ponzi scheme.
Related: 3 Signs of Scam Brokers and Tips to Avoid Them : What Happened to Coetzee’s MyWealth Method and My Wealth Dias Ponzi Scheme?MyWealth Method owned the following websites:
On the flip side, MyWealth Dias was founded in 2020 following the onslaught of the COVID-19 pandemic.
Is Charl Coetzee’s MyWealth Method and MyWealth Dias Legit and Regulated?
The fake air of credibility was one of the factors why Coetzee and his schemes successfully defrauded investors.
Both websites flashed their alleged Financial Service Provider (FSP) license from the FSCA. The presented are the following:
- FSP 49463
- FSP 45214
This ultimately created a false sense of credibility, the winning factor for investors’ confidence in the companies.
These licenses exist in the FSCA FSP search – a public database containing all the information of the companies authorized by the regulator.
However, it’s later revealed that MyWealth Method and MyWealth Dias fraudulently use the registered licenses to impersonate the following legitimate service providers:
- My Wealth Financial Services (Pty) Ltd – FPS 49463
- Regenesys Investment Fund (Pty) Ltd or MyWealth Investments – FSP 45214
Expectedly, MyWealth Financial Services and MyWealth Investments denied their respective association and affiliation with the fraud-accused investment companies.
The FSCA Debarred Coetzee and Fined the Companies for Violating the SA Financial Sector Law
On the 15th of March 2024, the FSCA concluded its two-year investigation into MyWealth Method and MyWealth Dias business operations.
It’s revealed that both investment companies violated the South African financial sector law, specifically section 11(1) of Banks Act No. 94 of 1990. This section of the Banks Act suggests that the financial or investment business operator should have sufficient financial resources, proper management, and the actual ability to conduct banking or investment services safely and soundly.
As MyWealth Method provided investment services to the public without an FSP license, the FSCA also concluded that the company had violated section 7 (1)(a) of the Financial Advisory and Intermediary Services Act No. 37 of 2022.
This section suggests that an entity (individual or company) can only provide financial services to the public if licensed or authorized by the FSCA.
The companies contravened such financial sector laws, so the FSCA imposed administrative penalties on MyWealth Method (ZAR 58.79 million) and MyWealth Dias (ZAR 15.06 million).
Charl Coetzee, the founder and operator of the two companies, was sentenced to 20 years of imprisonment by the regulator.
Is MyWealth Legatus Affiliated with Coetzee’s Companies?
Two months after Coetzee’s MyWealth Mehtod and MyWealth Dias collapsed, the FSCA flagged MyWealth Legatus. Interestingly, this flagged brand exudes similarity with Coetzee’s business operations.
The regulator warned the public regarding the operation of MyWealth Legatus, confirming the brand’s authorized investment service provision.
Additionally, the FSCA speculates there is a high possibility of an association between MyWealth Legatus and Coetzee’s fraud companies.
Up until the date of publication, the FSCA investigation regarding MyWealth has been ongoing.
Upon investigation, we can confirm that Coetzee is part of the MyWealth Legatus team.
The Tell-Tale Signs of Ponzi Scheme Operations
Scammers’ methods to defraud unsuspecting investors are becoming more and more sophisticated. However, this doesn’t mean falling into the pitfalls of financial ruin is something that you can avoid.
Here are the three primary truth-tellers that the investment company is operating as a Ponzi scheme:
- No Retailable Product – Investment-disguised Ponzi schemes create a fake investment product that boasts profitability. However, such products don’t exist, and the operator can’t publish anything to support the products’ existence.
- Unrealistic Promises – Too-good-to-be-true promises are the tool used by scammers to attract unsuspecting investors. Remember that no legitimate investment product offers guaranteed returns.
- Recruitment-Reliant Incomes – The Ponzi scheme’s premise is robbing Peter to pay Paul. To create a sense of profitability, the operator uses a big portion of new investors’ investment to pay the earlier investors – boosting the flow of new investors.
Knowing these common characteristics that raise red flags is integral to remaining safe during the increasing Ponzi scheme cases in South Africa.
But this can only take you so far. The best shield to safeguard yourself from these scams is collective knowledge from the community.
An online trading community goes beyond providing an avenue to grow your trading network. Additionally, joining a verified community connects you to the genuine experiences and practical insights of experienced traders. This doesn’t open a new way of earning money, but the best practices of keeping safe in the high-stakes environment of the financial markets.
