Louis Liebenberg’s diamonds a ‘blatant scam’ – analyst

Mining expert Peter Major said alleged Ponzi king Louis Liebenberg’s diamond scheme was blatantly and obviously a scam, with far-reaching implications for the wider mining regulatory environment.

Major’s comments come after Liebenberg and his wife were charged with corruption relating to an alleged scam they ran on Thursday, 31 October.

The two are accused of scamming investors out of more than R4 billion by allegedly luring investors with promises of lucrative returns from unpolished diamonds.

In an interview with SABC News, Major expressed disbelief at the scale of the scam, noting that the sheer audacity of the scheme was staggering. 

He questioned how such a significant amount of money could be raised through a seemingly transparent fraud.

“I can’t imagine how he was able to get that much money.  I remember watching Louis on Carte Blanche and the things he said – he had no shame, no qualms about what he was doing or how he was doing it,” Major said.

“I thought it was such a blatantly convoluted scam and scheme. I thought it was so obvious. Why did the Hawks take four years on this guy? It doesn’t make sense.”

He emphasized that the direct impact on the mining sector will likely be limited but said the scam raises serious concerns about the industry’s susceptibility to fraud and the effectiveness of regulatory oversight. 

He said it is important to provide financial education at a young age to prevent people from falling victim to scams like this.

In addition, he said the country needs a robust regulatory framework and increased public awareness to prevent such incidents.

For example, Major pointed to the relaxed mining regulations introduced after 1994 as a contributing factor to the rise of scams. 

The intention of these relaxations was to promote inclusivity and empower small-scale miners.

However, the unintended consequence has been a decline in regulatory oversight, creating opportunities for unscrupulous individuals to exploit loopholes.

To safeguard against such scams, Major urged investors to exercise caution and conduct thorough due diligence. 

He recommended consulting with reputable financial advisors and seeking advice from established diamond dealers. In addition, he said financial literacy and educating oneself is key to avoiding falling victim.

Background 

Liebenberg is allegedly at the centre of a high-profile diamond investment scandal involving fraud and money laundering.

His company, Tariomix, operated under the name Forever Diamonds and Gold, soliciting investments from thousands of people under the pretence of purchasing diamonds. 

Tariomix, which Liebenberg founded, bought and sold polished diamonds and financed diamond transactions.

However, it has been revealed that the venture was likely a Ponzi scheme, scamming investors out of over R4 billion since 2019.

In 2023, Tariomix was provisionally liquidated following an urgent application by two of its investors.

Meanwhile, Liebenberg’s accounts were frozen after a digital payment platform detected suspicious activities tied to the scheme, although some funds were released after a court challenge.

Liebenberg, who has faced multiple lawsuits, including defamation claims and investigations, was arrested in October along with his wife, Dezzi, and several other accomplices following a multi-year investigation by the Hawks. 

Their latest court appearance was on 31 October, where he was charged with two counts of corruption on top of the dozens of other charges he already faces, including multiple fraud, money laundering, and racketeering counts.

News24 reported that Liebenberg’s wife, Dezzi, was also charged with three counts of corruption.

Liebenberg has been notorious not only for his alleged involvement in this diamond investment scheme but also for his close relationship with former President Jacob Zuma. 

He reportedly contributed financially to Zuma’s legal battles, further tainting his reputation.