Forfeiture unit moves against company allegedly running Ponzi scheme

The Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA) has been granted an order to freeze a bank account belonging to a company allegedly running a Ponzi scheme. 

The Pretoria high court granted the AFU the preservation order of more than R4.3m against Piggy Farm Trading on Monday.   

“The Piggy Farm Trading company [allegedly] ran a Ponzi scheme, where individuals could purchase up to 50 virtual pigs at R2,750 per pig, in a digital ‘Metaverse Piggy Farm’,” NPA spokesperson Lumka Mahanjana said.

She said the promoters of the scheme said as it was a virtual pig, the investment was risk-free. In return for the investment, the investor would be paid R550 a month for 12 months, and after 12 months, the pig would be returned to Piggy Farm Trading.   

After receiving complaints from investors, the National Consumer Commission (NCC) initiated an investigation and discovered Piggy Farm Trading operated a multiplication scheme, which offered an effective interest rate of 140% in contravention of the National Consumer Protection Act.

Mahanjana said further investigation by the AFU revealed the scheme appeared to be a fraud.

“The name and/or location of the so-called farm is never revealed on the website of Piggy Farm Trading or any of the social platforms where they advertised the scheme.” 

She said Piggy Farm only referred to an address in the Durban CBD and its different branches. “It is therefore doubtful that a farm or even pigs, to the extent of the investments received, exist.” 

Pretoria AFU head Martin Mafojane invited investors in the scheme to open criminal cases against the company. He said this was because the preservation order was granted in terms of chapter 6 of the Prevention of Organised Crime Act (Poca), which is a non-conviction-based approach to asset recovery.

“This means that the AFU will not always wait for a prosecution and conviction to occur before taking away suspected proceeds of crime, as is the case with the traditional approach of chapter 5 of the act,” Mahanjana said. 

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