LEW GEFFEN SOTHEBY’s INVOLVED IN TRUST FUND FRAUD – NEW EVIDENCE FOLLOWING GEFFEN’S COVER-UP in MARCH 2011.

Sandy Geffen's email to their Accountant

On the 20 January 2011, a Whistle Blower’s report was submitted to the Estate Agency Affairs Board (EAAB) alerting them to the fraud surrounding the Lew Geffen Sotheby’s Trust account. The Whistle Blower explained how the fraud was committed by Lew Geffen Sotheby’s and said that the Sotheby’s case was no different to the Wendy Machnick fraud, which resulted in her being found guilty, for which she is currently out on bail pending her trial.

Soon after the Lew Geffen Sotheby’s investigation started in early 2011, Mrs Nomonde Mapetla, (CEO at the EAAB) was dismissed, so too was Mrs Lindiwe Bulo, the Compliance Executive handling the case; instead Clive Ashpol and close acquaintance of Lew Geffen was appointed as the new compliance officer at the EAAB. Clive Ashpol produced un-circulated minutes to exonerate Lew Geffen, subsequently stopping the independent investigation by Pasco.

Both Mrs Nomonde Mapetla and Mrs Lindiwe Bulo were shocked regarding the manner in which the cover up was orchestrated within the EAAB – furthermore, there has been no formal explanation regarding their sudden dismissal.

There has been another Whistle Blower’s report that has brought new light to the Geffen saga. In this latest report, the anonymous caller provided proof that Sandy Geffen, (director of Lew Geffen Estates), in an email to company’s auditor, instructed them to tidy up the Sotheby’s Trust account. This email was sent in March 2011. In Sandy’s email she says “ .. in case of inspection (by the EAAB), we should be aware of all discrepancies .. forewarned is forearmed”.

Sandy Geffen adds: “Before we do any transfer from Trust to Business to pay any creditors/agents this exercise must be redone again and I or Lew or Yael need to approve the transfer and sign it off”

The first Whistle Blower explained how the Lew Geffen Sotheby’s fraud was committed: “… when a person buys a house they deposit money into the trust account … it would amount to fraud if this money is used for anything either than for the acquisition of the house that the person was intending to purchase and if an estate agent is having problems in their business … they then use the trust fund money illegally to pay salaries, rent and their day to day operating costs”

Sandy concluded in her email to the auditor “The agents already want 60k from Bedfordview”. Trust accounts and money, under the law, may NOT be tampered with - they are to be held in a separate bespoke bank account and may only be used in the purchasing of a house, and most certainly there can be no transfers from the Trust account to Business account as Sandy Geffen warns her auditor to clean up.


There are a number of unanswered questions:

1. Where are the minutes of the Exco 14th February meeting Geffen reports took place, who signed them and what do they say?
2. What did the minutes of the 16th February Exco meeting record which resulting in the CEO shake up on the 17th February? 
3. What is the official reason for Nomonde Mapetla and Lindiwe Bulo sudden suspension on the 17th February, the day following the Exco decision to investigate Lew Geffen Estates? To date no official reason has been given, there has been no official enquiry and no disciplinary procedures have taken place.
4. Why was the official investigation by Pasco into the matter suddenly halted by Clive Ashpol?
5. Why has the EAAB not replied to the Whistle Blower’s report sent to them on 20th January 2011.
6. What cover up will Lew Geffen and the EAAB now come up further to Sandy Geffen’s email to their auditor regarding the transfer of funds from their Trust account to their business account?
7. Why is Minister Rob Davis protecting the EAAB, defending the likes of Sotheby’s and Seeff? 
8. There are numerous other Whistle Blower’s reports that have been ignored by the EAAB, yet the likes of small fish like Wendy Machnick are targeted, seemingly as scapegoats for the main perpetrators. Is this justice for all?

A house divided

Joan Muller Thursday, 15 Sep 2011

It seems that political in fighting between the new and old guard s at the Estate Agency Affairs Board (EAAB) is threatening to derail efforts to restore the credibility of SA’s beleaguered real estate industry.

The surprise two-month suspension and subsequent resignation of board chairman Thami Bolani for alleged irregularities — followed by the suspension of board spokesman Portia Mofikoe — appears to stem from unpopular decisions Bolani made in his efforts to turn the board around.

The acrimonious sacking of former CEO Nomonde Mapetla earlier this year was clearly one of them. At the time, Bolani maintained that Mapetla was fired because of gross mismanagement. Though Mapetla denied this, with suggestions that her suspension was linked to blowing the whistle on the Wendy Machanik trust fund scandal, a forensic report by Deloitte Risk Advisory leaked to the media last week appears to back Bolani’s claims.

Bolani, who also chairs the National Consumer Forum, denied any wrongdoing in his resignation letter to minister of trade & industry Rob Davies, of which the FM has a copy.

He hinted in the letter that allegations against him were prompted by the critical decisions he took during his tenure at the EAAB, and which made him a “number of enemies’’. Bolani said the way events unfolded in prior months made his position “untenable”.

In his resignation letter Bolani undertook to give his full co-operation to the two investigations against him — one by the department and another by the office of the public protector.

These relate to allegations that he did not disclose his financial interests in a private business venture. His interest in NCF Consulting Enterprises may have constituted a conflict of interest with his position at the EAAB .

Industry players fear that Bolani’s departure will further hamper the board’s operational efficiency. It’s no secret that the EAAB has in recent years bungled the capturing of industry data, which led to thousands of registered estate agents not receiving their fidelity fund certificates on time. Without these it is illegal for an estate agent to sell a property.

Estate agents say they were hopeful that the board’s administrative processes would be vastly improved under Bolani’s seemingly decisive leadership. Andrew Golding, president of the Institute of Estate Agents of SA, says it appeared that the board was making progress in this regard under Bolani . “This new development is a setback for the industry.’’

Though new appointments have been made at the EAAB in recent weeks, including that of former chief financial officer Bryan Chaplog as CEO and that of Tryphina Dube, former deputy chair, as acting chair , this has apparently created further friction among board members. Industry insiders say the board is divided into pro-Bolani and pro-Mapetla camps.

While the shenanigans at the EAAB appear never-ending, the real estate industry’s credibility continues to be eroded. Sean McCauley, a director of Rawson Properties, says the industry now needs stability more than ever.

One way to achieve this, he believes, is for the industry to start lobbying for self- regulation. The general view is that if the statutory body cannot even regulate itself, how can it be entrusted to regulate an industry that turns over around R120bn/year?

But self- regulation would mean, among other things , an overhaul of the Estate Agency Affairs Act, which dates back to 1976, and would no doubt be a long and laborious affair.

Security alert for head of estate agents watchdog

WERNER SWART and SASHNI PATHER | 27 February, 2011 00:04

Suspended Estate Agency Affairs Board CEO Nomonde Mapetla has been given 24-hour protection after a "threat assessment" determined that her life was in danger.

Mapetla, who has been instrumental in launching an anti-corruption campaign, was suspended last week.

A source close to the beleaguered CEO revealed that her dog was beaten and stabbed and left in front of her door several weeks ago - and unmarked cars have followed her.

In another incident, a senior manager at the EAAB, whose name is known to the Sunday Times, was also followed in a car, which then pulled up next to her. Men inside took photographs of her, apparently with the intention to intimidate her.

The EAAB said on Friday that Mapetla faced charges relating to "operational and governance issues", but she said she had yet to be informed of the case against her.

"I believe I am being vilified for doing my job," she said.

"When I joined the organisation, the board was over R7-million in debt. Since I took over, the board has had clean audits over the last six years, and now the system works."

She has sent EAAB chairman Thami Bolani a lawyer's letter, saying the board did not have the power to suspend her, as it was "improperly constituted".

The new board was appointed in January and consists of 11 members.

Mapetla pointed out that, in terms of the Estate Agency Affairs Act, "t he board shall consist of 15 members appointed by the minister".

The letter says : "Our client shares the widely held belief that her suspension is directly linked to the ongoing anti-corruption campaign which she has championed to clean up the industry, thereby stepping on some big and powerful toes who wield considerable influence and whose interest her inexplicable removal would obviously serve."

High-profile probes were recently launched against property doyenne Wendy Machanik, who has been accused of dipping into trust fund accounts. The EAAB won an interdict to stop her from trading, effectively shutting down operations . The matter returns to court in April.

Also under investigation is a fractional ownership scheme marketed by Seeff Properties. The Sunday Times recently revealed that shocked shareholders had discovered their luxurious holiday homes were heavily bonded without their knowledge.

And the Sunday Times has established that the EAAB recently received a whistle-blower's claim that property mogul Lew Geffen, the South African chairman of Sotheby's International Realty, was allegedly involved in trust fund account abuse.

Although a source claimed a decision to investigate Geffen was taken at an exco meeting, the EAAB board and Geffen have denied this.

Geffen said on Friday: "The minutes of the exco meeting to which you refer do not reflect any decision by the exco to investigate Lew Geffen Estates ... in fact, my attorney, Stephen Thomson, spoke with Mr Sigaba from EAAB exco, (who) was at the meeting held on February 14, and he denies that a decision was made to investigate Lew Geffen Estates."

He called on the EAAB to "immediately put an end to this matter or we will have no other choice but to legally force the board to audit our trust account without delay".

He claimed he was being used as a "scapegoat of internal politics in the EAAB". "All this unwarranted speculation is prompting unnecessary attention on my good name and my impeccable trading record."

Bolani responded to Mapetla's claims, saying: "The board has always had 11 members, and all decisions taken have been lawful. Not long ago, she (Mapetla) asked that her contract be extended another two years, and she didn't complain then because it benefited her."



George Nicholls, CEO of Pasco, which the board appointed to carry out investigations, confirmed that Mapetla had been given extra security.

The Sunday Times has learnt that "prominent estate agencies" are being inspected to protect the public's interests, more especially with the developments of luxury estates.

A source close to the investigation said: "These agents claim to be developers so that they can bypass regulations covered by the Estate Agency Affairs Act. We are also looking into how the sale of properties is being disguised to look like a loan and agents are taking their commissions off these loans, which is illegal."