BHI Ponzi: When the Scammer Scams the Scam-Spotter

By Chris Steyn

On 1 April 2021 an article by Michael Haldane of Global & Local The Investment Experts appeared on MoneyWeb.

It was titled: “How to spot investment scams : Take your time before making an investment decision and research what is being offered.”

Last week Haldane – the Global & Local Founder and Senior Investment Advisor – wrote a long letter to clients who had put money into the BHI Trust in which investors have lost billions.

Back in 2021 Haldane wrote: “Recently I have even heard of some investors who invest in Ponzi schemes knowing that this is what they are, and they have done this a number of times successfully and understand the risk of what they are investing in. A kind of professional Ponzi investor if you like! This is madness!

“I laughed when my wife and I were watching the series Downton Abbey when Lord Grantham, who has made some bad investments, is discussing the family’s financial affairs with his family members and mentions that a guy in the US is doing tremendously well for his investors, and the guy is called Charles Ponzi (the originator of the “Ponzi” scheme!).”

But Haldane could not have been laughing when he had to write to his clients last week.

“The allegations against Mr. Craig Warriner and the BHI Trust concern us, not just because of the uncertainty it has created for you, our valued clients, but also for many of our team members and their families, who have also invested their own personal funds with the BHI Trust.

“At the outset, we wish to indicate our shock and disbelief regarding the nature and character of the content of these media reports. Over the past two decades, the BHI Trust has proven to be a reliable and profitable investment option for our valuable clients, our families and us. All of us have not only seen significant and sustainable growth in our investments with BHI Trust but have also been able to consistently access and make use of those funds as and when necessary. Until now, we have had no reason to suspect any unlawfulness regarding the BHI Trust.”

However, Haldane continues: “To date, we can confirm that we have lodged criminal charges against Mr. Craig Warriner, based on the allegations in the several media reports that have come to our attention. We are also in the process of conducting an investigation to determine the ultimate fate of your and our investments in the BHI Trust, with a view of potentially instituting civil proceedings (if so advised in due course once we are appraised of all of the facts) and filing regulatory complaints against the BHI Trust and Mr. Craig Warriner with industry regulators, such as the FSCA, if so advised.”

In his 2021 piece of advice, Haldane still warned: “…when you are around a dinner table with friends or around a braai (we are South Africans after all!) and a friend tells you that he has just made an astronomical return on…..(add in here “forex-trading”; “cryptocurrencies” or trading shares in “X” company) be sceptical, very sceptical!

“…Do not take what a person tells you as the truth. Yes, it sometimes does happen but very rarely are these kinds of stories of fortunes made on speculative investments true.”

The BHI Trust has been provisionally liquidated with only R4 785 164.96 in its Nedbank Savings Account.

Meanwhile, Trustee and St Stithians College old boy Craig Warriner remains in custody after handing himself over to police and confessing to fraud. He is due back in court on 29 November.

It remains to be seen how many of his old school tie connections turn up. In the school’s response, St Stithians College Rector Celeste Gilardi wrote: “As many of you will be aware, in the past few days there have been news reports of an individual, a St Stithians College Alumnus, who through an investment vehicle, appears to have betrayed the trust of a significant number of financial investors and individuals, resulting in the loss of hundreds of millions of rands.”