Bank records admissible in N$4.3-million investment fraud trial

Bank account records and investment agreements obtained during an investigation of an alleged fraudulent investment scheme involving about N$4.3 million may be used as evidence in a trial in the Windhoek High Court, a judge has ruled.

Judge Naomi Shivute made the ruling on Thursday, following a hearing to determine if evidence collected by the Bank of Namibia (BoN) and the police during an investigation in 2019 is admissible in the trial of an alleged investment scheme operator, Sakaria Namwandi, and a close corporation of Namwandi.

Namwandi and close corporation Asset Legacy Investment, of which he is the sole member, are facing 123 counts of fraud, alternatively theft by false pretences, one charge of money laundering, a count of racketeering, a charge of conducting a banking business while not authorised in terms of the Banking Institutions Act, a count of conducting a Ponzi scheme, which is also an offence in terms of the Banking Institutions Act, and counts of fraud (tax evasion) and failure to pay tax.

Namwandi alone is also charged with one additional count of fraud (tax evasion) and a count of failing to pay tax.

Namwandi denied guilt on all of the charges when his trial started before Shivute in December 2022.

During the trial, defence lawyer Joseph Andreas objected to the use of bank account records and investment agreements as evidence in the trial.

The grounds on which Andreas objected to the evidence included claims that the bank records were obtained in violation of the constitutional right to privacy, without a search warrant and in contravention of a section of the Banking Institutions Act.

In her ruling, Shivute found that the BoN and the police did not obtain bank account records from Namwandi’s home, which would have been protected by the constitutional right to privacy. Shivute noted that the BoN analysed transactions done through the bank accounts of Namwandi and his close corporation after two commercial banks notified it of suspicious activities with the accounts.

The provisions of the Banking Institutions Act were not contravened when a central bank official was subsequently authorised by the bank’s board of directors to conduct a full investigation of the accounts, Shivute found.

She also ruled that although the police used an incorrect section of the Criminal Procedure Act to obtain account records from two banks, it would not render the trial unfair if those records are allowed as evidence in the trial.

The state is alleging that Namwandi and Asset Legacy Investment operated a Ponzi scheme, in which they solicited money from people by luring them with promises of unusually high returns on their investments and used later investors’ money to pay back earlier investors.

A total amount of about N$4.3 million was invested by more than 80 people who signed investment agreements with Asset Legacy Investment, according to the prosecution.

It is alleged that Namwandi and Asset Legacy Investment informed investors that invested funds would be traded on foreign currency trading platforms – which, however, did not occur.

They are also alleged to have promised investors that they would earn interest of 50% on their investments within a period of 30 working days.

The investment scheme was brought to a sudden halt when the bank accounts of Namwandi and his close corporation were frozen in October 2019.

Namwandi was arrested and charged in June 2020 and was granted bail in an amount of N$10 000 with his first appearance in court after his arrest.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.