news july 2007

Fraud News July 2007

Chief defends FSB on Leaderguard

Rob Barrow, who leads the Financial Services Board (FSB), defended himself and his organisation before members of parliament from accusations that the regulations drawn up to protect South African investors from unscrupulous financial advisors and intermediaries are either inadequate or inadequately administered.

After hearing from the ombudsman for financial service providers, Charles Pillai, earlier this year about a massive fraud perpetrated by directors of the Leaderguard group of companies, the portfolio committee for finance accused the regulators of failing to do their duty. (Read more...)

Travelgate trial now set for 2008

The trial of the four travel agents still standing in the parliamentary travel voucher fraud case will start only next year, it emerged on Tuesday. (Read more...)

Charges pile up against alleged corrupt cop

For an inspector attached to Hillbrow police station, Sean Twala lived the high life.

He owns a plush home in the upmarket suburb of Brackendowns, in Alberton, and drives an Audi and a VW Polo.

According to investigators, Twala also hijacked buildings in Joburg, abusing his status as a member of the Hillbrow housing anti-hijacking task team to turn on the very people he was meant to protect. (Read more...)

Corruption in business to be surveyed

Minister Geraldine Fraser-Moleketi said yesterday she was seeing a growing willingness among companies to tackle corruption, but that there still appeared to be some confusion about the implementation of legislation.

She was speaking in Johannesburg at the launch of the Business Survey Against Corruption for 2007, which looks at South African companies operating locally and in other countries, to help government assess if its anti-corruption policies and legislation of the past three years has been effective and what obstacles to business companies were experiencing. (Read more...)

Bill to put light on officials’ interests

CAPE TOWN — Municipal managers will soon be compelled to declare their business and financial interests upon taking office, according to new legislation tabled in Parliament yesterday by Provincial and Local Government Minister Sydney Mufamadi.

Municipal managers have regularly hit the headlines in recent years particularly when it was found that some of them earn more than the president . (Read more...)

Qwest boss to be jailed

DENVER — Joseph Nacchio, former CEO of Qwest Communications International , has been sentenced to six years in prison for trading $52m in company shares based on inside information about falling revenue.

US District Judge Edward Nottingham ordered Nacchio to forfeit $52m and pay a fine of $19m , refusing his request for probation. (Read more...)

South Africans used as 'money mules'

South Africans are increasingly being targeted by international crime syndicates to be "money mules," the SA Banking Risk Information Centre (Sabric) said on Monday.

"There are increased reports of attempts to recruit South Africans to act as money mules," said Sabric's Susan Potgieter. (Read more...)

Corruption probe fingers eThekwini metro police

The unit investigating alleged corruption among eThekwini metro police is keeping a tight lid on investigations that could have serious implications for high-ranking officers, some of them connected to the African National Congress's (ANC) powerful eThekwini region.

The Independent Complaints Directorate (ICD) recently arrested non-uniformed police officer Dees Govender on charges of corruption, bribery, defeating the ends of justice and impersonating a police officer. Govender had allegedly accepted bribes. (Read more...)

Money laundering fight costs banks

THE cost of fighting money laundering has risen dramatically for banks across the world due to the increasing complexity of the financial markets in which they operate, according to a new report released by KPMG Forensic yesterday.

KPMG’s study, which included 224 banks from 55 countries, found that spending by financial institutions on anti-money-laundering systems and processes had risen by an average of 58% over the past three years. (Read more...)

Ex-BP manager accused of defrauding company

A former senior manager of petrol giant BP, who is alleged to have defrauded the company of more than R3-million, was due to appear in the Western Cape's Special Commercial Crime Court on Thursday.

Norman Stanley Pepper, 43, of Bishop Lavis is facing 30 counts of theft and fraud. (Read more...)

Grant convictions hit 2058

A total of 2058 public servants had so far been found by courts to have received social grants fraudulently, Social Development Minister Zola Skweyiya said in a written reply to Democratic Alliance MP Mike Waters.

Social grant fraud cost the department billions of rands and saw government expenditure on the social safety net soar. (Read more...)

Cybercriminals move focus to SA and 2010

The Russians are coming to the 2010 World Cup - but not all of them have good intentions.

International cybercriminals are using 2010 to target South Africa, forensic investigators warned on Wednesday. (Read more...)

Le Roux paid no tax on R1,9m commission, court hears

Former national cricketer Garth le Roux and companies under his control never paid a cent of tax on property-sale commissions totalling just over R1,9-million, Cape Town's Wynberg Regional Court heard on Wednesday. (Read more...)

Council challenged on 'flawed' tenders

The forensic investigation that concluded that the award of seven multimillion-rand tenders for development on Stellenbosch municipality-owned properties was "flawed", has come in for a hammering from the developers concerned. (Read more...)

Rautenbach case an 'embarrassment' to NPA

The National Prosecuting Authority may have to wait a little longer before it can get its hands on fugitive businessman Billy Rautenbach, who was arrested in the Democratic Republic of Congo and deported to Zimbabwe last week.

It appears that Rautenbach - a Zimbabwean citizen - was also wanted in his home country for crimes committed there, NPA spokesperson Panyaza Lesufi says. (Read more...)

Fraud fighters 'understaffed'

As white-collar crime continues its upward spiral the commercial branch of the South African Police Service (SAPS) has come under the spotlight. Questions are being asked about its effectiveness and purpose.

White-collar crime has risen by 12,6% in the past financial year and the highest number of incidents (61 690) in six years was recorded in 2006/07. (Read more...)

Spy software ‘raises risk of cyber crime’

Scams using spy software downloaded from the internet will become the “cyber crime of the future”, Supt Jerome Hardenberg of Western Cape’s commercial branch of the South African Police Service predicted yesterday.

Hardenberg told a media briefing that two cases of this sophisticated scam had already been uncovered where WIN-SPY software was downloaded on public computers, at internet cafe s, and activated when specific information that could be used to commit fraud was monitored. (Read more...)

2010 set to boost fake goods trade

The trading of counterfeit goods could become a problem in the run-up to the soccer showpiece in 2010, says the police's commercial crimes branch.

Addressing a press conference on Wednesday in Bellville, branch commissioner Director Andre van Dyk said: "Brand-holders must lay charges, police can't lay the charges. With communities, we have to stem the tide of piracy before 2010. (Read more..)

Head cashier arrested on fraud suspicion

A 30-year-old Giyani cashier was arrested for allegedly defrauding a supermarket of over R1-million, Limpopo police said on Thursday.

Limpopo police spokesperson Superintended Ronel Otto said Rudzani Angelinah Sadiki was the head cashier at a supermarket and was responsible for collecting money from the tills, counting it, and then depositing it into a machine. (Read more...)

Criminals use latest technology, cops say

Police have warned the public and businesses to constantly be alert for criminals who devise new methods of committing commercial crimes.

Banking details and personal information such as identity numbers, computer log-on details, credit card or cheque information must be guarded closely. (Read more...)

Fraudster faces Simba's wrath

A former employee of Simba who defrauded his employers of almost R300 000 will have to wait until next week to learn his fate.

Stefen Mapondo Zitha was earlier found guilty of 16 charges of fraud involving nearly 5 000 boxes of Simba chips that he sold for personal gain. (Read more...)

Judge dismisses case against KPMG tax-shelter accused

NEW YORK — A federal judge has dismissed charges against 13 former executives of KPMG accused in the largest criminal tax-shelter case in US history.

The ruling by US District Judge Lewis Kaplan in New York follows his decision last year that prosecutors violated the constitutional right to counsel for many of the former executives by pressuring KPMG not to pay their legal bills. (Read more...)

Gullibility — the fraud’s tool

IN THAT remarkable text, 101 Get-Rich-Quick Schemes, fooling people into giving up their internet banking password and account details must be duking it out for top spot with that old chestnut, Nigerian 419 scams.

In the real world, there is no way you would hand your pin and card to a complete stranger just because they asked you to. Online, however, this is exactly what millions of people do each day. (Read more...)

Court told how cricket body was defrauded

The defence in the case of a former financial manager accused of defrauding the United Cricket Board of R7,4-million hopes to have the charges against him dropped. (Read more...)

Nafcoc probe continues

It is just over a year since R1,3-million - including R800 000 intended for HIV-prevention programmes - was controversially channelled from the Umgungundlovu District Municipality to the National Federated Chamber of Commerce (Nafcoc).

And, according to police Inspector Joey Jeevan, a docket concerning the matter has been referred by the Commercial Crime Unit to the Director of Public Prosecutions for a decision on whether to prosecute anyone on fraud charges. (Read more...)

The downfall of Conrad Black

Disgraced media mogul Conrad Black faces a lengthy stretch in a United States jail after a court convicted him of looting millions of dollars from his Hollinger empire by embezzling funds from shareholders. (Read more...)

NGO faces fraud charges

A case of fraud has been opened at the Milnerton police station against a women's non-governmental organisation, while the Department of Social Services and Development, which had funded the organisation to the tune of R5 million, is also investigating.

Department spokesperson Simphiwe Xako said that after receiving allegations that workers had not been paid last month, MEC Kholeka Mqulwana had launched an internal investigation. "We are expecting the report next week." (Read more...)

Son cashes dead father's pension for 10 years

New York - When retired US school teacher Edward Sadlon died in 1993, his son apparently saw no reason to tell anyone, and allegedly continued to cash his father's pension cheques for almost 10 years.

Now, prosecutors in Connecticut, where the retired teacher had worked, have charged the son, William Sadlon, 58, with mail fraud, accusing him of paying the monthly checks into his own account from late 1993 until early 2003. (Read more...)

Fake driver's licences rife across SA

More than 1 000 people have been arrested in connection with 42 000 invalid driver's licences fraudulently issued across the country - and all prosecutions have ended in convictions.

In the first two years of a six-year national investigation, the Special Investigating Unit (SIU) has identified 42 229 invalid licences on the system. (Read more...)

FNB gets tough on ATM crime with R100m boost

First National Bank (FNB) has invested R100-million to fight ATM fraud over the next three years, it said in a statement on Tuesday.

FNB chief executive Mike Arnold said the R100-million would "beef up" security at more than 3 000 ATMs countrywide. (Read more...)

Police 'rotten to the core'

A former police inspector with 17 years' experience was jailed for firearm fraud. Now he has admitted that was just one of a myriad crimes he committed while a police officer.

They included pimping prostitutes, car hijacking and raiding drug dens only to sell off the merchandise to rival dealers. (Read more...)

Experts warn of increasing fraudulent activity in SA

AN INCREASING number of fraudulent schemes, spurred by the booming economy, are being uncovered, industry experts said yesterday. (Read more...)

Thieving Absa employee sentenced

After admitting that she defrauded Absa bank more than 200 times, the mother of two pre-schoolers was jailed somewhat delicately on Monday by the Pretoria regional court. (Read more...)