VBS scandal: Brains behind South Africa’s $130m ‘financial institution heist’ jailed

The person who masterminded a $130m (£100m) banking scandal that prompted nationwide outrage in South Africa has been jailed for 15 years, the nation’s police service has stated.

Tshifhiwa Matodzi was the chairperson of VBS Mutual Financial institution, which collapsed in 2018 after being looted for years.

The rip-off stretched from impoverished rural villages all the best way to authorities circles, and defrauded unusual South Africans.

In court docket on Wednesday, Matodzi pleaded responsible to 33 counts, together with corruption, theft, fraud, cash laundering, and racketeering.

The previous financial institution boss’s mixed sentence quantities to 495 years as he was handed 15 years for every rely. Nonetheless, the court docket ordered that the sentences run concurrently, which means he’ll serve 15 years in jail.

A report launched in 2018 after the central financial institution ordered an investigation into the scandal dubbed it the “the nice financial institution heist”.

For a few years, VBS was a distinctly modest entity – a mutual financial institution, largely owned by its depositors, that helped rural communities dwelling on land managed by conventional rulers to safe mortgages or save for household funerals.

However with staggering velocity, VBS was allegedly reworked right into a slush fund for corrupt politicians, native authorities leaders and their enterprise cronies – by means of a breathtakingly elaborate and cynical pyramid scheme.

The financial institution’s house owners had been accused of bribing native officers in a few of South Africa’s poorest and most dysfunctional municipalities – persuading them to divert, or to faux to divert, their budgets into VBS’s coffers in return for money and items.

It was solely as soon as VBS was put below the management of South Africa’s central financial institution that investigators found the complete extent of the alleged looting and political intrigue.

VBS was positioned into liquidation in November 2018.

Matodzi was accused of masterminding the looting, with the assist of a staff of extremely certified accountants and legal professionals, and a dizzying community of apparently fraudulent shell firms and subcontractors.

Though quite a few individuals had been arrested within the VBS case through the years, solely Matodzi and former VBS chief monetary officer Phillip Truter have been discovered responsible and sentenced.

South Africa’s elite Hawks police unit – the Directorate for Precedence Crime Investigation (DPCI) which is tasked with investigating corruption – stated additionally it is “pursuing different suspects” within the VBS case.