For a few years now, I've been perplexed by articles published by South African financial news service Moneyweb about Belvedere Management Group, which OffshoreAlert exposed as a global criminal financial enterprise in 2015.
Since OffshoreAlert's exposé, Moneyweb has gone out of its way to portray Belvedere and its principals, Irishman David Cosgrove and South African Cobus Kellermann, as innocent victims of an OffshoreAlert witch-hunt, culminating in an extraordinary article on September 6th that was headlined "The world's greatest Ponzi scheme that never was", with a sub-headline of "Cosgrove and Kellermann cleared in Guernsey".
The article was evidently based solely on an innocuous one-page letter five days earlier from the financial regulator in Guernsey, where Mauritius-based Belvedere had just a few of its dozens of companies, to various parties in Guernsey and South Africa that ended with: "The Commission has now taken the decision that these proceedings are at an end and that no further action will be taken in connection with those matters contained within the Enforcement Division's report."
The regulator didn't explain its decision but it might have been for no other reason than it was not prepared to continue with the expense of pursuing individuals who live outside the jurisdiction when it had already closed down Belvedere's operations in Guernsey, as well as its local corporate services provider, Lumiere Fund Services. Indeed, Guernsey Police subsequently criminally charged Lumiere's boss with a fraud unrelated to Belvedere and arrested several others, including one of the recipients of its Belvedere letter.
What the regulator actually thinks of Cosgrove, Kellermann and Belvedere, however, was clear in a 1,078-page affidavit, including exhibits, by one of its enforcement officers that was submitted to the Royal Court of Guernsey in 2015, with the regulator essentially concluding that Cosgrove and Kellermann had used their various companies to enrich themselves at the expense of investors through massive self-dealing, providing investors with false net asset values to cover up their actions.
Some of the findings were:
• There were "systemic failings in corporate governance and the application of law, regulation, code and principle to the management and function";
• "Mr Cosgrove in his actions does not appear to have displayed all of the attributes required of a director of a licensee to be fit and proper and has not even responded to the Commission's letter relating to proposed dates for an interview."; and
• There was an "unacceptable standard of corporate governance and questions over suitability and integrity pertaining to certain key individuals in the management and operation of the funds".
Meanwhile, in Mauritius, where Belvedere was headquartered and most of its companies domiciled, the Mauritius Financial Services Commission disqualified the following Belvedere officers and directors from holding corporate office: David Cosgrove, Francess Henriette Marie Michelle, Laval Law, Kenneth Maillard, and Rajindersingh Borthosow, and closed down the following Belvedere companies: Belvedere Management Limited, Belvedere Fiduciary Ltd., Belvedere Fund Manager Limited, RDL Management Ltd., CityGate Securities Limited, Lancelot Global PCC, The Four Elements PCC, Two Seasons PCC, Rejuvenation PCC Limited, Theseus Property Fund Ltd., and Venture Assets PCC. Indeed, 13 of the last 15 regulatory actions in 2016 all concerned Belvedere. It's worth pointing out that Mauritius took regulatory action against two Belvedere companies BEFORE OffshoreAlert exposed Belvedere in March of 2015. When disqualifying Cosgrove, the regulator stated that entities he controlled (in conjunction with Cobus Kellermann) had, among other things, engaged in "significant manipulation" of Net Asset Values, that directors had "served their own interests to the detriment of those of the investors" and that "a number of related party transactions ... were not carried out at arm's length but seemed to favour the borrowers to the detriment of the collective investment scheme".
In Cayman, the Cayman Islands Monetary Authority investigated and closed down Belvedere's Brighton SPC, determining that its flagship Kijani Commodity Fund had been a fraud "since inception", had never conducted a single commodities trade, that at least $83 million of investors' money had disappeared, and that redemptions were "met through proceeds of new subscriptions", which is the defining characteristic of a Ponzi scheme. If you don't believe me, see for yourself in the winding up petition and the first report of the liquidators.
In England, police raided the office of Belvedere-affiliate CWM and a lawsuit was subsequently filed by 318 clients who claimed to be victims of a £50 million Ponzi scheme.
And let's not forget the qualified audit of Belvedere's Four Elements Fund in 2013 in which auditor BDO determined that €33.8 million of claimed assets might not exist and an additional €32.9 million might not be recoverable.
Despite all of the above - and plenty more evidence that I'm leaving out (such as the Stellenbosch Farm Fake Valuation Scam), Moneyweb, through its editor Ryk Van Niekerk and reporter Patrick Cairns, has led its poor readers to believe there were no Ponzi schemes and the fraudsters are, in fact, fine fellows who, presumably, Moneyweb is happy for its readers to continue giving money to. Incredibly, Cairns even offered to apologize to Cosgrove - a banned company director, no less - if his reporting hadn't been flattering enough.
I was so incensed that I offered to publicly debate Moneyweb, Van Niekerk, and Cairns in a public forum on South African radio or TV, describing their journalism as the most irresponsible, incompetent and suspiciously false that I've come across in more than 30 years as a professional reporter. Unsurprisingly, Van Niekerk quickly declined, just as Moneyweb has declined my various offers over the years to provide them with evidence of fraud against their beloved heroes.
With news organizations like Moneyweb misinforming the public in markets not known for their financial sophistication, it's little wonder that fraudsters have a seemingly endless supply of investors to abuse.
