* At least 200 investors involved
* Purchase orders for AIDS drugs allegedly faked
* Could be S.Africa's biggest corporate fraud
* Investors from U.S., Australia, Germany, S.Africa
By Rebecca Harrison
JOHANNESBURG, June 11 (Reuters) - Hundreds of investors have lost money in what could be South Africa's biggest corporate fraud, worth up to 10 billion rand ($1.24 billion), a private investigator and lawyer said on Thursday.
The fraud was spearheaded by Barry Tannenbaum, the South African son of one of the founders of pharmaceuticals firm Adcock Ingram, and is still unravelling, they said.
Investigator Specialised Services Group (SSG), hired by investors to look into Tannenbaum, said he persuaded investors to plough money into a pharmaceutical ingredient import business and faked purchase orders from firms including Africa's biggest generic drug maker, Aspen.
Products included ingredients for life-prolonging anti-retroviral AIDS drugs, and Tannenbaum offered annual returns of up to 200 percent, said SSG, which published documents and emails related to the scheme on its website.
"This was absolutely elaborate and was going on for about four years," SSG spokesman Warren Goldblatt said, adding an estimated 10-15 billion rand could be involved. "It's like in the case of Madoff, the wheels have just come off."
Tannenbaum, who now lives in Australia according to South African media, did not immediately reply to an email sent by Reuters. The office of his lawyer, Darryl Ackerman, said he was travelling.
South Africa's Star newspaper quoted Tannenbaum's lawyer denying his client was involved in any fraud.
Dean Rees, a lawyer and Tannenbaum associate who SSG said was also involved, did not return calls left on his cell phone.
Peter Winer, a lawyer representing several investors involved in the scheme, said the details of the case were unclear, but that at least 200 people -- probably many more -- were involved.
He likened the fraud to the Ponzi scheme used by New York money manager Bernard Madoff to cheat thousands of investors out of $65 billion over more than 20 years.
A Ponzi scheme pays early investors returns from funds paid by later clients. Winer said it appeared as though Tannenbaum's scheme collapsed when investors demanded to be repaid and new funds could not be found.
"It could have started as a legitimate company, but by the end there was nothing there," Winer, head of insolvency and corporate recovery at Werksmans Attorneys, told Reuters.
"There are billions of rands involved and we don't know for sure where the money is," he said, adding investors from South Africa, Germany, the United States and Australia are involved.
SSG said Tannenbaum operated through his Frankel International and Frankel Chemical Corp. companies. Winer said Tannenbaum's South African estate had been sequestrated and that authorities were probing the matter.
South Africa's Financial Mail said some of South Africa's top businessmen, including former Pick 'n Pay chief Sean Summers, had been duped.
The Department of Trade and Industry, which is responsible for pyramid schemes, had no immediate comment but said it would look into the matter. ($1=8.066 Rand) (Reporting by Rebecca Harrison; Editing by Simon Jessop)