Tannenbaum man fights for assets

NPA vows to nail men behind R12.5bn Ponzi scheme, writes Rob Rose

The National Prosecuting Authority (NPA) made a surprise visit to the South Gauteng High Court this week to refute claims that its bid to bring to justice those responsible for the R12.5-billion Tannenbaum Ponzi scheme had stalled.

This week's court case - a sideshow in the wider scandal - saw lawyer Dean Rees fighting efforts by Qatari-based real estate company Barwa to have him sequestrated in Mr Justice Percy Blieden's court.

Rees, who is now living in Switzerland, acted as one of the "agents" for the scheme. Though prosecutors have painted Rees as one of the masterminds of South Africa's largest fraud, the 39-year-old lawyer claims he was duped by the scheme's founder, Barry Tannenbaum, and became aware of the fraud only "after the fact".

In legal papers lodged in recent weeks, Rees finally puts a figure to the vast sums of money he was paid by Tannenbaum' scheme. "I, and entities over which I had control, received commission payments of approximately R70-million" between 2007 and 2009, he says.

But he remains adamant that he was "not aware of the forgery and fraud committed by Tannenbaum" on Barwa, or anyone else.

With Tannenbaum in hiding in Australia, Barwa has targeted Rees in a bid to recoup the $31.3-million it invested in the scheme.

Barwa's evidence includes a signed affidavit from Tannenbaum in which he admits he "altered or fabricated" documents, and says this was done "with (Rees') active encouragement and full knowledge".

In these new court papers, Rees mounts a fierce denial of any fraud, turning the spotlight on the NPA instead. "Not only has (Barwa) orchestrated a campaign of vilification against me ... (but it now seems that) no valid arrest warrant for my arrest exists in South Africa," he says.

If true, would be embarrassing for the NPA as finance minister Pravin Gordhan announced in parliament on October 27 2009 that arrest warrants had already been issued for Rees and Tannenbaum.

Yet Rees said he had found out that the South African Police Service's crime administration system "does not reflect any warrant for my arrest", nor any investigation into him.

But in court, NPA deputy director of prosecutions Glynnis Breytenbach handed a letter to Judge Blieden in which she confirms that "the warrant of arrest was duly issued on my request ... on 27th October.

"It is my intention to move forward with an extradition application against (Rees) to secure his return to South Africa to stand trial," she says.

Rees relocated to Switzerland towards the end of 2008, about six months before the scheme was exposed as a fraud. A series of court actions in the UK and South Africa by Barwa have ensured that Rees's assets have remained frozen.

But there have been indications in court that Judge Blieden might lift the sequestration order, allowing Rees access to his frozen funds.

While Barwa's lawyer argued that Rees's estate should be provisionally sequestrated, the judge replied that "we have a dispute, which is difficult to deal with on the papers".

Judge Blieden said Rees denies that he owes any debt to Barwa "on 100 different grounds, so you can't ask me to make a decision".

As Rees's version of events contradicts Barwa's, the judge said it seemed the best options were either to refer the matter to trial, where both parties could be cross-examined to see who was lying, or to lift the sequestration.

"Can I really decide (this) issue? Surely that's got to go to trial," he asked the lawyers rhetorically at one point.

Rees's advocate Etienne Theron argued that there was "no reason why this (sequestration) should not be dismissed".

But Barwa's lawyer Nazeer Cassim said that if Rees's sequestration was lifted, "we suspect there'll be no assets left".

The judge will give a ruling on this case in the next two weeks.

This comes as a number of the 880 investors in the scheme prepare to testify at a closed inquiry into Tannenbaum's estate, organised by the liquidators, that will begin next week.

This development has left many investors feeling victimised and complaining that "innocent investors" are being targeted by the authorities rather than the people who concocted the fraud.

"That's isn't true," said one insider to the criminal probe. "From the information we've gathered, I estimate that only about 10% of the investors have nothing to hide from a tax or legal perspective."

Prosecutors also dismiss the view that Tannenbaum will not be called to account, saying an application for his extradition will be lodged this year.