Bay of drugs, death and double dealers


South Africa’s priciest real estate, along Cape Town’s Atlantic seaboard, is a magnet for celebrities and foreign holidaymakers – and all manner of crooks, creeps and miscreants

The flash suburbs of Cape Town’s Atlantic Seaboard – Camps Bay, Clifton and Bantry Bay – are regularly described as the most expensive real estate in South Africa. True or not, they certainly attract the sort of people about whom there is invariably a story to tell.

Who hasn’t read news stories about SA’s richest man, Pepkor magnate Christo Wiese, celebrity divorce attorney Billy Gundelfinger, or international stars like Annie Lennox and Ruby Wax? They are all respectable people who have no doubt chosen to live there for the sea views and delightful coffee shops.

But just as often the headlines are about the killers, money launderers, spies and sex fiends (by way of speaking) who find it an agreeable hideout. This is Noseweek and those are the ones this story is about – with the focus on one of the less well-known, more recent arrivals (and departures).

Diego Guarte Dougherty Novella

In 2015 the headlines announced that police had found Diego Guarte Dougherty Novella, the disowned scion of Guatemala’s spectacularly wealthy Dougherty Novella cement dynasty, wandering on Camps Bay beach, half-naked and in an apparently drug-crazed state. They politely insisted on having a look around his nearby luxury hotel room, where, in addition to half a kilogram of pure cocaine, they came upon evidence of the horrific sexual assault and murder of his handicapped but conveniently wealthy American girlfriend, Gabriela Kabrins Alban.  

He had come to South Africa to be treated at a local “alternative” rehab centre (see below).

Dougherty Novella was refused bail – first by a magistrate, then by a judge – and his trial on murder and drug charges is due to start early this year.

Only a month before the Kabrins Alban murder, German businessman Francis Schnetzler had finally managed to sell his Camps Bay mansion Enigma House and moved to the more discreet surrounds of a Spanish island. Enigma House, bought as a love nest for Schnetzler and his “adult movie” actress wife Veronika Zemerova, was decorated with lashings of gilt and marble, the better to offset the nude paintings and murals of Veronika that adorned almost every wall.

The Lobster House
Madonna on the rocks: Veronika Zemerova

And just when one thought that Camps Bay was getting a little boring, with Dougherty Novella behind bars and the Schnetzler family gone to other climes, Noseweek’s attention was drawn to a young German businessman and his heavily tattooed wife who had moved into the Lobster House, once a boutique hotel that belonged to the now notorious Louis Group (whose Christian founders, it has been said, always kept the Sabbath sacred – yet felt bound by only eight of the ten commandments).

It transpires that the Lobster House’s new occupants, Oliver and Cathrin Schulz, in addition to facing racketeering charges in the United States, may well hold the key to Germany’s greatest unsolved white-collar crime. Several investigators appear to be convinced, for all sorts of reasons, that the Schulzes can help them in their quest to discover what happened to the vast sums – equal to billions of rands – in bribe money paid a decade-or-two ago to German officials and politicians by the French oil giant Elf.

Cathrin Schulz Oliver Schulz

Because of their close ties to the former head of Germany’s domestic intelligence service – and through him to many influential German politicians – the Schulz couple would be prime targets for closer scrutiny by banks if President Jacob Zuma ever gets around to signing into law the proposed new FICA regulations. These will compel banks to pay greater attention to the accounts of “politically exposed persons (PEPs)”.

Schulz may well have been introduced to Camps Bay as a safe and cosy hideout by one of those politicians: former German Defence Secretary Ludwig-Holger Pfahls, who for a time was number one on that country’s most wanted list. Pfahls himself is rumoured to have hidden out in Camps Bay for years. He was eventually arrested in Paris in July 2004 and after a trial that lasted nearly six years, was jailed for five years.

At Pfahls’s trial it was established that he and other senior German officials had taken tens of millions of euros in bribes to approve the sale of a former East German refinery to Elf.

 

Pfahls and his friend Dieter Holzer, once head of Germany’s domestic intelligence agency, were also linked to alleged bribery by Saudi Arabia. German prosecutors believe the Saudis “donated” millions to the then governing Christian Democratic Party of which Pfahls was a senior member. Most of the Saudi donations however allegedly “went astray” finding their way into private bank accounts belonging to senior politicians.

Pfahls’s friend and co-accused, spymaster Holzer got three-and-a-half years in jail for his part in the Elf scandal.

Bringing the story closer to home, in 2011 the Mail & Guardian reported that Holzer had used Rusty Evans – a former Director General of South Africa’s Department of Foreign Affairs during the apartheid years – to help conceal the ownership of a palatial villa bought in France with the bribe money paid by Elf. (The fact that the French oil company was one of the apartheid regime’s most prolific suppliers of embargoed oil might explain the connection.)

Evans signed papers to say he had bought the property for a little under 6 million francs but, in reality, Pfahls had retained ownership, with spy friend Holzer paying the rates and taxes on the property through a Beirut-registered company.

Very little of the bribe money that Pfahls and Holzer are alleged to have swindled and embezzled – to the cost of the German taxpayer – has ever been recovered. Conservative estimates put the total amounts spent by Elf Aquitane on bribery and corruption at over R2 billion – at 1990’s exchange rates. Wherever the looted cash is, by now it has likely generated an equal sum again in interest.

Which brings us back to Camps Bay’s most recent “politically exposed” arrival from Germany.

Because investigators believe Holzer, (the one-time German domestic intelligence boss) has “a very good idea” where the Pfahls’s bribe money is hidden, they have been studiously researching all his past friends and connections. Following their trail, Noseweek has learned that Camps Bay’s more recent arrival, Oliver Schulz, had introduced ex-spymaster Holzer as a potential investor to his (Schulz’s) former employers – a German investment operation called Berlin Atlantic Capital. It was an introduction they would come to regret.

Schulz introduced Holzer as a family friend whose grandchildren attended the same school as the Schulz kids. Fair enough. He went on to explain to the Berlin Atlantic directors that his “old family friend” was seeking to invest a large amount of money that he would have difficulty explaining away should he deposit it in a bank.

But when the bigwigs of Berlin Atlantic Capital realised who Holzer was, they took fright and turned Holzer away – only to discover that it’s not always a good idea to upset the criminally well-connected. According to reports, Schulz immediately warned his employers that turning Holzer away was “stupid, short-sighted… and to be regretted”. He was about to make sure that they did regret it.

Muenster-born, former Berlin resident Schulz is not currently on any list of wanted suspects. But he does have business operations on four continents and is facing allegations of fraud, racketeering and general dishonesty in three of them.

Civil litigation against him in Germany has (temporarily) ground to a halt because German law requires that legal papers be served on Schulz personally. His former business partners have simply not been able to pin him down to any address more specific than “somewhere in Myanmar”. (These days his appearances in Camps Bay are rare and erratic.)

Dan Ryan

In America, where they took refuge for a while, Schulz, his wife and his business partner Dan Ryan are facing both civil litigation and criminal investigation. Next, the Schulzes moved to South Africa, where they set up a vast, highly suspect business empire that appears to exist only on paper – or, rather, on the internet.

Schulz currently owns more than 100 websites registered to addresses in Europe, the US and even one in Medelin, Columbia. Most of the sites advertise his skills and ability as a financial genius – and invite people to contact him about investing in cellphone towers and other infrastructure projects. One of these websites, Afflatus Capital Managers, offers “possible” rates of return of 17% per year. That is very neatly in the same range of the 15-20% return that infamous US fraudster and a former stockbroker Bernie Madoff promised investors.

Like all his websites, Afflatus Capital Managers does not list any physical addresses or telephone numbers. Instead customers are asked to communicate by email. The website goes on to say: “The investment vehicle is going to own and operate a mobile phone tower portfolio across Africa and Middle East with focus on seven countries including Nigeria, South Africa, and Namibia.”

Evidence that Schulz has ever actually erected a cell phone tower seems as elusive as his home address. There is no indication that his companies have ever operated in South Africa, Nigeria or Namibia.

At one stage Oliver Schulz was seen frequently in the coffee shops of Tamboerskloef, Gardens and Camps Bay. But while he hasn’t been spotted for some time, his family has moved into the Lobster House – a property once called the Lobster House Hotel and which, following liquidation (and/or business rescue, by arrangement with Investec) of the Louis Group, has been on the market for R20 million.

Ludwig-Holger Pfahls after being sentenced

Schulz originally offered to buy the property and was allowed to move in pending his obtaining a bond from a foreign bank. (Who did the due diligence checks, one wonders – and what did they find that pleased them?)

Since moving in nearly a year ago, Schulz has made no move to pay the purchase price; but has been allowed to stay on, paying only occupational rent. The Lobster House is still technically for sale, but it is unlikely another buyer will be found, because the new tenants don’t allow potential buyers to view the property.

In the US, litigation that began in 2010 is set to come alive again – with Berlin Atlantic Capital having reinstated the case they suspended when Schulz undertook to return all the company assets he had looted.

He has not done so.

Berlin Atlantic is also seeking a criminal trial on racketeering charges.

Papers filed in the District Court of the Northern District of Georgia, Atlanta Division, reveal that Schulz, his wife and his business partner Ryan – as well as their various shell companies – are being sued by the Berlin Atlantic Capital Group (BAC) which owns 85% of the Communications Infrastructure Group (CIG).

According to the court papers, Dan Ryan, the alleged accomplice of the Schulzes, was CEO, shareholder and a director of CIG. Schulz himself served as president of CIG – from April Fool’s Day 2010 until 6 December 2010 – and also as CEO of holding company BAC during the same period.

It is further stated that on 18 November 2010, barely six months after their appointment, Schulz and Ryan secretly formed a company called Communications Infrastructure Asset Management Group. Nothing if not cheeky, the pair appointed themselves as co-managing directors and then used the business address of CIG, at Five Concourse Parkway, Suite 3100, Atlanta, Georgia, USA as the business address for their new “mirror” company. The use of the CIG business address, and the choice of a very similar company name (Communications Infrastructure Asset Management Group, which is remarkably similar to Communications Infrastructure Group) was almost certainly not accidental. As CIG’s lawyers point out, any reasonable person seeing the same business address and a similar name would presume the asset transfers that followed were simple inter-company transfers within the BAC group.

 Then, being the sort of fellows who work very quickly, only 12 days after registering their new company – and in their capacities as CEOs of CIG and Berlin Atlantic Capital respectively – the pair began to sign over real estate from BAC and CIG respectively to their newly created company and other shell companies they had created. They were effectively stealing Berlin Atlantic Capital’s assets.

The plaintiffs go on to allege that the pair “used interstate wire and mail communications to represent to lawyers in New York and Maryland that they had the authority to execute these transactions and to direct these lawyers to prepare the transfer documents”. The use of “interstate wire and mail” makes their offences a possible federal offence. Bring in the FBI!

Over and above the 30-odd properties that the pair transferred into the name of their new company, they proceeded to transfer US$4.8 million into the business account of their newly created company. Ryan, perhaps the cheekier of the two, also paid himself around US$100,000 in “performance bonuses” from CIG’s bank accounts.

When BAC and CIG became aware of these transactions, Ryan and Schulz were asked to explain themselves, whereupon Schulz is alleged to have used a novel negotiating tool: he threatened that if his employers went after him he would, in his capacity as CEO of the holding company, file for bankruptcy on behalf of both BAC and CIG, causing immense damage to the company’s reputation.

The ruse did not work and BAC immediately sacked the trio and then began litigation against them.

Adding insult to injury, a check of company credit card records confirmed that, not content with having embezzled millions from his employers, Schulz had also used BAC’s credit cards to book his escape flight to Argentina.

Court papers filed back in 2010 say: “On information and belief, Defendants Oliver and Cathrin Schulz have already fled, or are planning to flee this jurisdiction, possibly destined for Argentina, with their entire family… Defendants Oliver and Cathrin Schulz have airline tickets to Buenos Aires, Argentina, and are planning to leave the United States on Wednesday, December 15, 2010.”

Camps Bay

The plaintiffs asked the Georgia courts to freeze the assets of the Schulz family, Dan Ryan and the various shell companies that the trio had formed in order to steal the assets and capital of their employers.

Much to the surprise of everybody, Schulz and his family returned from Argentina – and went back to his employers. As part of a settlement deal he offered to return all the embezzled money, and even to return company information which he had appropriated – including detailed lists of all BAC’s investors.

The company agreed to withdraw their litigation, provided that Schulz return everything and retract his earlier statements made to the US courts in which he had denied ever having stolen anything. As part of the settlement deal Schulz and his alleged accomplices also signed back the real estate they had transferred to themselves. But before all the cash could be returned, Schulz and family once again took to the skies – this time making for the bright lights of Cape Town. Their offer to return all the stolen BAC assets seems simply to have been a ploy to buy time.

The real estate, and some other assets, were eventually recovered by BAC – but when the Schulzes absconded a second time, they took a load of confidential company information with them – in addition to a not-insignificant amount of cash. BAC immediately revived their litigation, asking the courts to make findings that Schulz, his wife Cathrin, and partner Dan Ryan were all liable to compensate BAC for their losses.

The court case brought by BAC also made criminal complaints against Ryan and Cathrin and Oliver Schulz in terms of US racketeering laws.

Cathrin, the documents allege, “conspired in, conducted and/or participated directly or indirectly in the conduct of the alleged schemes to steal the assets of CIG and BAC through her position as Schulz’s spouse and as the owner or part-owner of shell entities set up to further the scheme”.

Subsequent German media reports suggest Oliver was sacked from his previous job as CEO of a major Berlin-based firm of funeral undertakers due to some less-than-delicate behaviour. First off, he angered the sensibilities of many Germans by allegedly getting old age homes to hand over the corpses of their recently dead to his extremely expensive funeral home’s private mortuary without consulting the next-of-kin. As they say, possession is nine-tenths of the law, and while his funeral parlour may have charged four-times as much as other establishments, the tactic of getting quick possession of granny or granddad’s corpse invariably clinched the deal.

More alarmingly, the German media also reported that Oliver Schulz was plotting a takeover of the funeral parlour by a British investment company. His plan was to simply sell off the firm, using his signing powers as CEO, and pocket a nice lump sum. BAC however could not have known of this damning bit of history; embarrassed by the behaviour of their past CEO, the funeral parlour simply sacked Schulz and kept quiet rather than go after him in court.

While he ran the funeral parlour, the Schulz children attended the German International School in Berlin – which is also where the children of Dieter Holzer’s son, Nikolaus Holzer, went to school.

Here it is also worth noting that Nikolaus is married to a Korean-born attorney by the name of Rosa Hong.

There is solid proof in black and white that the Holzer and the Schulz families were/are well acquainted.

 Corporate records show that Holzer junior’s wife Hong advanced a considerable sum of money to Schulz in order for him to set up his global business empire. Hong also has shared financial interests with Cathrin Schulz.

After fleeing the US in late 2011, Schulz wasted little time in setting up business in South Africa. In March 2012, he registered a company called Sworn Asset Management South Africa, with a business address of 5a Quarry Hill Drive, Tamboerskloof, an upmarket residence close to the German International School. Schulz was the only director.

Noseweek has found no evidence that the company ever traded. By 2014 the company had been placed in provisional deregistration by the Companies and Intellectual Property Commission (CIPC) for having failed to submit annual financial returns.

But in August 2014 Thomas Rautman of the website TowerXchange carried an interview with Dan Ryan – Oliver Schulz’s American right-hand man. Like many internet websites TowerXchange probably gets most things right, but, just as probably, there isn’t a whole lot of fact-checking done. The site describes itself as a “Media platform for the tower industry” – the tower industry being the people who set up and maintain the ubiquitous cell phone communications masts that blight the urban landscape.

The Rautman interview can only be viewed on the TowerXchange website by subscribers. Fortunately the free-access Myanmar Infrastructure Group website carries a complete version of the very flattering interview for good reason: the Myanmar Infrastructure Group website is owned by Oliver Schulz.

The TowerXchange interview makes for great entertainment if you know the background. Rather than say he fled the US when litigation commenced, Ryan instead announces that he decided to focus on “emerging markets” – markets generally (and purely coincidentally) often to be found in places with less than First World law- enforcement capabilities, and with banking regulations that (until recently) allowed the Guptas to thrive.

The interview reads:

TowerXchange: Please introduce yourself Dan. How did you get into the tower business?

Dan Ryan, CEO, Square1 Infrastructure: I’m a real estate infrastructure attorney by training and education. I have focused my career on infrastructure development as a developer and attorney since I entered law school in 1992.

“With the 1996 Telecom Act I entered the booming US wireless industry, working initially for a network deployment firm which my partner and I later acquired through an MBO. At our peak, we were rolling out 1,000 sites a year across the Eastern seaboard. I became aware of the low barriers to a service business and decided to enter into asset ownership, and subsequently started a small tower company in the US.

“With tower owners increasingly disposing of assets through brokered auctions, it has become increasingly difficult to acquire a portfolio of any size in the US in competition with the publicly listed towercos, so I started focusing on emerging markets.”

In light of their American adventures it’s also interesting to note that Ryan and Schulz have come to use the name Myanmar Infrastructure Group – a title remarkably similar to the Myanmar Investment Commission (MIC), which is the government body that oversees foreign investments – and the Myanmar Investment Group,  a private hedge fund registered in the Cayman Islands.

According to the company website, MIG is 97% owned by Singapore Myanmar Investco Limited, with the remaining 3% owned by Ryan and Schulz through a company called Golden Infrastructure Group. The partnership between Golden Infrastructure Group and Singapore Myanmar Investco was formally signed in May 2014.

How much do the shareholders of Singapore Myanmar Investco know about their minority business partner?

In the circular put out to the Singapore Stock Exchange by Singapore Myanmar Investco, readers are only told that: “GIG is a company incorporated in Seychelles and provides services relating to the overall management of resources, processes, skills and expertise to facilitate the execution of the building of communication towers in Myanmar. The controlling shareholders of GIG are not related to any of the Directors or Controlling Shareholders of the Company.”

Only a month after the joint venture was announced, the Centre for Public Integrity labelled the Seychelles “a haven for dirty money,” and described it as one of the world’s hotspots for money laundering.

Being (very) minor shareholders in the joint venture company makes it rather odd that Oliver Schulz himself controls the Myanmar Infrastructure Group website using a German registered website www.mig-infrastructure.de. What makes it even stranger, is that Singapore Myanmar Investco – the majority partner in the joint venture company – registered their own website www.mig-infrastructure.com in March 2014.

The website set up by the German majority partners appears to be dormant, so anyone seeking to contact the company would do so via the website controlled by Schulz.

But that is mostly speculation. Where things get serious is when Schulz and Ryan start twisting the truth and making false claims about their business track record.

The interview goes on:

TowerXchange: Tell us about your business in South Africa.

Dan Ryan, CEO, Square1 Infrastructure: Our South African operation has its roots in the co-location management business. We trade as Square1 Infrastructure Ltd in South Africa, where we were formerly known as SWORN South Africa Asset Management.

“We manage rooftops, risers and ground for landlords while also providing audit services. We were fortunate enough to secure [the services of] Brian Hosking from JHI, the largest property management company in South Africa. Brian has done a great job securing several hundred rooftop locations, primarily Class A office space in key areas of South Africa’s major cities, and we’re marketing those rooftop sites now.”

Noseweek spent weeks calling around those who might know a thing or two about telecommunications towers – and nobody, not a soul, had ever heard of Sworn Asset Managers. Nor, for that matter, had the company ever registered with the South African Revenue Services or the Department of Labour.

A phone call to Brian Hosking landed some interesting news: “Yes, I met with Dan Ryan and Oliver, but the company that Schulz formed in South Africa never traded. Not only was I never a director of the company, it never traded.

“As far as I know, the only thing that happened was that the company was registered at CIPRO [now CIPC]. Nothing else. They certainly don’t have bank accounts.”

Shown the TowerXchange interview, Hosking appeared visibly shaken and shocked. “That has to be changed. I don’t know how to get hold of Schulz and Ryan, but that has to be taken down.”

Hosking then spent weeks trying to have the claims removed from the company website without success.

Repeated emails to Schulz by Noseweek have been ignored.

If you have a few million to invest in a cell phone company that exists only on paper, give us a call. We won’t pass you on to Schulz, but we do have one or two suggestions where else you could send your cash.

A suitable case for treatment

The cocaine that was found in Diego Guarte Dougherty Novella’s hotel room – worth several million rand – was allegedly for his personal consumption.

Simon Loxton

Dougherty had gone to Cape Town to undergo treatment for his drug addiction. With his family raking in around R5 billion a year from cement sales, he had decided to treat his addictions with an obscure psychedelic substance called Tabernanthe iboga – first recognised for its medicinal properties by pygmy tribes of Central Africa. The root’s principal active compound is Ibogaine or ibogaine hydrochloride.

Iboga is outlawed or restricted in Belgium, Poland, Denmark, Croatia, France, Sweden, and Switzerland. In the United States, iboga is classified by the Controlled Substances Act on the list of schedule I drugs. There are iboga or ibogaine treatment clinics in Mexico, Canada, the Netherlands, South Africa and New Zealand, all operate in what is described as a “legal gray area”.

Simon Loxton, the man who runs Cape Town’s Iboga treatment facility operates using a certificate showing that he is duly registered as a traditional healer with the necessary government departments – in Gabon.

Share this article:

 or .....


Sharing is caring

Reader's comments

Like to add your own comment ? Please click here to subscribe - OR -
 
Submitted by : Mike & Val Turner of RANDBURG on 2017-01-05 13:38:18
There goes the neighbourhood...

Disclaimer

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither the authors nor the publishers of this website bear any responsibility for the consequences of any actions based on the information contained therein.