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David MarchantEditor at OffshoreAlert
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With news services like South Africa's Moneyweb, no wonder fraudsters thrive

September 08, 2017 by David Marchant 7 Comments

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.

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7 COMMENTS

  • Patrick Cairns
    By Patrick Cairnson Friday, September 8, 2017 12:58:27 PM

    Hi David Nice blog. Just one point. I didn't, of course, only rely on the letter from the GFSC. That would be irresponsible.

      Replies(2)
      • David Marchant

        You do know, right, that Cosgrove and Kellermann are laughing at you behind your back? I'm sure they can't believe they found a journalist gullible enough to believe their nonsense.

        • David Marchant

          Who knows what you relied on, certainly not your readers. To determine, as you clearly have done, that Cosgrove, Kellermann and Belvedere did not commit wholesale fraud and did not operate Ponzi schemes is incompetent beyond belief. It's like this scene the 'Naked Gun' movie: https://www.youtube.com/watch?v=5NNOrp_83RU

        • Ipie
          By Ipieon Monday, September 11, 2017 4:53:57 AM

          Wow, a quite astounding failure to understand the facts and to justify your fake news, Mr. Marchant. The first rule for a proper journalist is not to become the story. You have failed dismally in this regard. "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" Had you bothered to do proper research, you would have seen that two of the accused individuals still live in Guernsey. "What the regulator actually thinks of Cosgrove, Kellermann and Belvedere, however, was clear in a 1,078-page affidavit" This statement is totally false and shows a profound lack of understanding for regulatory process. The regulator spent two years conducting an investigation of each of the facts set out in the initial affidavit and conducted a hearing to test each of those facts. That is a far more detailed process than you have been through. The necessary implication of the regulator abandoning the process is that the statements made in the affidavit did not stand up to scrutiny. Because the regulator made no findings of fact, the implication must be that none of the evidence in the affidavit stood up to scrutiny and it is all false. This is the necessary implication of a not guilty finding in any criminal case. You cannot say that an individual is guilty because the prosecution said they were guilty when it commenced its case. All that counts is the finding at the end of the process. These individuals (not just Kellermann and Cosgrove by the way) have all been found not guilty and for you to imply anything else is not only irresponsible but shows total incompetence. "Mauritius" It is public record that the decisions of the Mauritius regulators are being reviewed by the Mauritian courts. It seems rather premature of you to make statements in this regard knowing that no final decision has been reached. You have stated that it was "confirmed" that there was a $4Bn Ponzi Scheme in this case. The numbers you mention above do not add up to $4Bn even if they are correct. Your refusal to admit any errors whatsoever in your reporting illustrates what is really going on here. You have become the story. It is vital for your reputation and your livelihood that you find some way of justifying the unjustifiable. Your desperate attempts to grab attention lead you to embellishment that has painted you into a corner. By portraying yourself as a soothsaying crusader, you became fake news. What is truly ironic is that the Guernsey entity you said was a Ponzi Scheme has now been shown not to be so. Investors have however lost millions as a result of their assets being frozen throughout this process. You claim, with your fake news, to have tipped off the regulator in Guernsey to the Ponzi Scheme that wasn't. So in fact, if anyone mentioned in this post bears any responsibility for the money that investors have actually lost in this case, it is you.

            Replies(1)
            • David Marchant

              Re. "You have stated that it was "confirmed" that there was a $4Bn Ponzi Scheme in this case. The numbers you mention above do not add up to $4Bn even if they are correct." Neither I nor OffshoreAlert have ever stated there was a $4 billion Ponzi scheme in relation to Belvedere. You've literally made this up. Re. "What is truly ironic is that the Guernsey entity you said was a Ponzi Scheme has now been shown not to be so." Neither I nor OffshoreAlert have ever stated that any Guernsey entity was a Ponzi scheme in relation to Belvedere. You've literally made this up. "You claim, with your fake news, to have tipped off the regulator in Guernsey to the Ponzi Scheme that wasn't." Neither I nor OffshoreAlert have claimed to have tipped off the Guernsey regulator to a Ponzi scheme. You've literally made this up. Re. "Your refusal to admit any errors whatsoever in your reporting illustrates what is really going on here." The errors are yours. You have literally invented falsehoods, attributed them to OffshoreAlert, and then held them out to be ... er ... false. Your claim that Kellermann, Cosgrove and others "have all been found not guilty" is not supported by any evidence. Regulators don't determine 'guilt' - that's a criminal term. And if Nicholas Peacock QC, who was appointed to hear the evidence, made a finding of 'not proven', why haven't Cosgrove and Kellermann released it? All they released was an innocuous one-page letter stating that "the proceedings are at an end". It shows how desperate Cosgrove and Kellermann are for even a snippet of good news that they're parlaying that up into a finding of 'not guilty' of any wrongdoing, not just in Guernsey but anywhere in the world.

            • David Marchant
              By David Marchanton Monday, September 11, 2017 7:53:47 PM

              I was interviewed about the Belvedere fraud today on the South African radio program 'The Money Show With Bruce Whitfield'. You can listen to it at https://omny.fm/shows/the-money-show/11-september-2017. The interview starts at 36 minutes.

                Replies(2)
                • David Marchant

                  Re. "You had no answer to the point about Guernsey residents being respondents. I take it then that you admit your incompetence in not noticing this obvious fact." That's too stupid for me to respond to. It's extremely tedious to go through abject nonsense line by line, responding to every moronic comment. You confused 4 billion Rand with 52 billion Rand. You're not Belvedere's auditor by any chance? (Of course not, you're more likely David Cosgrove or Cobus Kellermann cowering behind anonymity). You made a 48 billion Rand mistake and then, bizarrely, ask why I didn't correct the accurate information that was contained on the Biznews website. It's beyond stupid. In the interview with BizNews whose link you provided, I broke down the 4 billion Rand (not the 52 billion Rand that you invented) during the interview and I've broken down part of the amount in the blog above. And, for the umpteenth time, OffshoreAlert never stated that "Belvedere was a Ponzi scheme"; Instead, we described Belvedere as a "one of the world's biggest criminal financial enterprises", comprising many different types of frauds, e.g. calculation of false NAVs, self-dealing, conflicts of interest and abuse thereof, operation of Ponzi schemes. Stating that "Belvedere operates Ponzi schemes" is materially different to stating that "Belvedere is a Ponzi scheme". This should not be hard to follow. The only thing 'clear' about your statement that "You clearly said that "Belvedere" was a Ponzi Scheme" is that your statement is clearly false. In conclusion, Cosgrove and Kellermann claim to have been cleared in Guernsey: in that case, why don't they release the findings of Nicholas Peacock QC who oversaw the hearing in February? If they had a finding that cleared them, don't you think they would have released it in double-quick time?

                  • Ipie

                    You had no answer to the point about Guernsey residents being respondents. I take it then that you admit your incompetence in not noticing this obvious fact. I find it ironic that you are now playing lawyer, trying to hide behind technicalities. You clearly said that "Belvedere" was a Ponzi Scheme and Belvedere was referred to as a group of which a massive part was based in Guernsey. Your attempt to shift the focus to Mauritius as if you were never concerned with Guernsey, Strategic Growth Fund, Lancelot etc. is laughable. Here is the interview regarding the R4Bn comment. You can of course split hairs and say that I got the currency wrong. Or perhaps you want to say that you were repeating someone else's statement that a loss was "confirmed" (namely your partner in crime Alec Hogg). I think most people will recognise that as legal speak unbecoming of a "journalist". http://www.biznews.com/belvedere/2015/10/08/belvedere-ponzi-latest-officially-confirmed-r4bn-stolen-from-investors-is-tip-of-iceberg/ You had ample opportunity to set Mr Hogg straight if you didn't wish to be associated with that statement. Besides which do you really wish to now say that you never thought there was anything dodgy happening in Guernsey? Where precisely was the Ponzi Scheme you referred to then and how big do you now wish to say it was? Once again you are playing lawyer if you expect us to believe that when you referred to the Belvedere Ponzi Scheme what you really meant was no entity in Guernsey and perhaps just a single entity which you yourself say was not managed by Kellermann or Cosgrove. For someone who claims to be a regulatory expert to even suggest that the Yabsley affidavit has any value at this point is truly astounding. It cannot be that you are so dumb to suggest that the charge sheet (the Yabsley affidavit) is still valid after the accused has been found not guilty. Again, attempting to distinguish between the Guernsey process and criminal law is playing lawyer. The Guernsey process is indistinguishable from a criminal trial. By your logic no person can ever be found not guilty of any charges brought against them because Mr Marchant will keep referring to the founding affidavit to prove their guilt even after they've been exonerated. You cannot be that dumb nor can you be dumb enough not to understand that a single paragraph in a letter from the regulator is precisely what anyone who is 100% exonerated ever gets. So what is your agenda? I hope it is just to attempt to save your sullied reputation. Once again you become lawyerly when you make your inane point about no "further" action being taken by the GFSC. You just casually omit to mention that no action whatsoever has been taken to date by the GFSC against Cosgrove or Kellermann. You try to create the impression that Guernsey is happy with what they've already done when they have in fact done nothing against the individuals and when whatever they might have done against the entities could be overturned. You now desperately cling to the process in Mauritius because that is all that is left for you. But the reality is that the actions that have been taken there are all under review. No final decisions have been reached. The only final decision we have is the one in Guernsey and spin it as much as you like, the fact is you were 100% wrong. Your shameful, xenophobic attacks on the South African press are also backfiring as it becomes more and more clear that the real journalists are sitting in deepest darkest third world Africa. We now all know where the fake news capital of the world is - hint, Miami is a city there.

                  • David Marchant
                    By David Marchanton Thursday, September 14, 2017 4:00:25 PM

                    Patrick Cairns has published yet another absurd story about David Cosgrove and Cobus Kellermann, see https://www.moneyweb.co.za/in-depth/investigations/kellermann-and-cosgrove-whats-next/. I tried to post a comment underneath the story a few days ago but it hasn't been published and there are currently zero comments so, it seems, commenting on his nonsense isn't allowed, hence this post on my own firm's website. Without producing any evidence to back it up, Cairns claims that the Guernsey Financial Services Commission "found no grounds to take any action" against his heroes and, when writing about the Kijani Commodity Fund, manages to pull off the extraordinary feat of not mentioning that Cayman regulators have found that over $80 million has disappeared and concluded that it was a fraud "since inception" and hadn't conducted a single commodities trade. Patrick wants you to believe that Cosgrove and Kellermann had little or nothing to do with the scam. It's extraordinarily shameless journalism at its worst. The most suspicious reporting of any fraud by someone masquerading as an independent reporter that I've ever encountered.

                    • David Marchant
                      By David Marchanton Sunday, September 17, 2017 9:38:45 AM

                      Moneyweb broadcast an interview with David Cosgrove, which can be listened to at https://www.moneyweb.co.za/in-depth/investigations/the-last-sword-for-kellermann-and-cosgrove/. There's also a transcript. Below are my comments that I posted underneath the interview a few days ago but Moneyweb, to this point, has not published it. Moneyweb apparently considers it acceptable for people to anonymously post nonsense attacking me and OffshoreAlert but it's not acceptable for me to post facts in my own name. This is what I posted (but has not been published) __ So much nonsense. I can literally produce many hundreds of pages from regulators in at least three jurisdictions (Mauritius, Cayman Islands and Guernsey) who found substantial evidence of wrongdoing against Cosgrove, Kellermann and/or Belvedere. Many of these documents are available for free on OffshoreAlert's website. Cosgrove, on the other hand, cannot produce a single document from any regulator anywhere in the world that 'clears' him of wrongdoing. You'e just going to have to take his word for him when he says he's been cleared. Cosgrove claims or otherwise creates the impression that regulators did little or no research of their own but simply accepted OffshoreAlert's articles as fact, which is contradicted by common sense and a mountain of evidence, not least of which is the fact that the Mauritius Financial Services Commission issued public warnings against Four elements PCC and Lancelot Global PCC on October 20, 2014 , which was FIVE MONTHS before OffshoreAlert exposed Belvedere. The regulator stated that the warning against each company was based on "the findings of the investigation conducted at the registered office of the Company". In Cayman, meanwhile, the Cayman Islands Monetary Authority appointed PwC "to perform a forensic examination" of Brighton SPC, of which Kijani Commodity Fund was by far the biggest component, to assess the accuracy of OffshoreAlert's allegations. After completing its examination, PwC came to the same conclusions as OffshoreAlert and CIMA petitioned Brighton into liquidation. CIMA/PwC stated that Kijani had moved to Cayman in November 2014 (one month after being shut down in Mauritius, where it was managed and administered by Belvedere). Even after moving to Cayman, the investment adviser was DRSL Management Limited and the sub-administrator was Belvedere Management Services Limited, as stated in CIMA's winding up petition. As the Guernsey Financial Services Commission determined in a report into Belvedere, Cosgrove "clearly sits behind" DRSL. For Cosgrove to claim or imply that Belvedere had little or nothing to do with Kijani after it left Mauritius is not accurate and, in any event, irrelevant because PwC concluded it had been a fraud "since inception" and that it had been operated as a Ponzi scheme and that more than $80 million is missing. All or most of the above is confirmed in regulatory findings which are available on OffshoreAlert's website, several of which I recently made available for free to counter misinformation that is being published. For Cosgrove or Moneyweb to claim or create the impression that Cosgrove, Kellermann and/or Belvedere have been 'cleared' or that they've been mistreated is not supported by any credible evidence. There is, however, a plethora evidence to the contrary.

                      • Silograms77
                        By Silograms77on Thursday, September 21, 2017 4:39:21 AM

                        As someone who introduced clients to Belvedere and associated parties (and who have lost their pension money); my question is : "To what extent were certain of the Banks in Mauritius complicit with what went on with Belvedere ?" I am aware of 1 mainstream foreign bank with a significant presence in Mauritius who didn't comply with what the Authorities say are the normal "warning signals" and are now hiding behind client confidentiality and a "sue me" approach...

                          Replies(4)
                          • David Marchant

                            Re ""Belvedere" was not in the investment management business and did not control investor fund", so what do you think Belvedere Fund Manager Limited did for a living, or RDL Management Ltd., to name but a few? How can you be so ignorant? If you don't have a clue about what happened, why even comment?

                            • David Marchant

                              Re. "...we now know that (a) "Belvedere" as Mr Marchant describes it never existed; and (b) the organisation that Cosgrove and Kellermann operated consisted of service providers to funds, i.e."Belvedere" was not in the investment management business and did not control investor funds. " There were several companies called 'Belvedere' and several companies within the group, some of which were indeed investment managers. In fact, Belvedere managed funds that it also administered, which is a massive red flag. Your ignorance and lack of comprehension of Belvedere is astonishing.

                              • Ipie

                                Your statement that you introduced clients to Belvedere who lost their pension money is quite obviously nonsense because we now know that (a) "Belvedere" as Mr Marchant describes it never existed; and (b) the organisation that Cosgrove and Kellermann operated consisted of service providers to funds, i.e."Belvedere" was not in the investment management business and did not control investor funds. That leaves your reference to people "associated with Belvedere" meaning clients of Belvedere, i.e. people like DeVere who used the "Belvedere" infrastructure to control their clients' money (and take fees). The real journalists have revealed that Strategic Growth Fund was managed and controlled by DeVere and was available only to DeVere clients. DeVere took the investment decisions and if client money is missing, the questions should be posed of DeVere. Perhaps the decisions were simply uninspired and not fraudulent? Perhaps the real issue is the one the regulators are investigating - not that the investments were fraudulent but that the layers of fees were not disclosed. Other journalists have noted that DeVere attempted to misrepresent their role in Strategic Growth Fund claiming that Belvedere was the manager and they were merely the salesman when in fact the manager was a company owned and managed by Nigel Green. When this came out, Mr Marchant looked the other way. Rather than admitting that he got the wrong end of the stick multiple times on this, he harks back to documents that regulators have already looked at and rejected. Who should we trust more to have uncovered the truth - the Guernsey regulator who has vast resources and spent millions of pounds of taxpayer money over a period of years or Marchant? And then his office supplies company has the gall to attack real journalists who have actually done their homework!

                                • David Marchant

                                  I'm not familiar with the liability laws in Mauritius regarding banks and other service providers. Even if a lawsuit was viable, I'm not sure there's any or sufficient cash available in the Belvedere estate for liquidators to sue anyone. Liquidators might defer their compensation if there's a reasonable prospect of recovery. Have you been in contact with the liquidators of the vehicle through which your clients lost money? FYI, we have a session on the liability of service providers in investment fraud schemes at our upcoming London conference.

                                • SGF Victim
                                  By SGF Victimon Saturday, October 21, 2017 12:38:48 PM

                                  As ever in this story fleeced investors like me are the very last to know. I lost long term savings through the SGF , and ever since the fund went "illiquid" in 2013 have managed to figure out what happened to my money , with utterly no help from the numerous companies involved . Finally promised a report from Guernsey Finance Authority by end of this year, but today see by chance the article in Moneyweb which does not correspond to any facts other than perhaps the failure to prosecute . So dear friends to avoid the endless semantics , could who ever knows the truth answer this question ? If D C and JK are completely innocent , why is it that 70 % of the $80 million were diverted from legitimate funds into Baselius and Bk One , both now bankrupt , but in which both these gentlemen had a personal stake ? If they did not do it then who did ? This case never was a Ponzi ( other than contributing to the proven Baselius Ponzi before the murder and suicide) IT WAS AND IS THEFT , so where when and how will poor mugs like me get some justice!!

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