Real Estate Investor Magazine South Africa July 2016 | Page 15

R

ael Levitt, the former CEO of Auction Alliance (AA),
recently lost his battle to prevent the Hawks from
investigating allegations of fraud, corruption and money
laundering against himself and the company he founded.
The judgment, handed down by the constitutional court
on the last day of March, dismissed the case on the
grounds that it bore no prospect of success.
What started it all was a dodgy auction conducted by the 44-year-old
Levitt at the end of 2011 when he apparently attempted to illegally drive
up the price of a wine farm that billionaire heiress Wendy Appelbaum
was bidding for.
Appelbaum found herself bidding against an unknown man from the
working class suburb of Bellville. When she questioned this, it transpired
she was the victim of so-called ghost bidding, the illegal trick through
which “plants” are placed on an auction floor to drive up prices, unknown
to the genuine bidder or potential buyer.
In the weeks that followed, a number of former AA staff co-operated
with the media to expose not only bid rigging, but allegations and
evidence of serious fraud and corruption that appeared commonplace in
AA.
As AA was then the country’s biggest auction firm by a large margin,
the amounts in question were substantial. By the end of that month,
Levitt had been forced to step down as AA’s CEO. Within a few short
months the company he had started in the 1990s had folded and the
Hawks were on his trail, probing what many believe could yet be the
largest case of financial wrongdoing in the history of the country, once
all is told.

Property Scams

Wherever there is money, there is a con artist trying to get in on the
action. There are numerous cons relating to property doing the rounds
and unfortunately as many people who fall for them. While it is often
assumed that scamsters target the vulnerable, this is not always the case
and anyone who doesn’t stop to think something through can be caught
out by these wily individuals.
The lesson to learn from this is to never, ever allow someone to take
possession of your property until the funds have been paid, regardless
of promises made. Even things that have been reduced to writing may
be motivated by false intentions and owners who simply take someone’s
word could end up losing hundreds of thousands of rands.
Of course, a well-intentioned buyer awaiting a bond will often take
early occupation and pay occupational rent. This is perfectly normal
and hundreds if not thousands of deals are made in this way. One of
the first things that should have rung alarm bells with the Cape Town
homeowner was the fact that the ‘buyer’ bypassed the agent as soon as
he had his foot in the door. In theory, buyers who are introduced to a
property by an agent should never attempt to conclude a deal without the
agent’s involvement - after all the buyer has nothing to lose by using an
agent, the seller pays his commission. Questions as to why a buyer is so
keen to bypass the agent as well as the urgency to move into the home
should be queried and if the deal is simply too good to be true, the seller
should walk away, regardless of how attractive the offer sounds.
www.reimag.co.za

JULY 2016 SA Real Estate Investor

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