A trio of “pastors” operated in top-notch hotels and at religious events in the US, claiming that their investment company was in keeping with “God’s mission” because it equated to personal wealth for churchgoers who signed up with it.
But several investors later lost their money – and some of it was allegedly used on personal private jet trips and to keep the investment company, which US authorities have labelled a $28-million Ponzi-type scheme, going.
Now, two of the “pastors,” Arley Ray Johnson and John Erasmus Frimpong are fraud convicts and jailbirds – Johnson was sentenced six-and-a-half years in prison in the US last month and Frimpong was due to be sentenced at the weekend.
The third “pastor”, Dennis Mbongeni Jali, is from KwaZulu-Natal, South Africa, where US authorities say he previously fled.
With the case against his two co-accused in the US nearly wrapped up, it seems authorities there may start turning their full focus on Jali who also faces legal issues in South Africa.According to the US Attorney’s Office for the District of Maryland, he is listed as an accused who is “detained pending extradition proceedings”.
This week, Gauteng’s National Prosecuting Authority was not able to respond to Daily Maverick questions about the status of a case against him, previously lodged in Johannesburg, by the time of publication. (This article will be updated when a response is received.)
Last week a Daily Maverick email query to an address listed for Jali bounced back, as did a message to a cellphone number linked to him.
A Facebook message about his stance on the legal action he faced was also not responded to.
‘Never worked a day in her life’
In what appears to be a promotional video posted online about four years ago, Jali described himself as follows: “I’m a friend, I’m a lover, I’m a father. I’m everything you imagine me to be as long as it’s good and its godly. That’s me, you’ll find me there. I’m a forex trader and I think I’m one of the best.”
Jali also implied he was such a successful forex trader that he was bringing in enough money so that “my wife has never worked a day in her life”.
On various social media platforms, he described himself as a prophet and preacher.
He appears to have authored a book titled My 1st Million Dollars: 8 Digits Achieved Through: 8 Principles Of Highly Successful Jet-Setting Millionaires.
A description of it on Amazon says: “How a young boy from South Africa raised by a single parent rose from dust to power in Forex Market and Private business. Raw gut This book will change your view of life.” (sic)
But, according to US authorities, Jali’s story is not a basic rags-to-riches one.
The US case in which he is an accused is linked to 1st Million Dollars, or 1st Million, a company Jali allegedly set up there in January 2017.
A US Justice Department statement issued last month when Johnson was sentenced said, according to evidence that surfaced during his trial, 1st Million “presented itself as a wealth management and financial literacy company, with its core business offering being a 12-month guaranteed investment contract”.
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It said the investment contract was along the lines that a “client’s principal would be invested in foreign currency or cryptocurrency and [this] guaranteed individuals who invested money with 1st Million monthly returns ranging from 6% to 35% of the initial investment”.
But it was the US state’s case that clients’ money was not invested as promised – some was pocketed and some was used to keep the scheme going and to repay older investors.
Living it up in America
The US’s Federal Bureau of Investigation previously publicised a questionnaire to try and track down 1st Million “victims.”
A 2020 US indictment against Jali, Johnson and Frimpong said Jali allegedly “recruited investors by misrepresenting his own personal wealth and exhibiting a lavish lifestyle that was purportedly paid from his successful currency trading on his own accounts when, in fact, his lavish lifestyle was paid for with diverted investor funds”.
Jali, according to the indictment, also allegedly spent $78,000 of investor money on private jets for some personal trips, $27,000 on an Audi vehicle and $20,000 on a Porsche.
The indictment detailed how Johnson, Frimpong and Jali allegedly wooed potential clients.
“[They] recruited victims to invest in 1st Million by holding promotional events at upscale hotels and event spaces, attending church-sponsored events intended to target investments from churchgoers, and representing themselves as religious men more interested in the philanthropic financial freedom of others than personal financial gain,” it said.
“[They] represented themselves as ‘pastors,’ and told prospective investors that 1st Million’s work was in furtherance of God’s mission in that it helped churches and their members achieve personal wealth and financial freedom.”
According to a US document detailing the complaints against them, by late 2018 Johnson knew “that Jali had been involved in an alleged fraudulent scam in South Africa”. Jali denied the claims and it was business as usual.
Bounced cheques, frozen accounts
But in 2019 1st Million was in irreparable trouble.
In April that year, according to the US complaint document, Johnson issued cheques worth about $700,000 to investors, but these bounced and some of the company’s bank accounts were frozen.
“On May 18, 2019, Jali and Frimpong invited investors to a meeting during which they announced the dissolution of the companies,” the document alleged.
“A few weeks later, Jali fled to South Africa.”
TimesLive reported that the Hawks had been after Jali since March 2018 (when he would have been in the US) in connection with an alleged investment scam that played out in this country involving money provided for vehicles that never materialised.
US and SA cases
It later reported that Jali was arrested in South Africa in August 2019 – he faced a local fraud matter as well as possible extradition to the US.
This is the backdrop against which the US case has been developing.
At the end of September last year, following a 10-day trial, Johnson was convicted of charges including conspiracy, wire fraud and securities fraud, in connection with the $28-million Ponzi scheme.
This was why he was sentenced to six-and-a-half years in jail in January.
Frimpong pleaded guilty to the charges he faced.
The US’s Commodity Futures Trading Commission was also taking civil action against Jali, Johnson and Frimpong.
It said it was seeking “full restitution to defrauded pool participants”. DM168
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25.