The criminal mastermind who was fined R197 million for selling a product that does not exist

Jacobus Meyer and his company, Medbond Insurance Brokers, were fined R197 million for selling a fixed-term group variable annuity (GVA) product that did not exist.

The fine was handed down by the Financial Sector Conduct Authority (FSCA) following a four-year investigation into Medbond’s scheme.

The details of this investigation were included as a case study in the FSCA’s 2026 Regulatory Actions Report, which detailed how Meyer and his associates orchestrated their scheme.

The financial sector watchdog started looking into Medbond after receiving multiple complaints from investors.

The complainants questioned the legitimacy of investments facilitated by Medbond Insurance, prompting the FSCA to launch a comprehensive investigation.

Medbond was founded in 2013 by a group marketing themselves as experienced investment bankers and insurance specialists. 

It positioned itself as a boutique financial advisory firm that could offer clients advice on anything from insurance to investments.

Initially, the business functioned as a standard financial advisory firm with legitimate licensing. It was even registered with the FSCA to offer financial advice, intermediary services, and discretionary fund management.

However, in August 2021, the FSCA provisionally withdrew these licenses after it started to look into Medbond’s operations following investor complaints.

The FSCA’s investigation spanned four years and revealed a deliberate and coordinated scheme whereby Medbond clients were urged to invest in a supposed fixed-term GVA product.

Medbond told clients that this product was issued by a Bermuda-based insurer called Lombard International Life.

However, this product did not exist, and the clients’ funds were never invested. Instead, the FSCA found that Medbond had systematically misappropriated its clients’ money.

The FSCA also spoke to Lombard International, which confirmed that it had not issued any such product to Medbond entities and held no client funds on their behalf.

FSCA fines and debarments

The FSCA found out that Meyer played a central role in orchestrating the Medbond scheme. 

The watchdog identified Meyer as the “controlling mind” behind the Medbond entities: he directed operations and developed and approved misleading marketing material.

He also trained staff to promote a non-existent investment product and sell it to Medbond clients. This was done through multiple entities, including Medbond Fund Managers, Medbond Markets, Masjamplan, and Qbit.

The FSCA said Meyer used these entities to create a “façade of legitimacy”, giving clients the impression that legitimate, licensed financial services were being rendered. 

Meanwhile, Medbond client funds were being channelled into accounts controlled by these entities, over which Meyer exercised sole signatory authority.

Then the FSCA came into contact with Frederick van Heerden, a key individual at Medbond Insurance.

Van Heerden assisted the FSCA with its investigation and provided extensive and material cooperation that helped the regulator to uncover Medbond’s scheme. 

The FSCA said Van Heerden’s evidence was “instrumental” in clarifying the operational structure of the scheme and quantifying the extent of client losses.

“The evidence indicated that Mr Van Heerden had entrusted his own personal investments to Mr Meyer, supporting the conclusion that he was not aware of the misappropriation,” the FSCA said. 

When the FSCA’s investigation was concluded, it handed down severe punishments to Meyer and the Medbond group.

To start with, Meyer and Van Heerden were both debarred for 30 and four years, respectively.

The FSCA also imposed a R197 million fine on Meyer and Medbond Insurance, along with a fine of R5 million each on Medbond Markets, Masjamplan, and Medbond Fund Managers.

The regulator also withdrew the FSP licences of Medbond Insurance and Medbond Markets.

“The Medbond matter represents a significant enforcement outcome, both in scale and in its implications for market integrity,” the FSCA said. 

“Investors suffered losses of approximately R194 million as a result of being misled into subscribing to a non-existent financial product.” 

“The case underscores the severe harm that can arise where trust is exploited, and product misrepresentation occurs.”