Law firm faces claims over suicide attorney's scam

The story of one of the biggest lawyer-run scams in SA history is expected to be revisited this week in a case brought by an investor in Colin Cowan’s Ponzi scheme, notes Legalbrief. The scheme unravelled in 2010 leading to Cowan committing suicide and leaving the highly-respected Durban law firm, Garlicke & Bousfield, to face claims from duped investors. According to a Sunday Times report, the firm said Cowan was ‘acting on a frolick of his own’ and was running an illegal Ponzi scheme. ‘We were as much victims of his fraud as everyone else,’ director Christine Seger reportedly told the newspaper. In the first claim before the courts, Merlin Stols said he had provided R7m in funding, of which R2m was paid into the trust account of Garlicke & Bousfield in early October 2010. Stol claims he only invested after obtaining approval from a director of Garlicke & Bousfield. It was to be a short-term loan with a high, but lawful, interest return. His attorney, David Randles, said his client’s case was simple. ‘Our client made a deposit, alternately had a written agreement, with Garlicke & Bousfield, which they must repay,’ he said. There are other claims waiting. At the time of Cowan’s death the financial extent of his crime was reported to be anything from R100m to R200m, but as for exactly how much was involved, said Seger, ‘no one knows and no one will ever know’.