Even those investors who “got out early” can expect a claim for repayment from the liquidator, and a recent High Court judgment illustrates the dangers of investing in any scheme that looks suspiciously profitable, even if the investment is made entirely innocently (that is, without any knowledge that it is going into a pyramid scheme).

Ordering an investor to refund to the liquidator all monies that the scheme had distributed to him prior to liquidation (a total of R549.500, being both capital invested, and interest accrued thereon), the Court commented that it was irrelevant whether or not the investor “may have been unaware that an offence was being committed by the payer”.  The whole business activity of the scheme being unlawful, repayments could never have been made “in the ordinary course of business” (which would have validated them).

If an investment looks just a bit too profitable, tread very carefully – you risk losing it all!