Atlas Finance, a major micro-lender, is striking back at its critics through court proceedings in which extortion and corruption charges have been laid against key sources alleging wrongdoing.
The move follows Moneyweb investigations which raised questions regarding Atlas garnishee orders obtained through the Krugersdorp court.
Our investigations were followed by those of e.tv’s 3rd Degree, which also queried apparently irregular Atlas garnishees.
It has since emerged that the microlender has brought extortion and corruption charges against Charles Gilbert, a key source featured in the e.tv expose.
Atlas has also stated that it has laid charges of extortion, fraud and crimen injuria against the directors of Summit Garnishee Solutions.
The company has played an integral role in investigating alleged garnishee fraud and acted as Moneyweb’s primary source in its first Atlas investigations.
Summit, however denies any knowledge of charges levelled against it.
Summit had allegedly attempted to extort Atlas to the tune of approximately R1.8m while Gilbert had allegedly attempted to extort R2m according to Atlas CEO, Jack Halfon. Halfon states that the R1.8m mentioned “emanates from monies held by Summit and owed by our debtors.”
“Fifteen years is the mandatory sentence in cases of fraud or extortion in an amount exceeding R500 000,” says Halfon.
Atlas also denies “Gilbert’s frivolous allegation that its credit life is charged at 18.5 times the industry benchmark, as it is untrue. The NCR is aware of our charges, as reports are submitted quarterly”.
“During court proceedings the whole truth will come to light … at the end of the day our innocence will be totally proved,” says Halfon.
According to Summit’s Clark Gardner, Atlas has previously attempted to lay charges against one of its staff, however those were effectively thrown out of court after the prosecutor involved in the case decided not to prosecute.
“At Summit we are pretty used to people that are threatened by our fight for what is right and to attack us in the form of defamation, it is a common practice,” says Gardner.
“ If they are saying we have defamed them, that the court files pertaining to those orders could not be found, why not just show us the documents proving that the orders are not fraudulent?”
The Gilbert affair
Gilbert this month presented Moneyweb with files which he believes prove systemic garnishee fraud in the industry. He has also made the claim that some customers are charged for credit life insurance at a rate of 18.5 times a related industry benchmark, which would be unlawful in terms of the National Credit Act (NCA).
Moneyweb is currently investigating these claims.
Video footage -captured using a hidden camera planted in a meeting between Halfon, and Gilbert – has been submitted as evidence in Atlas’ case against Gilbert.
In the footage, seen by Moneyweb, Gilbert and Halfon discuss potential penalties in the region of 10% of annual turnover should alleged insurance irregularities come to light.
At one point Halfon asks “what is the final amount that you will take to keep this thing quiet?”
Gilbert mentions an amount of R2m and states that “you may hear of me but you will never hear from me ever again”.
The pair also discuss withdrawing complaints lodged with the Sunday Times and with the National Credit Regulator (NCR) by Gilbert.
This discussion, and a subsequent “agreement” relating to the deal, drafted by Gilbert, are understood to form the basis of Atlas’s case.
According to Gilbert, the extortion charge filed by Atlas includes that “On or about the 11th of June the accused did unlawfully ‘pressure or inspire’ fear that he was in the process of reporting the company to the NCR and that he would withdraw his complaint and cease all activities against the company if he was paid R2m.”
Gilbert acknowledges that this meeting took place. However, he claims that he had “no intention of keeping the agreement because he did not trust the other side”.
He also maintains he had been led through a process of entrapment by being told, prior to the meeting, that “it would be a no-brainer to settle”.
Halfon has refused to comment in further detail on the matter.