Pastor Colin Davids, from Kensington, who with Derek Bredenkamp, ran a multi-million Rand Ponzi scheme were sentenced to 12 years each in the Specialised Commercial Crimes Court in Bellville, of which three years were suspended.

By earning the trust of his congregants and the broader community, Davids persuaded them to invest funds for his forex trading company, Platinum Forex CC, which was not a registered financial services provider.

According to Christo Snyman, the Managing Member at CS Forensics, the scheme began in 2009 when Davids convinced members to invest large sums of money in him, promising significant returns.

He said this case highlights the complex interplay between faith and financial trust, leaving many in despair and defrauded.

“Initially, while he lost the funds through the forex trading scheme, paying investors with other investors’ funds and enriching themselves, Davids and Bredenkamp continued to supply statements falsely indicating that investments had grown between 24% to 94% per annum. In one instance, a client invested R300,000 in 2011, and by June 2015, the statement received from Platinum Forex reflected that the money and interest due and payable to him was over R4.5 million,” Snyman explained.

As suspicions grew, the pastor hired the forensic auditing firm where Snyman was working at the time to prove him innocent.

“He had already been under investigation when he hired us, and the mandate included commenting on the findings of the global professional services firm, EY’s report regarding the case. Our commitment was to investigate this case objectively and independently, and the forensic audit confirmed the findings of EY’s report”.

Davids and Bredenkamp were sentenced on charges of contravention of both the Financial Advisory and Intermediaries Act (FAIS) and the Banks Act for money laundering and 56 counts of fraud amounting to R5,8 million. Both were sentenced to 12 years imprisonment, of which 3 years were suspended for five years. The asset forfeiture unit was successful in the recovery of over R90m, which was refunded to the investors of the scheme.

“As a figure whom many entrusted with spiritual guidance, his involvement in a financial scam of this size represents a significant ethical violation, one that the court has rightly addressed by finding him guilty,” said Snyman. “It also highlights the impact of abusing a position of trust, and the utmost importance of making sure you’re dealing with registered financial service providers and advisers.”

n 2015, the Western Cape High Court granted the preservation order to seize the assets of Platinum Forex and its sole member, Davids.

It was due to the successful investigation of the Financial Intelligence Centre (FIC), the Hawks, the Directorate of Priority Crime Investigations and the police.

The State proved that Platinum Forex, a close corporation based at Parow unlawfully collected more than R100 million from unsuspecting members of the public under the guise that it was a lawful investor that invests in foreign exchange investments (forex). 

It was also proven that Platinum Forex was not registered as a financial service provider and is not lawfully entitled to conduct the business of a banker.

The NPA said during the period 2009 to 2015, Davids, and  Bredekamp operated a Ponzi Scheme and  solicited investments from the public to the amount of R329 million. 

They further stated that the duo promised investors a monthly return of 2% to 8 % and guaranteed the invested amount at the end of the investment period. 

The two also paid investors with other investors’ money and alternatively with the new investors’ money.

The court papers states that Davids used some of the investors’ funds to pay for two immovable properties in Plattenkloof and Hermanus, motor vehicles for his wife, household expenses from retail stores such as Woolworths, Checkers and Pick n Pay.

Congregants impacted by the fraudulent dealings of Davids, his company Platinum Forex CC, and the company’s marketing manager, Bredenkamp, have fallen on hard financial times since they lost their pension funds.

investigating officer Ronald van Niekerk who was called as a witness for the state to testify in aggravation of sentencing told the court that the  ponzi-scheming pair had directly or indirectly, solicited deposits, investments, and loans in the total amount of R329.8 million from individuals – most of them church congregants of the former New Direction Grace Church – to hold in trust and forex trading on behalf of and to the benefit of such investors and lenders. The Parow church has since been renamed.

The court was told that  pensioners, widows and people who were retrenched from their jobs suffered severely financially due to the losses suffered through investments they had made.

Individuals affected by the fraud, who were not named as per court instruction to not cause further trauma, said they wanted the two to be imprisoned for lengthy periods to deter others from causing the same hurt to others. 

Van Niekerk said  Davids lured them by using ‘Christ’s name’ to defraud congregants.

“One of the witnesses I had contacted after the accused were convicted said she has since had to move to a backyard in Bishop Lavis where she lives with family. She lost everything and where she lives there is no tap. She lives off a R320 Sassa grant and on a previous occasion when I had asked her to be at court, she was unable to afford the traveling costs.

“Another witness said they had invested their own money as well as a friend’s funds which came from a deceased estate. The person said they now still owe money to that friend for the money that was lost. This person asked that the accused be imprisoned for a long period. Another victim said they have lost all their money from their pension fund and now, with a sickly spouse, they are unable to pay money for a caregiver. They said they trusted th

e persons with their money and they asked for a 100 year imprisonment,” said Van Niekerk.

After the sentencing Snyman said it’s important to recognise common red flags when dealing in these types of matters.

“Be cautious of investment offers promising unrealistically high or guaranteed returns, such as doubling your money in a year. If you’re pressured to keep investing instead of withdrawing funds, or if you encounter excuses like “system updates” or “funds locked,” consider these red flags.  Legitimate investments provide a prospectus, audited financial statements and risk disclosures. Additionally, if you’re urged to recruit friends or family to increase your earnings, this pressure is a warning sign,” he said.

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