AFU Granted a Preservation Order of Over R4,3 million Related to Piggy Farm Ponzi Scheme

ASSET FORFEITURE UNIT GRANTED A PRESERVATION ORDER OF OVER R4,3 MILLION RELATED TO PIGGY FARM PONZI SCHEME 

The Pretoria Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA) was granted a preservation order of over R4,3 million by the Pretoria High Court on 08 April 2024 to freeze a bank account belonging to Piggy Farm Trading (Pty) Ltd.  The Piggy Farm Trading company ran a Ponzi scheme where individuals could purchase up to 50 virtual pigs at R2750 per pig, in a digital “Metaverse Piggy Farm”. As it is a virtual pig, the investment is risk-free because the pig gets substituted with another pig in the event it dies. In return for investment, the investor will be paid R550 per month for 12 months, and after 12 months, the pig will be returned to Piggy Farm trading.  

After receiving complaints from investors, the National Consumer Commission (NCC) initiated an investigation into Piggy Farm Trading, where they discovered that the Farm Trading operated a multiplication scheme, which offered an effective interest rate of 140%, which exceeds the Repo Rate by more than 20%. This is a contravention of the National Consumer Protection Act. In addition, further investigations by the AFU revealed that the whole scheme appears to be a fraud. The name and /or location of the so-called farm is never revealed on the website of Piggy Farm Trading or any of the social platforms where they advertised the scheme. 

Piggy Farm only refers to an address in the Durban CBD and its different branches. It is therefore doubtful that a farm or even pigs, to the extent of the investments received, exist. The funds received as investments would suggest pig farming on a mega scale. The business account of Piggy Farm Trading held over R16 million as recently as February 2024. The AFU therefore concluded that there is no underlying business model and that incoming investors were paid from previous investments to keep the scheme going. This carries the hallmarks of a classic Ponzi scheme. The scheme is unsustainable as it is bound to implode when no new investors are forthcoming with the majority of investors losing their money.
 
The Regional Head of Pretoria AFU, Martin Mafojane welcomes the order and warns members of the public against investing in schemes like this, where the promised returns of investments far exceed the interest rates offered by reputable institutions. He also invites the investors to open criminal cases against the company, as the preservation order was granted pursuant to the implementation of Chapter 6 of POCA, which is a non-conviction-based approach to asset recovery. This means that the AFU will not always wait for a prosecution and conviction to occur before taking away suspected proceeds of crime, as is the case with the traditional approach of Chapter 5 of the Act.
 
Kind regards,
 
Lumka Mahanjana:
NPA Regional Spokesperson
Gauteng Division: Pretoria
073 002 0000 
lmahanjana@npa.gov.za