Do we need an A-team to fight fraud and corruption in SA?
In response to the question “Do we need an A-Team to fight fraud and corruption in SA?” on the front page of the December 2016 issue of Servamus: December 2016 edition, I would like to react as follows:
I have in excess of 48 years' experience (of which 28 years was spent in the Commercial Branch of the SA Police Service) in the investigation and combating of commercial crime in South Africa and abroad. Most anti-fraud experts concur that, no matter how well written the rules, policies and procedures may be, institutional fraud will always spike upward. Regardless of the economy's vicissitudes in coming months or years, history proves that the "fraud problem" will undoubtedly worsen. Mr Warren Buffet, American industrialist, once remarked: "In an economic slump there is a double threat - old frauds are being exposed and new frauds surface. Only when the tide goes out you discover who's been swimming naked."
In reality, no organisation is immune against fraud and can never be fully protected against determined fraudsters. Fraudsters always find loopholes or weaknesses in an entity's operations that they can exploit to steal cash, forge cheques, collude with vendors, steal confidential data, manipulate computer systems or commit any other offence that cause either financial or reputational damage or both. Despite the compulsory reporting duty in terms of section 34(1) of the Prevention and Combating of Corrupt Activities Act 12 of 2004, as amended, fraudsters often are not being held responsible and accountable for their wrongdoing. Sometimes organisations terminate their services but do not report them to the police because they have no faith in the police and the judicial system. This is one reason why fraud and related abuses are largely unreported and on the rise. In many instances guilty employees are not fired and their penalties and fines are minimal.
There is ample statistical evidence that fraud poses a serious threat not only to the organisation, but also to all employees who work for them. Fraud does not occur by itself: it is a human intervention. The many varieties of fraud are all creations of men and women. Similarly, people are the ultimate victims of fraud - even in cases where a huge corporation or entity is the apparent victim.
As the years go by, the nature of crime, the modus operandi followed by the perpetrators has become more sophisticated and so have the nature and methods of investigation. Fighting fraud is not a career for individualists or opportunists. It is not just a job - it requires commitment and passion.
To answer the question (of whether South Africa needs an A-team to fight fraud and corruption): The answer is "Yes, we need (and I might add) a dedicated, well-qualified A-team to fight fraud and corruption in South Africa."
Here is the good news: we also do not have to go out and recruit - they are already there! The SAPS must just harness and embrace them! Many skilled fraud investigators are employed by big corporations, statutory investigative bodies, government departments, private companies and private forensic investigators serving individual corporate clients. In recent years, the ability of the SAPS to conduct investigations into sophisticated fraud schemes has declined, leading to an increase in the number of private investigators. Furthermore, there is a perception that only the SAPS have the legal mandate to investigate crime and fraud per se. The High Court has expressed its acceptance of the fact that private and corporate investigations are performed in the matters of S v Botha and Another (1) 1995 (2) SACR 598 (W) and S v Dube 2000 (1) SACR 53 (N). In the S v Botha case the presiding judge remarked as follows: "Society has become so specialised and there are so many laws and activities that need to be administered and regulated, that no police service can investigate and prevent all crime in a modern society without the help of private institutions."
Private investigators, when accompanying their clients to report a fraud matter, are often treated by police members at SAPS Community Service Centres in a manner that borders on defeating or obstructing the course of justice. Apparently each individual SAPS member at a police station follows his/her own ideas and self-formulated policies and procedures on what to accept or not to accept for case registration and investigation. Often we are sent from pillar to post and it is usually very clear that some SAPS members are kicking the ball for touch. It is always a matter of "them" and "us".
Well-qualified fraud investigators in the private sector can serve as a strong force multiplier. If we can work together in a professional way, we will be the required and successful A-team to fight fraud and corruption efficiently. Strong perceptions and prejudgement will only benefit the offenders and bring us nowhere.
Lt-Gen Manie Schoeman, SOE
(Retired, South African Police Service)
MS EXPERT FRAUD INVESTIGATIONS