Founders of the popular online stokvel The Wealth Hub, which has attracted more than 20,000 members, are under investigation for alleged money laundering and operating a pyramid scheme. The Financial Intelligence Centre, suspicious of the large amounts of money flowing in and out of the stokvel's accounts, has been monitoring it for several months, which led to the National Prosecuting Authority applying to the Johannesburg High Court to have its accounts frozen, according to court papers.story_article_left1The investigation shows that one Standard Bank account had a nil balance on May 5 this year but by May 26 contained R5.4-million. A second bank account went from a nil balance on May 11 to R4-million on May 26.In an affidavit submitted to the court last month, the NPA asked that two Standard Bank accounts with R9.4-million be frozen pending further investigation, because it believed "a substantial risk exists that it will be ... concealed, rendering it impossible to trace". It is not known how much money was in Absa accounts that were also frozen.The Wealth Hub shot to prominence after Business Times raised concerns that it was offering members unreasonable returns and could be a Ponzi scheme.The NPA was tight-lipped this week about the investigation when approached for comment. But documents submitted to the court by the NPA, which Business Times has seen, say "an examination of The Wealth Hub's business plan clearly demonstrates that the entity's compensation plan is a multi-level marketing pyramid scheme" and that "both schemes [which include the stokvel] promise unrealistically high returns based solely on member recruitment".The Wealth Hub was set up by former University of the North West vice-chancellor Dr Ngoato Takalo, Dr Lizette Kleynhans and Stefan Minnaar. Takalo was part of the Lilitha Strategic Investments Consortium that bought 10% of Deputy President Cyril Ramaphosa's Shanduka Group in 2009.Minnaar, as sole signatory and, according to the Registrar of Companies, the only listed director of The Wealth Hub and the TWH Stokvel, faces the most scrutiny.story_article_right2Marius van Huyssteen, who represented Takalo and Kleynhans, said the Wealth Hub had lodged its objections with the NPA to the bank accounts being frozen.Van Huyssteen said that they were getting advice on banking law and would meet the authorities to find out what steps, if any, could be taken to ensure that the scheme complied with the law."We cannot comment at this stage on the merits of the case," he said.Minnaar's legal counsel, Karen van Eck, declined to comment, other than to say that she had opposed the court order.In terms of the scheme, each member is assigned 39 new members (known as "downliners") who pay the member R200. This means that the stokvel member has R7,800 at the end of the first level. In theory, by the third level, the member (who is now an upliner) should receive R156,000 from investors who entered the scheme after they did. Each time a member graduates to the next level, an escalating administrative fee is paid to The Wealth Hub.This week, some members of The Wealth Hub were left confused and concerned by the court action.On Wednesday, Neliswa Boitelo Fani commented on the stokvel's Facebook page that she had been waiting for people below her to pay her - despite having paid people in the above tier in May. Grateli Mayo said: "The others, they didn't pay us - they said they are not interested any more when we phoned them."story_article_left3Martin Jordaan commented: "Me and my wife made all our payments, but we don't get any downliners?"OkaZwide Ntusenhle said: "I'm beginning to think this is another scam. If we are given upliners, what is so hard to give downliners? Upliners were created by the system so why can't the same system create downliners? Something fishy is going on here."Members such as Onismo Mudambo continued to throw their support behind the scheme: "Indeed it takes time, it takes people with mutually tolerant hearts to understand, hence Rome was never built in one day, we wait in full support."Gerald Mwandiambira, acting CEO of the South African Savings Institute, said that during an economic slump there tended to be a proliferation of such schemes.Trevor Hattingh of the National Consumer Commission said that it was at present investigating five pyramid schemes that it had singled out as being particularly harmful to consumers...