South African Ponzi scheme masterminds nailed

Two key people behind the BHI Trust investment scheme – Michael Haldane and Mauro Forlin – have been debarred for 30 years from providing financial services.

The Financial Sector Conduct Authority (FSCA) published Haldane and Forlin’s debarment orders on its website last month.

The two men were key players enabling the BHI Trust, one of the biggest Ponzi schemes in South Africa’s history in which investors lost millions.

Craig Roy Warriner ran the trust. Dubbed South Africa’s Bernie Madoff, he used his strong social network to raise money from thousands of wealthy clients.

Warriner offered these wealthy clients three fictitious investment strategies: the BHI Strategy, BHI Plus, and the BHI International Strategy.

Warriner told his elite clientele that he was an expert day trader who focused on two stocks – BHP Billiton and Anglo American.

He claimed to “understand their price movements so well that he was guaranteed to make small profits daily, which were immediately banked”.

However, this was a smokescreen for his Ponzi scheme. In September 2020, the FSCA started investigating BHI Trust and Warriner.

The organisation’s financial analysis revealed significant wrongdoing. Of the R2.9 billion Warriner received from clients, only R584 million was invested in a legitimate investment vehicle.

The remaining 80% of the funds were held in a money market account, used to pay returns to other investors in a Ponzi scheme fashion.

The money held in the money market account was also used to fund Warriner’s extravagant lifestyle.

When the scheme collapsed, he surrendered himself to the SAPS on allegations of operating a fraudulent investment scheme.

The NPA, FSCA and SAPS collaborated on the case, and Warriner was found guilty of 207 counts of fraud and sentenced to 537 years of imprisonment.

However, because many of his sentences run concurrently, Warriner faces an effective imprisonment of 25 years.

In May 2024, the FSCA banned Warriner from providing financial services to individuals and companies.

Industry expert Magnus Heystek explains

Warriner did not act alone to enable the BHI Trust. Many advisors worked closely with him to move money into the trust.

Two of these key enablers were Haldane and Forlin, which is why the FSCA debarred them for 30 years from providing financial services.

Brenthurst Wealth Management director and founder Magnus Heystek told Biznews that these two individuals essentially received life sentences.

“The BHI Trust and the individuals involved were very naughty guys. They’ve been stealing and siphoning money for many years,” he said.

Heystek added that he was surprised that it took so long for this extensive Ponzi scheme to be exposed.

“We picked this up many years ago. We looked at it, and we walked away. We removed many clients from the scheme,” Heystek said.

He added that it was not the promise of exceptional returns that attracted many rich people to the BHI Trust scheme.

Instead, it was the promise that the returns would be tax-free money. Heystek said they whispered to their clients that the returns would not be reported to SARS.

“People would look at you and say, well, we don’t pay tax on those investments because it’s a trust and the usual spin story,” Heystek said.

“I think the tax angle was one reason people stood in a queue to hand over their money to these players.”

Although Warriner ran the BHI Trust, Heystek said Haldane and Forlin were prominent financial advisors promoting the scheme.

“They appeared in the media, in various outlets, and had very aggressive advertising. They had a big business,” he said.

“But behind the scenes, we know they were naughty guys, and the FSCA rightly stepped up and slapped them with a big fine.”

There are also criminal proceedings on the way regarding the BHI Trust against people other than Warriner.