Fraud News 2007

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 Fraud News December 2007



Dozens of big names on list for Zuma case


The state has identified a list of 218 witnesses it intends calling to testify in its case against the African National Congress leader Jacob Zuma.


Did Shaik fork out for Zuma's children?


Convicted fraudster Schabir Shaik and his companies are alleged not only to have paid the education fees of Jacob Zuma's children, but their allowances as well.


Third drug company says it faces Iraq 'kickbacks' probe


A third pharmaceutical giant said Sunday it is being investigated by Britain's Serious Fraud Office (SFO) over alleged breaches of the United Nations oil-for-food programme in Saddam Hussein's Iraq. Eli Lilly and Company Limited said it had been asked to hand over documents to the SFO, a day after British peer GlaxoSmithKline (GSK) and Anglo-Swedish firm AstraZeneca announced they had received similar requests.




MTN moves to prevent SIM card swap fraud


The MTN cellphone network says it is taking firm action to prevent a repeat of a fraud incident in which an online syndicate hacked into the bank account of a city charity and stole thousands through a SIM swap


GSK, AstraZeneca confirm in British Iraq 'bribes' probe


British pharmaceutical giant GlaxoSmithKline and Anglo-Swedish peer AstraZeneca are being investigated over bribes allegedly paid to Saddam Hussein's deposed Iraqi regime, they confirmed Saturday.



Deloitte's $38m settlement


Detroit - The accounting company Deloitte & Touche has agreed to pay $38.25m as part of a $325m settlement to ex-investors of Delphi Corp.


Delphi filed for bankruptcy protection in 2005, acknowledging that hundreds of millions of dollars in earnings that it had claimed since General Motors spun it off in 1999 were invalid.


Zuma charged


Jacob Zuma, the new leader of the African National Congress, was on Friday served with papers to appear in court to face corruption charges, his lawyer said.

"Today, December 28, 2007, the Directorate of Special Operations (Scorpions) served on Mr Jacob Zuma an indictment to stand trial in the High Court on various counts of racketeering, money laundering, corruption and fraud," Zuma's attorney Michael Hulley said in an email.




Policewoman arrested for corruption


An Eastern Cape policewoman was arrested yesterday for taking money in return for jobs.

She asked her victims for R2000 in return for a job in the South African Police Service, he said.

Although the police had so far identified eight victims, she was believed to have taken more than R300,000


Ex-government employee to face charges


A former employee of the Department of Community Safety is facing criminal charges for allegedly manipulating a payment system so that the department's payments to service providers landed in the bank accounts of herself and her partner.


Magistrate won't stand down in conman case


The bail application of the man dubbed the Casanova conman took an interesting turn in the Pinetown magistrate's court on Friday when an application was made to have the magistrate removed from the case.

The defence for the alleged conman, Kevin Harvey, applied for magistrate Vanitha Kisten to recuse herself from the case, saying there was a perception that she was biased against Harvey.




Ex-Enron exec asks for freedom


Houston - Former Enron chief executive Jeffrey Skilling - serving a 24 year prison sentence for his role in the once-mighty energy company's collapse - has again asked to be free on bond while his case is appealed.


Choc firms in price-fix scam


Toronto - The Canadian divisions of Nestle, Mars, Hershey and other candy companies teamed up in a price-fixing scheme in the country's C$2bn chocolate bar industry, according to court documents.




Modise's attorney withdraws


The bail hearing of businessman Charles Modise in the Kimberley Magistrate's Court has been postponed to next year, the National Prosecuting Authority (NPA) said on Friday.


Ways to check your security company


The South African Intruder Detection Services Association (Saidsa) on Thursday warned the public to ensure their contracted armed response company is registered with the Private Security Industry Regulatory Authority (PSIRA) to "provide the services that they are in fact paid for".


Probe uncovers fraud in KZN premier's office


An internal forensic audit at the offices of KwaZulu-Natal Premier S'bu Ndebele has revealed that some of his employees were involved in fraud and corruption, the premier's spokesperson said on Friday.


Police smash massive Joburg forex fraud


The tax returns, bank statements, marriage certificate and birth certificate of Sandton resident John Jeremy Thornley-Stobbs are among the many documents seized in a police raid on a Randburg townhouse which has led to the cracking of a syndicate preying on South Africans with foreign bank accounts.


Business & Insurance - fraud


Summit TV speaks to Jacqui Jooste from Coface about the spate of credit applications where fraudulent operators posing as blue chip companies take delivery of goods and then vanish into thin air.


ERIKA VAN DER MERWE: Welcome to Business and Insurance, my guest is Jacqui Jooste from Coface. Jacqui, you’re highlighting a new form of identity fraud - this time targeting companies - and I understand it has significant financial consequences for businesses?




Alleged fraud syndicate in court


Four suspects in an alleged fraud syndicate that took a Caledon spare parts dealer for a R96 000 ride, have together turned against the fifth suspect, the Bellville Specialised Commercial crimes court heard on Wednesday.


Funeral director charged with ashes fraud


A former funeral home owner has been charged with fraud for allegedly giving families cremated ashes that were not the remains of their loved ones, Canadian police said on Wednesday.


Post Office in an about-turn on Manyatshe


Pretoria - The Post Office has surprisingly denied it is involved in any criminal charges against its former chief executive, Maanda Manyatshe, who is suing the state-owned postal service for R274 million for defamation.

Manyatshe, who was appointed managing director of MTN in 2004, resigned his position at the cellular company last year after allegations of mismanagement at the Post Office appeared in the media.


Joburg police make key taxi syndicate arrest


Police, in an effort to fight the ongoing corruption in the Taxi Industry in the North West Province, managed to apprehend who they believe is a leader of a syndicate operating from Johannesburg. A man believed to be an advocate of the High Court, was arrested after the police set up a trap, where the man handed a bribe to a policeman. The bribe was to be payment for charges to be dropped against his client, after being arrested for driving a taxi with a fraudulent license and permit.




To protect those who speak up


JUST less than 48% of South Africans don’t think the whistle- blowing law effectively protects whistle-blowers. Pessimism is on the up — that’s 5% more than last year who think the law doesn’t work.


Mbeki lashes out at corrupt practices and ANC careerists


PRESIDENT Thabo Mbeki lashed out at those who are guilty of careerism within our ranks and at members of the ANC who were terrorising others to bow to their will or buy their votes.


Opening proceedings at the University of Limpopo on Sunday, Mbeki said he was horrified to learn of ANC members occupying positions in government who murdered one another as they competed about who would emerge as victor in the process of awarding government tenders to private sector companies in return for financial and material kickbacks.



US urges probe into UN peacekeeping fraud report


The U.S. ambassador to the United Nations called on Tuesday for a full investigation into alleged corruption in contracts worth some $610 million linked to U.N. peacekeeping missions.


Trojan attacks thousands


recently discovered banking Prg Trojan is successfully lifting millions of dollars from thousands of commercial banking clients around the world, reports ChannelWeb.

"It's actually some state-of-the-art banking fraud code. I was very surprised at how sophisticated it was," said Don Jackson, senior security researcher for SecureWorks, who discovered the original Trojan in June.


McBride's 'medical certificate' doctor sought


The doctor who is alleged to have falsified a medical certificate for Ekurhuleni police chief Robert Mcbride shortly after he crashed his car is still missing, a week after a warrant was issued for his arrest, police said today.


World Bank fraud at 4-year high


The World Bank investigated and closed 149 cases of corruption linked to several of its aid programmes over financial 2007, with 35 percent of the allegations being against its own staff and consultants, the external unit of the bank's institutional integrity department said Tuesday.


More than $3bn lost in 2007 due to phishing attacks- Gartner survey


Debit Cards Emerged as the Financial Instrument Targeted Most by Fraudsters.


Phishing attacks in the United States soared in 2007 as $3.2 billion was lost to these attacks, according to a survey by Gartner, Inc. The survey found that 3.6 million adults lost money in phishing attacks in the 12 months ending in August 2007, as compared with the 2.3 million who did so the year before.




Public warned of Internet rates scam


Durbanites have been warned to be on the look out for con artists who ask the public to pay council bills online with the sole purpose of defrauding them.




A great year for the top 10 scams


From cruel foreclosure frauds to Nigerian puppies -- in other words, from the tragic to near comical -- this was a banner year for consumer scams. Much like many other years.

The Internet continued to provide a worldwide platform for fraudsters. New scams popped up and some old-fashioned schemes came back.

So, without further ado, here's a countdown of infamous notables for the year.


DA calls for clarity on Selebi


Uncertainty over the prosecution of National Police Commissioner Jackie Selebi was not in anyone's best interest, the Democratic Alliance (DA) said on Sunday.

It was reacting to the National Prosecuting Authority (NPA) announcement that it had decided whether to prosecute Selebi, but would not make the decision known until it had been studied by Justice and Constitutional Development Minister Brigitte Mabandla.




Land Bank head's false ID


The Land Bank's acting CEO Phil Mohlahlane is illegally registering companies, buying properties and opening bank accounts on an identity document that has been cancelled.




Cop shoots himself after corruption charges


A Durban police officer shot himself on Thursday after being arrested on corruption charges, police said on Friday.

Police spokesperson Superintendent Vincent Mdunge said the officer - a detective from the Durban Central police station - was in a critical condition in hospital.


Post Office to pay R60m in damages


The SA Post Office has been ordered to pay R60-million in damages due to contamination of a tender, according to Business Report.


Judge Willie Hartzenberg found the Post Office had confirmed a corrupt tender in 2002 despite the fact that senior managers including Maanda Manyatshe, the chief executive at the time, had been made aware of flaws in the process.


The judge said dishonesty, corruption and fraud had plagued the bungled Post Office tender for a biometric pensions payment system for the North West province.


Land claims commissioner released on bail


Regional Land Claims Commissioner for Limpopo, Mashile Mokono, was released on bail after having been arrested at his workplace in Polokwane on Thursday, the department of Land Affairs said on Friday.

The Sowetan reported that Mokono was released on R7 000 bail at the Nelspruit regional court and faced charges of perjury and fraud involving R2,5-million relating to a land claim by the community of Dwarsloop, near Bushbuckridge.


NDPP affidavit lists more charges against Zuma


Damning new allegations against presidential hopeful, Jacob Zuma, have been included in an affidavit before the Constitutional Court. The affidavit is a response to an application to the court by Zuma and arms company Thint.

Johan du Plooy, a senior special investigator for the National Directorate of Public Prosecutions (Scorpions), says investigations have uncovered substantial new evidence against Zuma. In the court papers he states that the extent and gravity of the charges have overtaken the charges on which Zuma’s confidant, Schabir Shaik, was convicted.


Astrapak’s numbers falsified


Astrapak, South Africa's largest plastic packaging company, fell the most in seven months after it restated profit and said an employee had improperly boosted the assets of a unit.




UniZul entrance scam exposed


The University of Zululand is investigating an official thought to be involved in a scam that saw scores of students registered for courses they were not qualified to study.

UniZul officials have confirmed that close to 80 students were deregistered in September after it was established that they did not have the relevant matric qualifications to study for a degree.


Concern over corruption threat to HIV funds


Poor government oversight of HIV/AIDS funding has created fertile ground for corruption, warns a new Institute for Security Studies report.


SA has seen massive increases in HIV/AIDS funding in the past decade from both government and donor agencies, reaching a combined total of R5bn for the year to March, says report author Collette Schulz-Herzenberg.


“Yet we don’t have a good picture of how much is being spent on what and by whom,” she said yesterday at a seminar hosted by the institute.


Sting in the tail for ant aphrodisiac scheme


A Chinese company that raked in billions of yuan raising ants to make an aphrodisiac tonic has filed for bankruptcy, an official Web site said.


Thousands of angry investors took to the streets of Shenyang, capital of Liaoning province, last month to demand help getting their money back from Yilishen Tianxi Group, besieging government offices and disrupting traffic.


Yilishen, which began making ant tonic in 2001, had filed for bankruptcy and was undergoing liquidation, the English-language report on said.


The ant business appears to be fraught with risk. In February, a Chinese man was sentenced to death for conning people out of 3 billion yuan (199 million pounds) in an ant-breeding scam also based in Liaoning.




Bank ’turnaround’ met with scepticism


The agriculture department’s announcement yesterday of a dramatic turnaround at the Land Bank in the past three months has been greeted with scepticism by the Democratic Alliance (DA).


Party agriculture spokesman Kraai van Niekerk said yesterday that the announcement smacked of “damage control” by the government.


Special investigation roots out fraudsters


More than a thousand people and 70 officials were arrested during a drive to root out driver licence fraud and corruption, the Department of Transport said on Wednesday.

"Almost 2 792 driver's licences were also cancelled during the ongoing joint operation by the national Department of Transport and the Special Investigating Unit (SIU)," said spokesperson Collen Msibi.


Telkom warns of cheque fraud


Pretoria - With the country enjoys the festive season, Telkom has called for heightened vigilance among its customers in guarding against cheque fraud also known as "refund scams."

"During this time of the year, fraudsters will increase their attempts to try and prey on the unsuspecting customers, leaving them out of pocket," said Thokozani Mvelase, Executive for Telkom Assets and Revenue Protection Services (TARPS).


Grant scam scrutinised


A squad of high-level investigators is soon to clamp down on government workers and members of the public involved in a social grant scam amounting to nearly R20 million in KwaZulu-Natal.


Yesterday, social development MEC Meshack Radebe told Sowetan that the officers were acting on a tip-off from the public.

The syndicate involves public service employees in the departments of health, home affairs and social welfare, including the South African Security Agency, which administers the payments of social grants.



All complaints have 'fallen on deaf ears'


When school reopens next year, several Gauteng schools will be without new curriculum textbooks.

This comes as the company responsible for delivery of the books - EduSolutions - has failed to deliver the books despite a November 30 deadline given by the MEC for Education, Angie Motshekga.


EduSolutions, a distribution company employed by the Gauteng Department of Education (GDE) to distribute stationery and textbooks to government schools, was recently found to be charging exorbitant prices for pencils and other items, some of which the schools hadn't ordered.


Samsung corruption causes controversy


The Samsung Group, the country's largest conglomerate, runs hospitals where Koreans are born, apartments for raising families, funeral halls for deaths and just about everything else in between.


"Samsung's influence surpasses the economic level and reaches out to influence politics, society, culture and even ideology," said Kim Sang-jo, executive director of Solidarity for Economic Reform, which is calling for better corporate governance.


But according to a former top Samsung legal executive, it is a corrupt place where the company kept a slush fund of nearly $220 million to bribe public officials so they would not pry too deeply into its management practices.


Boje questioned over 2000 match-fixing scam


Indian police on Tuesday began questioning South African cricketer Nicky Boje about a major match-fixing scandal in 2000, police Crime Branch officers said.


The 34-year-old was escorted in a private vehicle by South African diplomats to a New Delhi interrogation centre where detectives began the questioning, they said.


"The questioning has begun and Boje is cooperating nicely with us," New Delhi Police spokesman Rajan Bhagat told AFP.


Money mules make their mark


The concept of “money mules”, while old hat in many developed countries, will probably become more of a concern in developing countries, as the Internet is used more for commerce, a security expert warns.


Miles Clement, a senior research consultant with the International Security Forum (ISF), says a “money mule” is someone who allows his or her bank account to be used for the transfer of illegal funds for a small commission.


Credit card cloner to pay up


A credit card cloner, who was caught red-handed at Durban International Airport with 104 cards which he used fraudulently to buy R140 000 worth of goods, has to repay the banks the money and spend 2 000 hours in jail at weekends.


Province takes over


KwaZulu-Natal MEC for local government, Mike Mabuyakhulu, has taken over the administrative control of five local municipalities and a water authority in the province.


“Interventions in Impendle and Kokstad municipalities, and into the water service authority, follow months of investigations and observations by my department.


“Investigations were prompted by concerns about the municipalities and the functioning of the uThukela water entity and its ability to deliver basic water services,” Mabuyakhulu said.


McAfee study highlights dangerous Internet sites


McAfee has released a research report that spotlights a dangerous cyber practice known as typo-squatting.

"What's in a Name: The State of Typo-Squatting 2007", exposes how typo-squatters register domains using common misspellings of popular brands, products and people in order to redirect consumers to alternative Web sites.


These squatter-run sites generate click-through advertising revenue, lure unsuspecting consumers into scams and harvest e-mail addresses to flood users with unwanted e-mail. To quantify the scope of the study, McAfee reviewed 1.9 million variations of 2 771 of the most popular domain names.


Conrad Black Sentenced in Fraud Case


Conrad Black will be spending less time in prison than some experts had predicted. The one-time media mogul was ordered to serve 6.5 years in prison by U.S. District Judge Amy St. Eve for stealing millions of dollars from a company he had controlled


The judge had said earlier in the sentencing proceedings that Black faced between 78 and 97 months under sentencing guidelines. Some observers had handicapped that Black would be ordered to serve between 19 years and 25 years, according to the Chicago Tribune. The paper noted that one of Black's attorney told Judge St. Eve that "for a man of 63," a sentence of that length "would be life without parole."




Companies battle to stay ahead of cyber crooks


NO MATTER how smart your information technology workers are, somebody out there is even smarter. Which spells trouble for companies as cyber criminals develop increasingly sophisticated ways to tap into corporate secrets and syphon cash from their customers’ bank accounts.


Jobs-for-pals scam

The office of Limpopo Premier Sello Moloto has been rocked by another employment scandal.

Allegations have emerged that appointment procedures were violated in the employment of 11 senior managers in the premier’s office.

The officials were appointed in 2003 by former director-general of the province, Manching Monama.



Police bust Home Affairs wedding scam


Priests, teachers and traditional leaders have been implicated in a multinational fake marriage syndicate that was operating under the noses of Home Affairs bosses in Pretoria. A dawn raid on Friday tore the lid off the scam.

The syndicate is alleged to have fraudulently "married" about 1 500 South African women to foreigners seeking citizenship, without the women's knowledge between January and October this year.




'Fidentia boss still living the high life'


Despite the noose tightening around Arthur Brown following the provisional sequestration order on his and his wife's joint estate, the former Fidentia boss is still believed to be living the high life.

And curators are doing everything to establish where the money for his lavish lifestyle is coming from.


3 bust for R17m pension fraud

Durban - A woman was arrested in connection with R17m pension fraud, KwaZulu-Natal MEC for Social Services and Population Development Meschack Radebe said on Saturday.

The woman, was arrested along with an official of the department and a former official on Friday.

A $365 Million Dollar Tax Fraud


According to a press release, Mr. Walter Anderson's tax fraud resulted in the "largest personal income tax evasion case brought by the Department of Justice".  Pursuant to his September 8, 2006 plea agreement, telecommunications entrepreneur Walter Anderson pleaded guilty to violating two counts of 26 U.S.C. § 7201 (Attempt to evade or defeat tax), and one count of Title 22 District of Columbia Code § 3221 {a}, (Fraud in the first degree).  The Court sentenced Mr. Anderson on March 27, 2007 to nine years of prison for his failure to report about $365 million in income between 1995 and 1999; and also ordered him to pay the District of Columbia restitution in the amount of $22,809,032.




Cigarettes: 'if it's cheap, it's illegal'


In what was the biggest counterfeit cigarette raid in the country, tobacco products with a street value of R100-million was seized at Durban Harbour on Thursday.

Eighty-five policewomen, as part of the 16 Days of Activism campaign, led the seizure, called Operation Helix.


Fidentia bosses back in the dock


The two embattled Fidentia bosses made a brief appearance in the Cape Town Magistrate's court this morning on charges of fraud and theft. Fidentia boss, J Arthur Brown, and his financial director, Graham Maddock, were re-arrested in August.


Home affairs cracks syndicate

Much still needed to be done to clean up the home affairs department, director general Mavuso Msimang said today.

He was reacting to the arrests of five home affairs officials and a former official at the Watloo Home Affairs office in Pretoria this morning.

Free, but still not off the hook


Officials of the Land Bank implicated in the multi-million rand corruption scandal will remain free for now.

This is after the cabinet changed its decision to hand a damning forensic report on fraud and mismanagement to the police and the National Prosecuting Authority (NPA).

Cabinet spokesman Themba Maseko announced the cabinet’s decision yesterday, but faced tough questions from the media, including whether this amounted to a cover-up.

Cyber spying is growing threat to national security


McAfee has announced findings from its annual cyber security study, in which experts warn that the rise in international cyber spying will pose the single biggest security threat in 2008.




Web fraudsters hit orphans' NGO


An online fraud syndicate hacked into the bank account of a non-profit organisation and stole more than R90 000 from orphans and vulnerable children.

They have done this by developing a way that bypasses the bank's highest online security measure for its clients by eliminating the one time password (OTP) that they should receive.

A Joburg hacking syndicate recently stole R90 460 from the Standard Bank Internet banking account of a Cape Town NGO by cloning the chief financial officer's SIM card.


Trojans caused most infections


According to data gathered by Panda Security, Trojans (25%) and adware (23%) were the malware that caused most computer infections in November.


“This has been the trend throughout the year. The reason behind is the fact that both malware types allow cyber-crooks to obtain financial benefit: Trojans through theft of confidential data like banking and e-mail passwords, and adware through companies that pay cyber-crooks to display unsolicited advertising of their products through pop-ups, banners, etc.,” explains Jeremy Matthews, CE of Panda Security SA

Telkom intensifies fraud awareness

Telkom is intensifying its efforts at sensitising its employees on fraud and corruption; urging them to blow the whistle against such activities.


Spearheaded by Telkom Asset and Revenue Protection Services (TARPS), Telkom says it views fraud or any corrupt activity in a very serious light.


“During the IFAW (between 11 to 17 November 2007), we could not cover all our nine regions across the country. Therefore, we have made a decision to extend our campaign to various regions nationally and we want it to be ongoing,” said Thokozani Mvelase: Executive for TARPS.



Protect your PIN, urge police


Banks and police have urged people to be extra careful when making transactions at ATMs.

More and more ATM users throughout the country are falling victim to card-skimming syndicates and losing thousands each day.


The modus operandi of the scam is to use hand-held card readers and skimming devices that are placed over ATM card slots.


Hurricane aid fraud nears $500m


The Bush administration now acknowledges it is trying to recover nearly $500m from people who improperly received federal aid money intended to help victims of two deadly hurricanes, Katrina and Rita, along the Gulf of Mexico Coast two years ago. It said the amount may increase further.


Top official in fake housing claim probe


THE chairman of Nelson Mandela Bay‘s land and housing committee is being investigated following claims that he falsely claimed more than R1-million from the municipality for a housing development project.


Jailed accountant wishes to appeal


An assistant accountant who was jailed for five years for fraudulently transferring money from her employer's payroll account into her own, on Wednesday launched an application for leave to appeal her sentence.

Heather Josephine Michelson, 34, appeared in the Bellville specialised commercial crime's court, before Magistrate Amrith Chabilall, who is to rule on December 11 whether to allow her to go on appeal to the Cape High Court.


Ex-mayor’s fraud case delayed


The R30 million corruption case against the former mayor of Makhuduthamaga Municipality in Limpopo, Kgaola Mafiri, and four of his accomplices will continue to haunt them during this festive season.




Estate of Fidentia boss sequestrated


The joint estate of former Fidentia boss J Arthur Brown and his wife Susan has been placed under provisional sequestration by the Cape High Court today.


This followed an application by the curators of the Fidentia group of companies, who claimed that the Browns owed Fidentia just over R24 million.




Ezemvelo denies that R22-million is missing


The provincial nature conservation agency Ezemvelo KZN Wildlife has strongly denied suggestions that R22-million is missing from its coffers, but it would nevertheless support disciplinary or criminal action against any staff found guilty of defrauding the organisation of any other funds.