Regulator takes action against suspect home loan scheme

JOHANNESBURG - The National Credit Regulator (NCR) has instructed Ian McCabe and his lawyer associate Fritz Sonnenberg to refund all "deposits" they have accepted from hopeful borrowers.

Realestateweb has previously alerted readers of several warning signs relating to McCabe's home loan scheme. The most obvious was that it sounded too good to be true.

On Thursday NCR CEO Gabriel Davel issued a "notice of non-compliance" to McCabe, and the entities through which he has conducted business: Arctogen Investments, PKA Financial Services and Quickvest. The notice can be downloaded here.

At the time of writing, Sonnenberg and McCabe had not responded to a request for comment.

The notice accuses McCabe of breaching several sections of the National Credit Act. This contrasts sharply with what Sonnenberg has previously told Realestateweb, namely that his "client has complied with the provisions of the NCA".

Sonnenberg is a well known property attorney in Cape Town. He also owns a Seeff franchise. He describes himself as Arctogen's "bond registration attorney". By his own admission, Sonnenberg has accepted "deposits" of more than R1m from about 100 clients.

As an expert on the law and property transactions, it is difficult to imagine that Sonnenberg was unaware of his client's alleged contraventions.

The NCR accuses McCabe of the following contraventions:

• Providing credit under at least 100 agreements without registering with the National Credit Regulator;
• Using the number of another registered credit provider;
• Requiring clients to pay a deposit or fee which is not listed as a permissible fee or charge;
• Failure to properly assess clients' financial situations or their understanding of the risks and costs of the proposed loans;
• Failure to properly disclose the costs and details of the loan.

The NCR has told McCabe to refund all deposits made to him, Quickvest, Arctogen, PKA or Sonnenberg within 15 business days of receipt of the notice.

McCabe is required to furnish the NCR with proof of these refunds within 25 days of receipt of the notice.

Also involved in this scheme is Claudia MacBean, a broker who has been assisting McCabe in extracting "deposits" from clients. MacBean is the sole member of a close corporation that trades under the name M&S Financial Image Consultants. MacBean continued to encourage clients to pay deposits, even after it became impossible to ignore the home loan scheme's troubles.

Write to Julius Cobbett: julius@moneyweb.co.za

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responses to this article

Probably too late, my guess is cash has gone walkabouts! Probably too late, my guess is cash has gone walkabouts! by JSB on July 30 2010, 16:28 Find this comment inappropriate? Report it

MMMMmmm so they still have nothing on whether the scheme is sound or not. Violation of the NCA technicalities does not discredit the fundamental logic of the scheme. The NCA is a heavy handed piece of legislation we could do without. It probably violates more fundamental common law rights than it protects. Instead of picking . .more at these guys for violations that can easily e fixed, rather tell us if their business model works or not. If this info is not available it looks more like turf wars with the greedy banks backing the investigation. It is a lot like Old Mutual's complaint when an upstart named Arthur Brown took a large fund from under their noses. That too was all about petty regulation violations and not enough detail on the entreprenerial engine. . .less by Free the Rest on July 30 2010, 16:56 Find this comment inappropriate? Report it

@Free the Rest Hey Arthur, you still around? "entreprenerial engine" - good one. Sort of like Brett Kebble was a good guy and not a lowclass scumbag by Dinesh on July 30 2010, 21:08 Find this comment inappropriate? Report it

Give the money back now Why 15 working days? They should have the money and pay it back within 24 hours. 15 working days gives them a chance to declare bankruptcy and cook up all kinds of evasive schemes. Law always on crooks' side it seems. by Mr Bean on July 31 2010, 05:21 Find this comment inappropriate? Report it

What happened to "you are innocent until proven guilty" Trial in the media allows for anarchy. Arthur Brown has not been proven a crook and the entrepreneurial engine of his business has been usefully obscured. How come he was confident that he could meet his obligation and Ginwala could not. We do not know . .more how it was done and to what degree the FSB/NCA/ add any regulator blocked inventive progress. In other words, show us the regulation is not actually the crook in the woodpile. It could be. Technology evolves faster than regulation. The FSB, the NCA and really all regulation looks backwards as the players are moving into a new space. A simple example is the internet and the existence of Wiki Leaks. History gives us the pirate radio stations. This is the entrpreneurial engine moving to supply a market beyond regulation. Where it is not genuiniely harmful, most support it.....much like a certain nudist camp in the apartheid era. . .less by Free the Rest on July 31 2010, 08:03 Find this comment inappropriate? Report it

still willing to be taken for a ride? I am amazed there are still people out there willing to be taken for a financial ride. Sure in this day and age people should be wiser. What is wrong with people? You still have people investing in pyramid schemes; and now this? It just tells you I can . .more also devise a crooked scheme and extract money from these folks! Ag neee man!!! . .less by Dr Joe on August 02 2010, 09:47 Find this comment inappropriate? Report it

Fritz, remember to bring along Vaseline. by Mikey (from C-Max) on August 02 2010, 12:08 Find this comment inappropriate? Report it

@free the rest I am totally with you, why would they go to so much trouble to meet with the NCR and try and work around all the issues that have surfaced. If this was a scam, why don't they just up and go? Julius Cobbett' never makes sense anyhow. His allegations is . .more so contradictory that it is hard to say on which side of the line he is standing ( or is he just playing it safe, scared for that good old 'crimen injuria') Call me stupid, but I am quite willing to give these guys the benefit of the doubt. Like you said, innocent until proven guilty... . .less by Dumbo on August 05 2010, 14:56 Find this comment inappropriate? Report it

What is the position regarding intrest? Those monies accrued a lot of interest over the many months in the account of Sonnenberg! by B Julius on August 06 2010, 17:49 Find this comment inappropriate? Report it

Has Ian Mccabe refunded monies as instructed by NCR? There was also an article in the tabloid "Die Son" (2 Aug) about people having applied for loans from Arctogen. An amount of R40million is mentioned. Would like to see a follow up report. by watchful on August 19 2010, 09:27 Find this comment inappropriate? Report it

whats happened to Frits last I checked he still operates as a licensee of Seeff and Principal in Hout Bay, advising his agents on whats legal and or not. what is concerning is that Seeff allow him to still operate if his integrity is in question, and whats even worse . .more is that agents come to him for leadership and advice. I have personally dealt with Frits and his team a few times - a few cases are still pending - but its good to see that the chickens are coming home to roost. Ironically his agents in his office are not even aware of his involvement with Actogen - well not yet anyway until I email this to their office. nice job. Julius . .less by Hootie on August 23 2010, 21:24 Find this comment inappropriate? Report it

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