Neil de Waal, a promoter for multi-level marketing scheme GS Partners (GSP), was granted R15 000 bail in the Benoni Magistrates Court last week after making an appearance on charges of fraud.

Netwerk24 reports that De Waal broke down in court on Thursday last week as he faced a charge of fraud brought by an investor from Benoni who allegedly lost R315 000 after depositing the sum into his personal bank account on promises of earning high and regular returns. The investor allegedly lost the investment.

Read: GS Partners not licensed to solicit investments in SA – FSCA

Though De Waal’s arrest warrant was reportedly issued in December 2023, he was only apprehended in Cape Town on 31 May 2024 on his return from a trip to Bali.

He appeared in the Bellville Magistrates Court in Cape Town before being transferred to Gauteng, where the charge was filed. The state opposed his bail application on the grounds that he is a flight risk and a suspect in another fraud case in Cape Town, and was therefore likely to commit further offences. The magistrate granted bail of R15 000 on condition that he report twice weekly to the police.

De Waal’s Instagram account, where he promoted schemes to earn passive income from digital assets, appears to have been scrubbed following his arrest.

The complainant in the case used a private investigator to locate De Waal, who was eventually apprehended in Cape Town several months after the arrest warrant was issued.

De Waal made extensive use of social media to promote various investment schemes, popping up in different parts of the world with other influencers and investment promoters.

He was an active promoter of GSP, also known as Gold Standard Partners, a company linked to metaverse NFT scheme Lydian World, which purportedly allows investors to acquire virtual real estate in a virtual world. Gold Standard Banking Corporation (GSB) is another affiliated company registered in Germany.

Read: Virtual real estate: New-age fad or feature of the future?

GSP has attracted the attention of law enforcement authorities in several countries, including Canada and several states in the US.

Warning

The Financial Sector Conduct Authority (FSCA) in SA issued a warning in November 2023, urging the public to be careful when dealing with GSP, which was not licensed to provide financial services and was offering unrealistic returns. Moneyweb understands that the FSCA is currently investigating alleged victims of GSP.

Read:
FSCA warns against dubious brokers, platforms offering easy money
FSCA cracks the enforcement whip … 1 668 times

The company used high-profile sports stars, among them former Springbok hero Victor Matfield and cricket icon Herschelle Gibbs, to market its investments.

As Moneyweb previously reported, The Texas State Securities Board issued a cease and desist order against the company in November 2023, highlighting this aspect of its marketing: “GSP has been claiming that various athletes have also endorsed, promoted or otherwise supported the investments, the operations of GSB Group, and/or Lydian World.

“These athletes include boxer Floyd Mayweather and footballers Roberto Carlos, Mario Yepes, David Trezeguet, Michel Salgado, and [former SA soccer star] Lucas Radebe.”

Also in November 2023, The Washington State Department of Financial Institutions (DFI) issued an emergency action against Swiss Valorem Bank, GSB Gold Standard Bank Ltd, founder Josip Heit, and promoter Stephn McNeal for violations of securities laws.

Netwerk24 says the case has been transferred to the regional court in Benoni, where De Waal will appear again on 25 June.

GSB fails in attempt to unmask ‘BehindMLM’

A court decision handed down by the New York County Supreme Court in May quashed an attempt by GSB to force Google and GoDaddy to furnish documents that would reveal the identity behind the website BehindMLM, which has a 14-year track record of exposing dodgy investment schemes that typically rely on multi-level marketing.

GSB claimed it had been defamed by BehindMLM and lost money as a result.

The court found that BehindMLM was protected by free speech rights in the US: “Upon our consideration of all relevant factors, including the weak evidentiary showing and BehindMLM’s asserted First Amendment right to speak anonymously on matters of public concern, we conclude that, on the record as now presented, BehindMLM is constitutionally entitled to maintain her anonymity.”

Suing for ‘defamation and loss of income’

GSB, its founder Heit and four South Africans associated with GS Partners – Tony De Gouveia, Bruce Hughes, Andrew Eaton and Brendon Earp-Jones – are suing three commentators appearing on the YouTube channel G-Crypt for defamation and loss of income to the tune of R476 million after they criticised the company’s investment offering.

The company and the plaintiffs say they suffered substantial income losses after the videos first appeared.

The G-Crypt activists have rebuffed an offer by GSB to settle, which required each party to pay their own costs and sign a non-disclosure agreement. Nel, Harris and Grobler are counter-suing GSP, seeking to have it declared an illegal scheme.

The case has entered the discovery phase, where each side is required to furnish documents requested by the other side.