Entertainment

Bernice Maune
5 minute read
10 Nov 2016
12:20 pm

Viewers left wondering if flashy ‘Vuzu rich kid’ is a Ponzi criminal

Bernice Maune

A self-proclaimed, self-made millionaire who spends lavishly has been described online as the man behind a cryptocurrency scam.

A slew of German machines, a luxury house, designer threads and a personal chef make up the lifestyle of Louis Tshakoane, a 27-year-old who showed off his extravagant assets on the show.

Tshakoane was paid a visit by Vuzu Rich Kids, a reality show that chronicles the lives of young wealthy people by spending a day with them. Hosted by Nomuzi Mabena, the presenter leads a camera crew into the houses of the “rich kids”, looking at the clothes they wear, the food they indulge in, where they shop and dine, their activities and the perks that come with being the spawn of supposedly wealthy families.

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But an episode that aired on Monday was all the more fascinating since the rich kid being featured was a self-proclaimed millionaire who had amassed his fortune apparently without the help of a famous surname or family ties.

Tshakoane displayed several Audi and BMW machines, with an Audi RS3 valued at R800,000 and a BMW M4 Coupe at R1.7 million, which were all branded with the logo of the company Undercover Millionaires.

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At one point he was asked about his company, but a clear explanation from him of what it was was lacking.

Instead, viewers were made privy to a shopping spree at Giorgio Armani and Versace, where Tshakoane splurged R15,000 on a shirt and R120,000 overall on clothing.

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Tshakoane also let viewers in on his watch collection, consisting of a Louis Vuitton timepiece worth R100,000 and a Ulysse Nardin watch priced at R200,000.

On social media, Tshakoane’s episode was trending, with some asking what he really does for a living and a few speculating that his company, Undercover Millionaires, is actually a Ponzi-style scheme.

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On Tshakoane’s Facebook page, he states that he is the founder of his company, which issues UMC coins, digital currency that people who register on his website can use to trade with among themselves. He is also the founder of Undercover Billionaires, an elite networking company that asks potential members to submit proof of their assets, which must be over $100,000 and $1,000 to sign up to be a part of their exclusive network.

A notice calling for people to join Undercover Millionaires dated 25 September includes a description of what people need to do to participate in the company. They are required to buy coins valued from R500 to R1.5 million and can expect returns of up to 50% on a monthly basis.

“You can invest multiple times but can only do one buy or sell order at time. You can register online and be in queue to buy whatever number of Undercover Millionaires Coins from other traders.”

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This system operates in a way that’s similar to Pip Coin, owned by Ref Wayne, and MMM, an alleged Ponzi scheme that recently ground to a halt after its system collapsed and the currency used to trade in it was deemed worthless.

According to Kipcommunity.org, Tshakoane’s company is indeed a Ponzi scheme, which sees the initial investors pocket the bulk of cash or digital currency traded in the beginning. The website claims to have allegedly exposed the true nature of the business and  the source of Tshakoane’s wealth.

“A member who bought UMC coins at the beginning of the month can sell his UMC coins by month end and make 50% net profit when he gets his money back. The question is, where does the 50% profit come from? We know that it does not come from business activities or investments as undercover millionaire currency only activity is to create and sell these UMC coins to members.

“The 50% monthly profit comes from new members who join the scheme and buy UMC coins from existing members and the founder. So the UMC coin fits the definition of a Ponzi scheme as the business works exactly like Pipcoin or Billcoin.”

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Kipcommunity.org adds that Undercover Millionaires is an outright scam that, despite going international after Tshakoane announced a seminar in Dubai to introduce his business, the company is likely to collapse since it cannot pay out its promised dividends.

“…the founder plans to launch the UMC coin in the US and UK. He is convinced that once he introduces the UMC coins to Britons and Americans, they will pay at least R166 per coin to get their hands on these valuable coins.

“The sad part is that some people actually believe this nonsense – that some gullible UK or US investors will buy this worthless UMC digital currency. This is the same modus operandi used by the pipcoin scam.

“Pipcoin promised its members that it would be launching in the USA and internationally as well, implying that the international launch will set off high demand for pipcoins and enable pipcoin members to make a killing due to the resultant price increase.

“Unfortunately, pipcoin members who do not understand economics and how the cryptocurrency works actually believed this hogwash and utter drivel,” the website stated.

The Citizen has contacted the production company, Barleader and M-Net, who said they would need to do their own investigations about the claims around the company and would respond once ready.