Port Elizabeth smooth operator fleeces investors out of millions
Scores of victims lose out in foreign exchange trading scam
A Port Elizabeth man has pleaded guilty to running a massive foreign exchange trading scheme in which scores of investors – including some of his own family members – lost a staggering R23m.
As David Wilmot, 46, smooth-talked a string of victims – from doctors to businessmen and even an 82-year-old woman – into handing over their hard-earned cash, he took from one investor to satisfy the next, until it all came crashing down.
The Sunridge Park family man had managed to string them along for five years.
When questions were asked, Wilmot appeased his clients with fake documentation to showcase their returns.
Then, shortly before his matter was postponed for sentencing on Thursday, he made one final promise to them – he would pay back every cent.
Sceptical state advocate Tjaart van Zyl said only time would tell whether or not Wilmot was being sincere.
Wilmot claimed that he was due to receive a payout from overseas, but did not elaborate.
As his lawyer read out his lengthy guilty plea in the Port Elizabeth Commercial Crimes Court on Thursday, in which Wilmot admitted to squandering some of the money on funding his own lifestyle, several of his victims sat in court listening keenly.
One victim, who did not want to be named, said Wilmot had used their money to send his children to a prestigious private school and finance a fancy car for his wife.
In another case, a family member of one of the victims said her elderly mother had invested her life savings in the scheme and now had nothing, and was reliant on other family members to take care of her.
“It is very sad to see what has happened here,” the woman said.
“We have no hope of ever getting the money back.”
Wilmot ran a business which specialised in foreign exchange, trading under the name of Derrick Wilmot Investments (DWI).
Derrick is Wilmot’s brother and, according to the charge sheet, also lost R216,000.
The name of the business later changed to Novashore.
Prospective clients would ask Wilmot to invest funds on the forex market for them.
“Investments were structured either as fixed-term loan agreements to me or [the company], but on the basis that I would utilise the funds for trading on the forex market,” Wilmot explained in his statement read out by defence attorney Anlen Murray.
Wilmot made use of four bank accounts, two in his own name, one in his father Lysle’s name and another in his wife Mandy’s name.
Most of the funds transferred to the forex trading accounts were eventually repatriated to SA, and then transferred between the four bank accounts to conceal their whereabouts.
“During 2009, I decided to venture into foreign-exchange trading on behalf of other investors,” Wilmot said, adding that he had given prospective investors the impression that he was very successful and had made large profits.
Between January 2010 and June 2015, 48 investors handed over a total of R23.273m for investment.
But only R2.4m was actually transferred to overseas forex trading accounts, while the remaining R20m was used to make payments to other investors and pay for Wilmot’s living expenses.
The financial services board lodged an investigation into his business activities and it was established that he had provided advice to investors without the required licence.
It was also found that he had unlawfully used his father’s credit card, as well as his own credit card, on various occasions to export capital from South Africa to a number of foreign-currency trading sites.
An analysis of his trading accounts showed that none yielded a profitable result.
“After the [financial services board] investigation, I offered various false explanations, which were offered as excuses as to why I was unable to pay investors their returns,” Wilmot said.“Those excuses convinced investors not to request payment of their investments.”Then, in October 2013, Wilmot reached an agreement with an old client, Jonathan Fowke, to trade off of a forex trading platform in Fowke’s name to try to retrieve the investors’ lost funds by trading with fresh investments.Fowke also invested more than R1m.“I continued to accept fresh investments from the public with the promise to invest their funds by means of forex trading,” Wilmot said.He continuously assured investors that their investments were safe and increasing in value by providing them with fictitious documentation.His business was finally terminated at a meeting of investors in June 2015.Magistrate Hannes Claassen said that whether or not Wilmot managed to refund the complainants would influence his sentence.Van Zyl said he had no option but to give Wilmot an opportunity to pay back the money.Argument ahead of sentencing will be heard on October 9.Wilmot is out on bail of R10,000.