Fraud News 2007

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 Fraud News November 2007



UIF loses R66m


The Unemployment Insurance Fund (UIF) lost R66-million on fraudulent unemployment claims between April 2005 and March this year, the fund said on Thursday.

UIF spokesperson Kgomotso Sebetso said it was considered fraud for people to continue to receive benefits despite having secured a new job.




Natwest trio plead guilty to Enron-related fraud


Houston, Texas - Three former British bankers pleaded guilty in a Texas courtroom Wednesday to a single count of fraud related to the scandal-ruined energy trading firm Enron.

A lawyer for the so-called "NatWest Three" said that after 17 months of staying apart while awaiting trial in Texas, the trio decided to accept a plea deal in order to "move forward and do more productive things with their lives."


Former bank employee stripped of all he owns


Former First National Bank financial adviser Clynton Cotton, who is accused of ripping off clients by almost R21-million, was stripped of everything valuable he owns in an asset forfeiture raid on his plush Umbilo home on Wednesday.


Security groups illegal


Thirteen security companies contracted to the Thulamela Municipality, in Limpopo, are operating illegally and under a corrupt umbrella, the Thohoyandou high court found yesterday.


Council to probe two big tenders

BUFFALO City council has ordered a forensic investigation into the awarding of two multi-million rand contracts to two different companies without its knowledge.

The decision effectively amounts to a review of the tenders awarded by the municipality to Waste Rite for a R28million waste management services project and to Neo Solutions for R5m to implement a waste management bylaw.



Arrests in British football corruption probe


London - Four men were arrested as detectives investigating alleged corruption in British football raided eight addresses, police said Wednesday.

The City of London Police said the four - aged 69, 55, 48 and 30 - were being held on suspicion of conspiracy to defraud and false accounting.




New fraud scam


Police in Pietermaritzburg issued a fraud warning on Tuesday after financial institutions in the area reported numerous cases of the new "over deposit refund scam", police said.

Police spokesperson Inspector Joey Jeevan said a fax was sent to a potential victim by a person pretending to be from South African Revenue Service (SARS) or Telkom.


R1bn bid to tackle card fraud


THE banking industry plans to spend R1bn introducing smart cards as soaring credit card fraud threatens to choke the R40bn industry, says Absa group payments systems GM Walter Volker.




Social grant fraud decreasing - SASSA


The South African Social Security Agency (SASSA) says there is a considerable decrease in fraud and corruption of social grants within the Social Development Department. The agency's CEO, Fezile Makiwane, made the statement this morning in Pretoria at the opening of a four-day workshop.


Scorpions eye 'biggest diamond'


Cape Town - The Scorpions, SA's elite crime-fighting unit, is now probing claims of fraud in connection with the "world's biggest diamond", allegedly found on August 27 on a farm in the North West.


Scorpions spokesperson, Tlali Tlali told News24 that British businessman Brett Jolly had "approached and made a representation to us," and that his claims were being subjected to an internal process before an investigation could be launched.


KZN parks to be investigated


KwaZulu-Natal’s agriculture MEC Mtholephi Mthimkulu has ordered a forensic investigation into Ezemvelo KZN Wildlife following revelations of alleged financial irregularities and an adverse audit report.




Fears of cover-up into corruption probe


Findings of forensic investigations that allegedly finger top KwaZulu-Natal government leaders in looting vast resources belonging to the provincial department of agriculture are being kept under wraps.

Finance MEC, Zweli Mkhize, this week told the provincial legislature's finance and economic development portfolio committee that the findings needed to be kept secret as the Directorate of Special Operations, the Scorpions, was investigating.



Fraudsters eat into hefty chunk of the healthcare services you should be getting


Up to 10 percent of claims paid out by medical schemes, amounting to R6 billion a year, are fraudulent or represent an abuse of the schemes' benefits. If these practices could be curtailed, the contributions that you as a member of a medical scheme pay could be significantly lower.

Marius Smit, the chairman of the Board of Healthcare Funders Forensics Unit and the head of the Discovery Group Forensic Services, says healthcare fraud and abuse impacts on you directly - particularly as a significant portion of the monthly premiums that you pay goes towards filling a fraudster's pocket.




Condom fraud case postponed


former employee of the SA Bureau of Standards (SABS) who allegedly certified condoms that did not meet the required standards and two other accused, had their case postponed in the Pretoria Commercial Crimes Court on Friday.

Simphiwe Fikizolo, 32, Sajeev Joseph, 35 and Jeffrey Hurwitz, 51, will appear again next year on February 26 after a postponement was granted for further investigations.


Curators of Fidentia go after Brown joint estate


Cape Town - The relentless, time consuming and expensive quest by the Fidentia curators to locate assets for the benefit of widows and orphans continued in the Cape high court yesterday.

The curators, Dines Gihwala and George Papadakis, went before judge Dennis Davis and sought the provisional winding up of the joint estate of J Arthur Brown and his wife, Susan, on the basis that Brown owed Fidentia Holdings more than R25 million.


Loophole may clear ex-Cape Town mayor


The City of Cape Town's standing committee on public accounts (Scopa) has had to clear former city manager Wallace Mgoqi and top officials of the then-ANC administration in several cases of financial mismanagement because of a loophole.

But Mgoqi may yet be hauled before court over payments of about R8-million.




Stung Scorpion cries racism in court


The disgraced Scorpion whose corruption conviction sparked a police probe into Brett Kebble murder prosecutor Gerrie Nel has slammed a magistrate's criticism of his ex-boss as racist.

Suspended National Prosecuting Authority deputy director Cornwell Tshavhungwa claims magistrate Andries Lamprecht launched a "vitriolic" and "unwarranted" attack on Nel's evidence - which Tshavhungwa claims would have cleared him of the fraud, corruption and perjury charges for which he was convicted - because Nel would not join his "racist agenda".


Scorpions boss to be grilled


Scorpions boss Leonard McCarthy faces a grilling over how the crime-fighting organisation's top-secret informer fund was fleeced of hundreds of thousands of rands by one of its most powerful officials.

The state's corruption, fraud and theft case against former Scorpions national head of operations Geophrey Ledwaba - the third of such cases against staff based at the organisation's Gauteng office - is also expected to expose how the so-called C-Fund was vulnerable to looting by National Prosecuting Authority staff.




Pathological gambler jailed


A pathological gambler was on Monday effectively jailed for six years for stealing more than R900 000 from Sanlam, while employed by the insurance company as a client service representative.

Natalie Young, a 29-year-old mother, appeared in the Bellville commercial crimes court, where magistrate Amrith Chabilall found her guilty on 102 counts of fraud, involving R903 174.


No word yet on NPA Zuma decision


There was no word yet on whether ANC deputy president Jacob Zuma would have to face new corruption charges as the National Prosecuting Authority (NPA) was still considering the case, an NPA spokesperson said on Monday.

"It is a very painstaking process of consideration," said NPA spokesperson Tlali Tlali, speaking less than a month before the ANC holds it national conference and elects its future leader, a position for which Zuma appears to have widespread support.


Jail time for Old Mutual fraudster


A single parent in dire financial straits who desperately needed to pay for her children's education and prevent her house being repossessed, is to spend six years in jail after she admitted defrauding her employers of more than R1-million.

This follows a plea bargain she entered into with the state, which was accepted by the specialised Commercial Crimes Court in Bellville on Thursday.

Jeanette Botha, 48, was employed at Old Mutual as a personal assistant to general manager David Beresford and forensic consultant Brent Small when the offences were committed.


Porritt holds up Tigon case


THE fraud case of former Tigon CE Gary Porritt and former Tigon and PSG Guaranteed Growth Fund director Sue Bennett was on Friday postponed until Wednesday when Porritt could not make it to court on time, as he was stranded in KwaZulu-Natal, where he lives .




Heads roll for loans to fat-cat buddies


SCORPIONS investigators probing multibillion-rand fraud at the Land Bank seized documents from the bank’s Tshwane headquarters during raids.


The crime-fighting unit was called in after a forensic investigation revealed massive fraud at the Land Bank.




'Staffer stole almost R1m'


In the space of three months, a Department of Community Safety staffer allegedly managed to defraud it of almost R1-million, the standing committee on public accounts (Scopa) of the provincial legislature has heard.




Bank's CEO denies fraud

Johannesburg - The Development Bank's chief executive on Tuesday denied involvement in a reported case of fraud allegedly perpetrated by Land Bank officials.

Paul Baloyi was responding to a Sunday Times article which claimed he was one of Amber Mountain's directors. The company allegedly received about R300m in taxpayer's money from Land Bank officials to develop an upmarket equestrian estate in the KwaZulu-Natal north coast.

'Mbeki killed BAE bribery inquiry'

President Thabo Mbeki was involved in the African National Congress (ANC) leadership's blocking of a parliamentary investigation into alleged bribery by BAE Systems and other weapons firms in South Africa's biggest arms deal to date, according to a former MP who was driven out of the ANC for spearheading the inquiry.

Still no verdict on ex-cricket boss

Judgment in the R7.4-million fraud case against Diteko Modise, the United Cricket Board’s former financial manager, has been postponed — for the fourth time.

Food firm gets R99m fine

THE R98.7 million fine imposed on Tiger Brands by the Competition Commission for participating in bread-and-milling cartels sends "a very clear message" to other companies to stop price fixing, says the South African National Consumer Union.

The commission announced yesterday that Tiger Brands had been ordered to pay the fine, which amounted to 5.7% of its annual turnover, after admitting to its involvement in the cartels.


Tigon accused refuse to disclose financial status

FORMER Tigon CE Gary Porritt and former Tigon and PSG Guaranteed Growth Fund director Sue Bennett have refused a request from the Legal Aid Board to make full disclosure of all their trusts and financial standing.

Fraud probe begins

Auditors Ernst and Young have been appointed by Phalaborwa Mining Company (PMC) to probe allegations of corruption, nepotism and racism against the Palabora Foundation, a developmental organisation under the auspices of PMC.


Court told of Merc for tender

A former high-ranking KwaZulu-Natal Education Department official is on trial for accepting a R154 000 bribe, in the form of a Mercedes-Benz, for allegedly awarding his friends government tenders and for paying them for the work before it was complete.

The head of the investigation unit at the Department of Treasury was arrested for covering up these allegations and faces charges of defeating or obstructing justice.

R2bn fraud shock hits Land Bank

Johannesburg - Top Land Bank officials have siphoned off more than R2bn meant for farmers, to fund their close friends' and associates' ventures, the Sunday Times reported on Saturday.

The money was used for luxury golf estates, a sugar mill, equestrian estates and residential developments.

The fraud was revealed in a forensic audit by Deloitte, which was handed to the Cabinet this week by the Minister of Land Affairs, Lulu Xingwana.


How fat cats looted land bank billions

Cabinet calls for criminal charges after R2bn is siphoned off to fund associates’ business schemes.

Top Land Bank officials siphoned off more than R2-billion meant for farmers to fund their close friends and business associates’ luxury golf estates, a sugar mill, equestrian estates and residential developments.

This massive fraud was revealed in a damning forensic audit by Deloitte that was handed to the Cabinet this week by the Minister of Agriculture and Land Affairs, Lulu Xingwana.


Court boosts Tigon sleuths

POLICE investigators involved in the case against Tigon CEO Gary Porritt and fellow director Sue Bennett received a boost yesterday when the Supreme Court of Appeal ruled that seizure of documents by members of the office of serious economic offences was legal.

Until yesterday the police had been prevented from accessing about 400000 documents seized from three premises linked to Tigon because a Pretoria High Court judge had ruled that the search was “performed in an unconstitutional and unlawful fashion”.



Department cracks down on sub-standard builders 1


THE national housing department has commissioned the National Home Builders‘ Registration Council (NHBRC) to conduct a forensic audit on selected state-funded housing projects, starting in Transkei, to determine the extent of sub-standard housing in the Eastern Cape.


State stops R16m tender 2


The Standing Committee on Public Accounts (Scopa) in Limpopo yesterday recommended to the legislature that a R16,9 million contract awarded to former head of the department of economic affairs and finance, Ben Mphahlele, be terminated abruptly.


Cyber war intensifies 3


When the world entered the 21st century technological reasoning power became increasingly sophisticated, and so did cyber-crime.


Online misdemeanour, commonly referred to as cyber-crime, is a new type of criminal activity which started rearing its ugly head in the early 1990s as the Internet became a common place for online users worldwide.


But the long arm of the law is catching up with those who commit cyber-crimes.


Legal threat over corruption report


A lawyer representing suspended KwaZulu-Natal department of health head Busi Nyembezi has threatened to take Premier Sbu Ndebele to court if he failed to give him a report implicating his client in fraud.


‘Casanova’ captured at last


A Durban fraudster, dubbed “Casanova”, made an appearance in the Pinetown Regional Court yesterday.


Kevin Harvey, 30, was collared yesterday after nearly two years on the run. He had escaped while awaiting sentence.


A private investigator tracked Harvey down at a financial services company.




Kiwi nabbed in £150m scam


Wellington - A New Zealand national wanted by UK police over a £150m conspiracy to defraud the Bank of England has been arrested and is in custody, police said on Tuesday.




Former Mangaung mayor and others in court


Former Mangaung mayor Pappie Mokoena and eleven other people appeared in the Bloemfontein High Court on Monday in relation to charges linked to a Scorpions' investigation at the municipality.

Judge A Kruger postponed the matter to November 13, 2008.


Fake degrees cheat others – Samwu


THE South African Municipal Workers‘ Union and the SACP are calling on municipal manager Graham Richards to take immediate disciplinary action against managers who have misrepresented their qualifications to get senior posts.


Responding to The Herald‘s front-page report on Friday which revealed that about 58 degrees, diplomas and other qualifications listed on the CVs of some senior municipal managers were fake, Samwu provincial secretary Siphiwo Ndunyana said it had raised the issue with the municipal manager two years ago, but nothing had been done.




Top banks drawn into homeloan fraud probe


Four of the country’s top banks have inadvertently been roped into an allegedly fraudulent homeloan scheme totalling more than R1-billion.


On Thursday, the department of trade and industry launched an official investigation into a Pretoria company for contravening the Companies Act and Unfair Business Practices Act.

In addition, possible criminal charges are being investigated by the National Prosecuting Authority (NPA) against the Reverse Mortgage Company (RMC), which operated for just more than two years.




Public works accused of tender fraud


The Mpumalanga department of public works has been accused of fraud after a R500 000 construction tender was allegedly awarded to a company different from the one chosen by the bid committee.


'Police must probe Scorpions' - ISS


The police are obliged to investigate fraud and corruption charges against Scorpions boss Gerrie Nel if a criminal complaint has been brought, the Institute for Security Studies (ISS) said on Friday.


Doctor bust for fraudulent grant claims


A medical doctor and his co-accused will appear in the Port Elizabeth commercial crimes court today on charges of fraud involving social security grants.


Dr Adekumle Fagbuyi and Ntomboxolo Makeleni are facing charges of defrauding the state of about R440676.




Risk management ineffective in local industrial sector


The local manufacturing and industrial sector does not have the kind of security systems needed to effectively manage and protect its interests despite the growing and diverse risks, reports local electronic security equipment company Elvey Security Technologies.


Beware of this scam


A company advertising firefighting training and jobs is nothing but a national crime syndicate, says a statement from the City of Cape Town's emergency services. It says "thousands" of job-seekers are being conned into paying hundreds of rands only to see the scam artists disappear with their money.