Commercial crime under the spotlight

September 2002 Security Services & Risk Management

The consolidation of SAPS commercial crime squads into effective regional units will have a considerable impact on white-collar crime countrywide. Deputy national commissioner Louis Eloff said these units would specialise in more complex and potentially damaging crimes.

"This is not to say that smaller cases of fraud will not be adequately attended to. There is enough expertise to deal with issues such as forged and fraudulent cheques and other cases of fraud within SAPS to ensure that all cases are handled effectively. If necessary, difficult cases can be escalated to the specialised units." He said the new specialised units would be staffed according to the amount of white-collar crime in specific regions.

Tom Bouwer, who heads up the Business Against Crime commercial crime project, said consolidation of commercial crime squads into more effective regional units would go a long way to regaining control of white-collar crime. "There is no question that it is a very serious problem. At present, more than R40 bn a year is being siphoned off the economy by white-collar criminals - more than is being earned by the entire tourism industry. In addition, we have lost considerable amounts due to foreign investment not happening at the scale that we need to create jobs."

Howard Griffiths, managing director of private investigations company Griffiths and Associates, said white-collar crime had become a serious threat to the economy. "Based on our experience, I believe we need more and better trained commercial crime specialists in the South African Police Service, which the present restructuring seems to address." Responding to the latest KMPG fraud survey, which for the first time included the public sector, he said the massive 13% leap in employee fraud reported since the last survey in 1999, probably erred on the conservative side. "Every single one of our clients are reporting figures much higher than this and it was for that reason that we established a separate division of the company to address the problem." Griffiths said their experience had shown that as much as 70% of employees in some businesses acted dishonestly often leading to the demise of their companies.

While technology has been touted as the ultimate solution for putting a stop to commercial crime through new and improved computer systems, it has in fact become a two-edged sword, Griffiths said. "Despite all the safeguards in use today, computers have made it a lot easier for highly skilled computer experts to commit fraud on a gargantuan scale compared to their forebears who had to cook the books with pen and ink. "Through techniques such as rounding off small amounts to the nearest cent or five cents and diverting the proceeds to a bogus bank account, billions have been skimmed off the accounts on unsuspecting bank account holders."

He conceded that banks and other financial institutions had tightened up on accounting procedures but he said evidence uncovered by his investigators showed that fraud in general was still being committed on a massive scale. "The thieves are getting smarter and unless we can oppose them on an equal and level playing field, business is going to lose out," he concludes.

For more information: Howard Griffiths, Griffiths and Associates, 011 786 8556, or Tom Bouwer, Business Against Crime, 011 883 0717.





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