How a Cape Town retiree fell victim to a R10.6 million scam

A 78-year-old former Cape Town businessman has fallen victim to business email compromise and banking fraud, losing nearly R10.6 million of his life savings and pension investment.

Now, police together with the Hawks, are hunting for the network of organised criminals who may be in other African countries.

Hawks spokesperson, Zinzi Hani, said the matter was in their hands following a criminal case registered in December 2024.

“I can confirm that the matter is with the Hawks and that the matter is under investigation,” she said.

Police spokesperson, Wesley Twigg, also confirmed their portion of the investigation.

“Be advised that this is a fraud case and is still under investigation. There are no new developments to report at this stage,” he said. 

The business email compromise fraudsters allegedly used reputable financial institutions such as First National Bank (FNB), and Capitec to commit their crimes.

Their modus operandi is believed to be orchestrated by hackers infiltrating email systems of reputable financial institutions such as investment schemes, pretending to be the companies and then allegedly coaxing their victims into believing they were the authenticated parties.

Once trust is gained, they then allegedly ask their victim to move their large sums of money into their various banking accounts.

In the case of this victim, who is being referred to as Mr X in order to protect his identity for security reasons, his funds were traced across multiple financial institutions that were identified as recipients of the proceeds from fraudsters.

Mr X, who met with the Cape Argus this week, said he has been left with sleepless nights following his ordeal and is being supported by his family.

He owned a small business in Cape Town for more than twenty years and took retirement last year at the age of 78, when he decided to invest his life savings with a recommended financial institution by his financial planners.

“I sold my business at the end of August 2024 and needed to invest my life savings of R10.6 million for my pension, a financial institution was recommended by my financial planer.

“The money was to be paid into the recommended financial institution as recommended by our financial planner.

“On November 22, 2024, I received an email from a staff member (name withheld) from my financial planner to say that financial institution would be debiting my business account for these funds.”

Just four days later, Mr X then received a second email, believing it was from the same staff member, not knowing it was in fact the fraudsters.

“On November 26, I received an email and I thought it was the same staff member, that the arrangement (debit) had fallen through and that I should make direct payments to an FNB account supplied to the value of R6 million.”

He said after this, six payments of R1 million each at two transactions per day to the FNB account on November 27, 28, and 29  2024, totalling to R6 million were made.

On November 29, he then received another email, a fraudulent one, which he was unaware of, with the same letterhead of the financial institution, requesting that R4.6 million to be deposited into a Capitec Business account, split into two payments of R2.3 million.

“I deposited the two payments of R2.3 million each on December 2, 2024,” he added.

“On December 9, the financial institution legitimately debited my account for a portion of the original funds, which were unavailable as the funds had been already paid into the scammers account."

Mr X said this was when he became suspicious and immediately contacted the financial planners to investigate what happened.

He was then horrified to learn that the financial institution had sent him no emails or proof of payments as funds were never received.

“The financial planners informed me that they did send me an email on December 9, 2024, informing that an amount of R5.35 million would be debited from my email account.

"I am assuming this email was deleted from my account by the fraudsters as I never received it,” he said.

Mr X, who banks with another reputable bank, said he contacted his bank to notify them what had transpired and requested them to freeze the FNB and Capitec accounts in which he had deposited the funds.

A day later he had a meeting with management from the financial planners and later, upon investigation, it was determined that the email used by the scammers had a subtle spelling error, which Mr X did not pick up.

He said he was later informed that the bank accounts used were in fact used by scammers.

“All the emails from the scammers were erased from my email by the scammers and we have been unable to retrieve it from my hard drive.”

He then proceeded to open the criminal cases and later received a total of R5.1 million of the R6 million, which had been recovered from the FNB account.

Following that, a R9 000 was recovered from Capitec, with aR4.6 million still owing.”

In response to the Cape Argus, FNB said fraud had been detected on the account.

“FNB confirms that the individual was a victim of Business Email Compromise fraud.

“Due to the pending criminal investigation by law enforcement authorities, we are unable to provide any details on the matter.”

Capitec said they also acted immediately and that they discovered mass fraudulent transactions.

“Comprehensive feedback was provided to the issuing bank on the same day the report was received, enabling them to take further action.”

The financial planners said due to the confidentiality provisions outlined by the Financial Advisory and Intermediary Services(FAIS) Act, they were legally bound not to disclose any information pertaining to their client.

Cape Argus