Brains behind South Africa's $130m bank scandal jailed

South African bank notes
A report released in 2018 after the central bank ordered an investigation into the scandal dubbed it "the great bank heist" [Getty Images]

The man who masterminded a $130m (£100m) banking scandal that caused national outrage in South Africa has been jailed for 15 years, the country's police service has said.

Tshifhiwa Matodzi was the chairperson of VBS Mutual Bank, which collapsed in 2018 after being looted for years.

The scam stretched from impoverished rural villages all the way to government circles, and defrauded ordinary South Africans.

In court on Wednesday, Matodzi pleaded guilty to 33 counts, including corruption, theft, fraud, money laundering, and racketeering.

The former bank boss's combined sentence amounts to 495 years as he was handed 15 years for each count. However, the court ordered that the sentences run concurrently, meaning he will serve 15 years in jail.

A report released in 2018 after the central bank ordered an investigation into the scandal dubbed it the "the great bank heist".

For many years, VBS was a distinctly modest entity - a mutual bank, largely owned by its depositors, that helped rural communities living on land controlled by traditional rulers to secure mortgages or save for family funerals.

But with staggering speed, VBS was allegedly transformed into a slush fund for corrupt politicians, local government leaders and their business cronies - by way of a breathtakingly elaborate and cynical pyramid scheme.

The bank's owners were accused of bribing local officials in some of South Africa's poorest and most dysfunctional municipalities - persuading them to divert, or to pretend to divert, their budgets into VBS's coffers in return for cash and gifts.

It was only once VBS was put under the control of South Africa's central bank that investigators discovered the full extent of the alleged looting and political intrigue.

VBS was placed into liquidation in November 2018.

Matodzi was accused of masterminding the looting, with the support of a team of highly qualified accountants and lawyers, and a dizzying network of apparently fraudulent shell companies and subcontractors.

Although numerous people had been arrested in the VBS case over the years, only Matodzi and former VBS chief financial officer Phillip Truter have been found guilty and sentenced.

South Africa’s elite Hawks police unit - the Directorate for Priority Crime Investigation (DPCI) which is tasked with investigating corruption - said it is also "pursuing other suspects" in the VBS case.

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