The Asset Forfeiture Unit (AFU) has been granted a preservation order to freeze the account of a company that ran a Ponzi scheme where people could buy pigs in a “Metaverse Piggy Farm”.
The National Prosecuting Authority (NPA) said its Pretoria AFU was granted a preservation order of over R43 million on Monday to freeze Piggy Farm Trading (Pty) Ltd’s bank account.
NPA’s regional spokesperson, Lumka Mahanjana, said the company ran a Ponzi scheme where people could purchase up to 50 virtual pigs at R2 750 per pig in a digital “Metaverse Piggy Farm”.
According to Built In, a metaverse is a network of shared, immersive virtual worlds where people can connect with friends, create and play games, work, and shop.
“As it is a virtual pig, the investment is risk-free because the pig gets substituted with another pig in the event it dies,” she said.
“In return for investment, the investor will be paid R550 per month for 12 months, and after 12 months, the pig will be returned to Piggy Farm Trading.”
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Complaints from investors
An investigation into Piggy Farm Trading was initiated by the National Consumer Commission (NCC) after the commission received complaints from investors.
It was discovered that the company operated a multiplication scheme that offered an effective interest rate of 140%, which exceeded the repo rate by more than 20% in contravention of the National Consumer Protection Act.
The investigation also revealed that the whole scheme was a fraud, as the name and location of the so-called farm were never revealed on the Piggy Farm Trading website or any of the social media platforms where they advertised.
Mahanjana said the company only refers to an address in the Durban CBD and different branches.
“It is, therefore, doubtful that a farm or even pigs, to the extent of the investments received, exist. The funds received as investments would suggest pig farming on a mega scale,” she said.
Ponzi scheme
As a result, the AFU came to the conclusion that the scheme had no underlying business model and that new investors were being paid off with proceeds from earlier investments.
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As of February, the Piggy Farm Trading business account held more than R16 million.
“This carries the hallmarks of a classic Ponzi scheme. The scheme is unsustainable as it is bound to implode when no new investors are forthcoming, with the majority of investors losing their money,” Mahanjana said.
The public has been cautioned not to participate in schemes like these, where the claimed investment returns far exceeds the interest rates provided by reputable institutions, said Martin Mafojane, the regional head of AFU in Pretoria.
Open criminal cases
Mafojane has also invited investors to open criminal cases against Piggy Farm Trading because the preservation order was issued in accordance with the application of POCA Chapter 6, which provides for asset recovery without requiring a conviction.
“This means that the AFU will not always wait for a prosecution and conviction to occur before taking away suspected proceeds of crime, as is the case with the traditional approach of Chapter 5 of the Act,” Mahanjana said.
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This news is republished from another source.
