Alleged swindler denies scam, rejects Madoff comparison

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Alleged swindler denies scam, rejects Madoff comparison
June 14, 2009

SYDNEY, Australia (JTA) -- A South African-born Jewish businessman accused of defrauding hundreds of investors is rejecting the comparison with Bernie Madoff.

Barry Tannenbaum, 43, who now lives in Sydney, issued a statement to the media on Friday saying he categorically rejected as “conjecture and speculation” the “wild allegations” that he swindled more than 300 local and foreign investors out of about $1.2 billion. The alleged scam is being described as South Africa’s biggest corporate fraud.

Tannenbaum is alleged to have built a pyramid scheme in which he allegedly offered investors up to 200 percent annual returns. His company, Frankel Chemicals, was allegedly involved in the import of major quantities of chemicals on behalf of South Africa’s pharmaceutical giants, including Adcock Ingram, founded by Tannebaum’s grandfather, Hymie.

Local and international media have likened him to Madoff, the American businessman who pleaded guilty to defrauding investors of some $65 billion -- the largest investor fraud by a single person. But Tannenbaum rejected the comparison outright.

“I have read with amazement that I have been guilty of a multibillion-rand scam and that I am compared to Bernie Madoff in the USA,” he said in a statement.

“As has happened with other companies that have from time to time found themselves in a financial predicament, particularly in the present climate, I have found myself in such a situation," the statement continued. “I state categorically that I am not sitting with millions. I have not amassed some fortune that I have spirited away, and in due course an audit will bear out this statement, if people are still interested in hearing the truth.”

The High Court in Pretoria agreed last week to allow the appointment of a liquidator.

Tannenbaum is pictured on the Lubavitch.org Web site holding a Torah scroll he helped donate to a Chabad House in South Africa in 2006.