The Grand Scam: How Barry Tannenbaum Conned South Africa's Business Elite

by Rob Rose

The fascinating inside story of Barry Tannenbaum's Ponzi scheme, the biggest corporate fraud in South African history.

Genres: Biography

344 pages, Kindle Edition

First published November 20, 2013

Reviews

[Andrew · Rating 4 out of 5]

As a point of departure, it’s going to be easier for me to provide a Dummies Guide to Ponzi Schemes. Don’t worry, it won’t spoil the book for you – in fact, for those of you without an MBA, it’ll actually help with your understanding of the book. Anyway, a Ponzi scheme is when I ask you to invest R1000 with me and I promise to pay this back to you in 3 months, together with a nice chunk of interest. In 3 months’ time I ask another person to invest R1000, which will also be repaid with some hefty interest and then – and this is where it gets sneaky – I pay you your money back and use the other person’s investment to pay your interest.

You are so thrilled at the interest that you ask to leave your R1,000 in to earn more interest - heck, you ask if you can put in another R100,000 – so you are satisfied AND I get to keep your money! Now, this is all that Barry Tannenbaum, the subject of ‘The Grand Scam’, was doing, but on a HUGE scale. He had payments coming in and going out daily, not monthly, and he had billions coming and going, not a measly R1,000.

So who were these people, these morons stupid enough to invest with Barry? Actually, they were the elite of SA business and they were snared by simply offering them good returns, but not extravagant returns. And Tannenbaum and his two legal henchmen played them like a fiddle, taking billions from the upper-echelons of SA business society, as well as the millions from all the other victims.

Like any Ponzi scheme, it was doomed for failure – sooner or later one too many people ask for their money and the whole scheme falls apart. Bright fraudsters, of course, have hidden away plenty of the money, waiting to jump as soon as the first card falls. One of Tannenbaum’s henchmen is in Switzerland, living in luxury, while the other still lives in SA (having made a deal with the government). But Barry remains an enigma – he fled to Australia timeously, but has shown no sign of fancy living. In fact, it seems that he is moving from rental to rental one step ahead of having to pay the rent… And this is really the big mystery of the fraud - why does Tannenbaum appear to have no money? Could this likeable, bumbling naïve former salesman really be the mastermind behind such a massive Ponzi scheme?

It is questions such as these that make ‘The Grand Scam’ such an intriguing read. Peopled with eccentric characters and featuring cameos by some of SA’s most notorious criminals, the book is not merely an exceptionally readable tale of crime, but is an exceptionally well researched presentation of the facts.

[Mabel Lucy · Rating 2 out of 5]

Interesting in parts - and it's important to look at issues like this - but I couldn't help thinking all the way through that this author should not be trusted without careful consideration by the reader of what he is stating. He was one of the team of so-called "investigative journalists" who wrote a devastating series of articles on a so-called police hit squad unit, based on evidence that was spurious and that was deliberately placed with these journalists by gangsters in order to mislead them (see https://www.noseweek.co.za/article/27... ). They were after the scoop rather than the truth in that case, and this book has a bit of that flavoring, too. If he were to give back the "Global Shining Light" Award that he received for that earlier so-called "expose" then I would re-assess what I say here. Many are calling for that award to be rescinded because it was given for work that has been shown to be very suspicious and in many instances has been chucked out of courts by judges who have agreed that it was very "unsafe" evidence that the journalists presented to support their case against a police unit that was the best in the country.

[Giovanni · Rating 4 out of 5]

A well written journalistic style report, well organised to be compelling and keep you reading.
The financial disaster engineered in South African and world wide was exposed in 2009. The book presents different sides to the story, form the 'customer - investors ' into the Ponzi scheme, to the 3 key characters who engineered and run it.
Scary take-away lesson: no matter how knowledgeable you might be with financial instruments and comfortable with quantitative arguments, falling into the trap of a scheme like the Great Scam is easier than one could ever imagine...
Worth a read, no matter wether you're interested in SAfrica matters (there's quite a bit of SAfrican culture and reality one can tap into) or not. Till the very last page the interest is kept alive, the massive amount of information is well laid out to keep the curiosity up.

[Rachel · Rating 4 out of 5]

The price of greed - first lose vast sums of money to the Ponzi scheme, then return all cash flows from 6 months prior to the Ponzi scheme going bust to the Ponzi mastermind via his liquidator/trustees and then lastly experience the disgraceful flip flop of SARS from capital gains tax to income tax on all payments! BUT, still Dean Rees, Barry Tannenbaum and the rest don't get held to account for this vast fraud. Unbelievable but sadly all true. So glad I was not caught up in this huge mess.

[Malcolm Fenner · Rating 5 out of 5]

Great book outlining the nature of the scam and the Players involved.

I believe South Africa needs more of this type of journalism to assist in the education of the population to the risks surrounding things of this nature and the financial industry as a whole.

[Nigel Meinrath · Rating 4 out of 5]

An interesting account of one of the largest Ponzi schemes to have taken place in recent history in South Africa.

[Beric Croome]

An interesting read.

[Maureen · Rating 3 out of 5]

Interesting details on all the folks conned. Simply written and amazing the repetition as same scam caught so many high flyers.