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Fidentia kingpin tracked down

09 April 2008 Gareth Stokes

Yesterday we received news that the mastermind behind the Fidentia scandal has been detained by the FBI in Los Angeles. Steven William Goodwin fled South Africa for Australia only days after the Cape Town High Court appointed a curator to manage the financial affairs of the Fidentia group. Goodwin is the man behind a company called Worthytrade which acted as a vehicle for a number of Fidentia’s questionable financial transactions.

According to I-Net Bridge Goodwin was arrested by the FBI following a request from the Directorate of Special Operations (Scorpions). The National Prosecuting Authority (NPA) reveals that the FBI “intervention followed an alert issued by Interpol, that Goodwin was en route to the US and that a warrant for his arrest had been issued in South Africa in July 2007.”

Extradition order to follow

“Following his initial detention by the US authorities, Goodwin was formally detained in Los Angeles on April 7 based on a warrant for his provisional arrest, issued by the US District Court for the Central District of California,” said the NPA. They now have 60-days in which to apply for Goodwin’s extradition. And provided this extradition application is successful, Goodwin will return to South Africa to face charges of theft, fraud and corruption.

According to online reference Wikipedia the US signed an extradition treaty with South Africa in September 1999 and that treaty is in force from June 2001. There should thus be no problem in securing Goodwin’s extradition.

A lengthy investigation

This is the latest development in a saga which began more than two years ago. Fidentia was first investigated after an ex-employee raised concerns with the FSB in February 2006. At this stage, the FSB conducted further interviews with directors and staff at Fidentia before calling for a full financial inspection, commencing in July 2006.

The complex nature of the investigations meant that the FSB inspection report took six months to complete. It was released early in January 2007. With the report in hand, the FSB wasted no time in taking the matter to the Cape Town High Court. The court found enough evidence for decisive action and Fidentia Asset Management (FAM), Fidentia Holdings and Bramber Alternative were placed in the care of curators on 1 February 2007.

Court proceedings underway

Brown and his former financial director Graham Maddock were arrested soon after. The Scorpions pounced in March 2007 and both were granted bail of R1 million. A third accused in the case was arrested much later, in August 2007. Piet Bothma is the suspended chief executive of TETA and was to be tried with Brown and Maddock. His crime is slightly different in that he is accused of accepting a substantial commission to place TETA money with Fidentia. His bail was set at R200, 000.

Maddock’s trial was subsequently separated from Brown and Bothma. He pleaded guilty to 54 counts involving fraud, theft, money laundering, contraventions of the Financial Intelligence Centre Act, and the reckless or fraudulent conduct of business. He was sentenced to seven years imprisonment on 1 February 2008. His company, Maddock Incorporated, which facilitated a number of ‘money laundering’ transactions was heavily fined. A fine of R50m was imposed for money laundering and an additional R10m for contraventions of the Financial Intelligence Centre Act (FICA). These fines were suspended for five years. Brown and Bothma face a range of charges including fraud, money laundering and corruption. That case is ongoing.

And Brown also faces separate charges of fraud and theft relating to R5.5m he allegedly used from the Infiniti rewards programme to pay salaries and other Fidentia company expenses. He is also alleged to have swindled R3m from Fundi Projects. This trial will be heard in the Cape Town Regional Court and is set for nine days between 15 September and 3 October 2008.

Editor’s thoughts:
With Maddock already sentenced, J Arthur Brown’s criminal trial already underway and Goodwin’s detainment in Los Angeles it looks like the three main players in the Fidentia scandal will be brought to book. Do you think it’s sufficient to prosecute only the masterminds of a financial scam – or should the prosecuting authorities examine the activities of all Fidentia employees? Add your comments below or send them to gareth@fanews.co.za

Comments

Added by Mandy, 10 Apr 2008
My opinion is that every single person, employee or family members of employees and clients, (lawyers included) who benefited from the blatant fraud that was taking place should be prosecuted. As for FSB, what were they doing when the beans were spilt? Thinking about their next paycheck at the end of every month? How tragic for those persons who lost their hard earned money and goodness knows if they will ever see a payment of their money which these skelems defrauded. May they rot in jail.
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Added by Derick Saaiman, 09 Apr 2008
Nail the Chiefs not the Indians.Dont turn this into a witch hunt.
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Added by Jamie, 09 Apr 2008
I think if it can be proven that the staff were aware of any fraudulent activities thay should also be prosecuted, however the focus should not be taken off those behind all of this.
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Added by Mare, 09 Apr 2008
We invested money with Ovation Group, which was placed under Curatorship 1st March 2007. Have you maybe got any news as to whether we will be getting our money back? We have been trying to find a way to contact some-one that will be able to shed some light on this nightmare!!!! I'll appreciate it if you can maybe advised me as to who to contact dor any details. Thanking you Fillis.
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Added by Magdalena De Lange, 09 Apr 2008
I just feel that the FSB took too long before jumping in. Surely this was an urgentmatter and they should have appointed a bigger and more specialised team to investigate after being informed in Feb 2006 They receive more than sufficiant income from the industry. They should also carry some responsibillity and must also be investigated why it took a year. Is it because the staff of the FSB is not quilified to act immediately and with knowledge ??
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Added by JS, 09 Apr 2008
As daar nog ander voormalige werknemers is wat betrokke was en deelgeneem het op hierdie heerlike vaart op die Nyl,moet hulle verseker aangetree word. Die deler is net so goed soos die steler.
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Added by Abe, 09 Apr 2008
I went on early retirement(age 55) and invested my money through Anheru to Fidentia. I feel that the curators are taking too long to pay the moneys out. Is it possible that FSB could follow up. Thanks.
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