Jail time for R11,5 million ponzi schemer

4 October 2023

The Durban Specialised Commercial Crimes Court has sentenced Patrick Stapleton (66) to 10 years direct imprisonment, following his conviction on 147 counts of fraud as well as one count each of contravention of the Banks Act, and contravention of the Financial Advisory and Intermediary Services (FAIS) Act. His company Dynamic Group CC was also convicted of one count each, of contravention of the Banks Act and contravention of the Financial Advisory and Intermediary Services (FAIS) Act; and sentenced to a fine of R10 000 for each count. Each fine was suspended for a period of three years.

Between 2008 and 2014, Stapleton operated a Ponzi scheme together with his son, Michael Stapleton. Working from their office in Hillcrest, they approached factory employees who were either being retrenched or were retiring. They mispresented to these people that they (the Stapletons) were involved in the research and development of an off-road mining motor vehicle and a paint business known as Umbala Paints. They convinced 147 investors to invest with them, promising very high monthly returns on the investments. Most of the investors were manual workers who invested their retirement funds, retrenchment and/or severance packages with the Stapletons, to the total amount of R11.5 million.

The men were arrested in 2017 and Michael, who pleaded guilty in 2019, was sentenced to five years imprisonment in terms of Section 276 (1) (i) of the Criminal Procedure Act. In court, the prosecutor, Sara Parak, led the testimonies of the complainants as well as the evidence of forensic auditors.

Stapleton was sentenced to 10 years imprisonment for the 58 counts of fraud (all taken as one for the purpose of sentencing), which involved amounts of R100 000 or more (and which would ordinarily attract a minimum sentence of 10 years imprisonment each). He was sentenced to eight years imprisonment for the 89 counts of fraud, all taken as one for purpose of sentencing, which involved amounts of under R100 000. For the charges of contravening the Banks Act and the FAIS Act, Stapleton was sentenced to two years imprisonment on each count. The court ordered that the sentences run concurrently, resulting in the effective sentence of 10 years imprisonment.

The NPA welcomes the successful finalisation of this matter. We congratulate the prosecution and the DPCI on a job well done, in holding the accused accountable for their actions.

Issued by Natasha Kara, Regional Spokesperson: DPP KZN, 4 October 2023