Tag: fraud

By Alex Mitchley for News24

A former First National Bank employee has been arrested in Limpopo for allegedly stealing over R36-million from a deceased client.

On Friday, the Hawks’ Serious Commercial Crime Investigation Unit arrested the 28 year-old suspect, who worked as a FNB consultant at the Makhado branch.

According to Hawks spokesperson Captain Matimba Maluleke, on 25 April 2022, the suspect allegedly opened a profile without any authorisation of the client who had just died in a vehicle accident a day before.

“It is further alleged that the suspect connived with his accomplice to open a new bank account and linked it to the deceased’s account and started spending all the money from the deceased’s account,” Maluleke said.

“These illegal activities were discovered by the bank and a case of fraud and theft was opened with the Hawks.

“When the suspect was approached by the bank managers about the matter, he reportedly tendered his resignation letter with immediate effect.”

Maluleke said through the investigation, it was discovered that some of the stolen money was used to buy expensive cars and donate to a certain church.

A total of R36 989 051.67 was allegedly stolen.

The suspect was expected to make his first appearance in the Makhado Magistrate’s court on Monday 13 June.

By Rual de Vries for MyBroadband

The Communications Risk Information Centre (Comric) says that relying solely on collecting customers’ biometric data to curb SIM swap fraud won’t do the trick.

Comric is a non-profit organisation established by MTN, Cell C, Telkom, Vodacom, and Liquid Intelligent Technologies.

Its goal is to identify, prevent, and mitigate risks within the South African telecommunications industry.

The Independent Communications Authority of South Africa (Icasa) published draft regulations in March 2022 that would require mobile network operators to collect subscriber biometric data.

Icasa said these regulations would reduce instances of mobile number hijacking via fraudulent SIM swaps and number porting.

The South African Banking Risk Information Centre crime statistics showed that fraudulent SIM swap incidents nearly doubled in 2020 — from 11,646 in 2019 to 22,285 in 2020.

Scammers use these techniques to take control of targets’ cellphone numbers and access their Internet banking applications.

In response to Icasa’s proposed regulations, Comric met all of the country’s mobile network operators to examine the implications and feasibility of biometric data collection.

MyBroadband asked Comric what consensus mobile operators came to during the forum.

“As biometric data is indicated as [Icasa’s] solution [to fraudulent SIM swaps], the telecommunications industry would like to explore alternative solutions,” Comric CEO Vernall Muller said.

“Biometrics is but one of many strategies to use — to require operators to implement only biometrics is taking a single approach solution, which is not the silver bullet.”

Although Comric members agree that SIM swap fraud is a problem, they said that other issues require attention in the short to medium term.

“Less than one percent of SIM swaps performed annually are fraudulent,” Comric said.

“SIM swap is but one problem, whereas identity fraud is much more problematic.”

Comric noted that the telecommunication industry already has a dedicated workstream focused on reducing the number of fraudulent SIM swaps and implementing mitigative measures.

Besides being too limited in scope, Comric said that there are several challenges and limitations to collecting subscriber biometric data.

“For operators who use direct customer touchpoints across South Africa in the informal and rural areas, implementing biometrics will have immense cost implications and logistical challenges,” said Comric.

“Operators that use wholesale channels do not appoint their own agents in the distribution channels, which means they have no control or visibility over the implementation of biometrics,” the association added.

“Should Icasa’s proposed changes get adopted, it will require extensive changes to existing systems and databases.”

Therefore, the forum attendees agreed they should be allowed to present Icasa with a timeline regarding biometric data implementation.

“The implementation should be done in a flexible manner, where operators are given leeway to decide what is best to accommodate all consumers,” the association said.

“In the interim, the telecommunications industry, Comric, and ICASA should engage further to identify the core of the problem we want to solve, identify temporary solutions, and create a long-term plan to implement biometrics.”

 

Blue Label Telecoms uncovers massive fraud

Source: MyBroadband

Blue Label Telecoms has uncovered a large fraudulent scheme, operating since 2015, perpetrated by two former senior executives of a subsidiary company.

The fraudulent transactions were performed primarily outside the course and scope of the subsidiary’s field of commercial dealings.

The senior executives interposed themselves between intermediary companies and the subsidiary for their own benefit.

Blue Label identified transactions that amounted to a theft of funds from the subsidiary, which the executives tried to conceal.

The company signed settlement agreements with the executives in late October 2021, where most of the assets of the executives were signed over to Blue Label.

The value of these assets as of 31 October 2021 amounted to R315 million, which indicates the scale of the fraud.

“Subsequent to the fraud investigation and detailed review of the control environment and business processes within the subsidiary, management has implemented the necessary improvements relating to the existing control environment,” Blue Label said.

The company now holds Powers of Attorney over the assets of these executives. They are listed in the table below.

Commenting on the “immovable properties”, Blue Label said it is not its intention to acquire legal title to the properties or keep the rights long term.

It is, therefore, actively marketing these properties and expects to sell them all within the next twelve months.

All the money found to be held in the bank accounts of the perpetrators has been transferred to Blue Label’s bank accounts.

As of 30 November 2021, properties to the value of R8.5 million have been sold.

 

By Lwandile Bhengu for News24

The Absa engineer and his wife charged with stealing more than R100-million from the bank have been granted bail of R50 000 each.

Dressed more modestly than when they first appeared, Xolela Masebeni and Athembile Mpani made their third appearance in the Palm Ridge Specialised Commercial Crimes Court on Wednesday.

Masebani, a specialist engineer who worked in Sandton and earned R52 000 per month, is accused of stealing R103-million from the bank and allegedly transferring the money into six different bank accounts over four months between September and December 2021.

Mpani, who is also the mother of Masebani’s three children, is alleged to have benefitted from the money. The couple face charges of theft, fraud and contravening the Prevention of Organised Crime Act.

In bail judgment, Magistrate Phillip Venter said that although there was no doubt that there was a reasonably strong case to be built against the two, the State had not proven that it was in the interest of justice to deny them bail.

During their bail application on Monday, investigating officer, Captain Oscar Molahlehile Mopeli, told the court how the couple had allegedly spent over R200 000 on a shopping spree at luxury stores in Sandton. They are also said to have purchased seven cars with cash over a short period of time, as well as two properties in Khayelitsha.

In his bail affidavit, Masebani told the court that he owned three cars, while Mpani, in her affidavit, said that she owned three cars. The couple intend denying the charges against them.

Mopeli testified that the majority of the money was transferred into Masebani’s and Mpani’s accounts, while the rest was transferred to people known to Masebani.

Some of the accounts have been frozen.

Third suspect arrested

Arguing against bail, prosecutor Sharon Masedi said that, because Masebani was an IT specialist, the State was concerned that he would conceal evidence vital to their case. She also said that the couple had not been co-operative in assisting the State in finding the cars allegedly bought through the proceeds of crime.

Venter questioned Masedi on the fact that no person facing a criminal charge was obliged to give the State information that might incriminate them, and that he could not compel anyone to do that.

He added that the State had not presented anything to substantiate the claim that Masebani, in particular, would try and conceal evidence.

As part of their bail conditions, they must report to their nearest police station twice a week, they must inform police when they leave for the Eastern Cape, they must not apply for any travel documents, and must reside at the same address they gave in their bail application. They must also not dispose of any assets that they mentioned in their affidavits.

In addition, Masebani is not allowed to set foot in the Absa branch where he worked, contact its employees, or access any of its information.

Meanwhile, a third person, who allegedly received R74-million of the money, has been arrested in connection with the case.

Gershom Matomane was arrested in Cape Town on Thursday and appeared in court on the same day.

Matomane is expected to appear again in Palm Ridge Court soon, while Masebani and Mpani will be back in court on 14 March.

 

By Babalo Ndenze for EWN

The Special Investigating Unit (SIU) said one company owner used over 1 000 ID numbers to defraud the Unemployment Insurance Fund (UIF)’s temporary employment relief scheme (TERS) of over R100-million.

The SIU on Wednesday told Parliament’s finance watchdog Scopa that the UIF was the victim of fraud by companies and state employees.

SIU chief forensic investigator Johnny le Roux said a certain Mr Simbini, a private individual and sole director of a company called Impossible Services, submitted over 6,000 TERS claims for non-existent employees.

“According to the records, the only registered employee of Impossible Services was Simbini himself. There was, therefore, no other registered employees for Impossible Services that TERS money could be claimed for. The money was paid into the bank account of Impossible Services and at that stage, R110 million was preserved.”

Le Roux said phase one of the investigation focused on state employees who received a TERS benefit during COVID-19.

He said at least 6 000 employees were identified within 24 government departments with the assistance of the Department of Public Service and Administration.

The Eastern Cape had over 500 cases: “In the Eastern Cape, you would notice that there were at least 501 matters in eleven departments amounting to R106-million.”

The SIU said a number of officials had been charged and disciplined, while millions of rands had recovered.

 

A new fake online shop is scamming South Africans out of money by claiming to sell stolen goods recovered from the looters who ransacked stores in July’s unrest. This is according to a recent report by MyBroadband.

  • Bulksales.store was brought to the attention of MyBroadband after one of our forum members asked whether it was a scam site
  • It has one Hellopeter rating was available — a negative review from a customer claiming to have lost money and stating that the store was a scam
  • The site looks clean, with a professional-looking design
  • It carries huge discounts on premium tech products, which included products like an Xbox Series X selling for R6,000, a discount of 50% from its normal price R12,000
  • The site claims that it was selling the items “so that all looted store (sic) can get their insurance payouts”
  • Major retailers like Game, Makro, Incredible Connection, HiFi Corp, Matrix and iStore were shown on the page, implying that the recovered loot was originally from these stores, but such stores deny they are reselling stolen goods
  • Contact Us section had a warehouse address which was actually an office space
  • No contact number available, only an email address
  • Plagiarised Terms and Conditions copied largely (83%) from a business-to-business marketplace called Lantador
  • Suspicious Return/Refund section was generated using a generator tool
  • Expensive courier options with a R1,800 Express option.
  • Unusually long delivery times ranging from 3 (Express) to 31 days (Standard)
  • The support phone number was listed on Truecaller as “Scam”

By Londiwe Buthelezi for News24

With Covid-19 waging a brutal war on human life, 2020 became one of the toughest years for insurers as death claims surged to levels not seen in recent history.

Insurers paid R522.7-billion to policyholders and beneficiaries in 2020 after fielding almost half a million (434 216) legitimate death claims.

But the industry had to deal with another epidemic: fraudulent claims which sought to fleece the industry R587.3 million.

Those providing funeral insurance were the hardest hit as 2 282 of the reported 3 186 cases of fraudulent claims related to funeral cover.

From a desperate family that laid a dead body on the road so that it can claim accidental cover to syndicates who buy dead bodies or prey on drug addicts, fraudsters had plenty of tricks up their sleeves.

The insurance industry’s representative body, the Association for Savings and Investment South Africa (Asisa), said it was not surprised. Even before the desperation brought by Covid-19 as people lost incomes and some stayed with bodies they didn’t know how they’d bury, insurance fraud was rife in SA. In 2019, SA insurers reported 2 837 fraudulent and dishonest claims to the value of R537.1 million.

READ | Unlawful for insurers to push exorbitant funeral cover increases, says regulator
Megan Govender, the convenor of the Asisa forensics standing committee, said funeral insurance has always been a soft target for fraudsters. But the Covid-19 pandemic has made it worse as the desperation due to job losses drove more people to resort to crime, especially because the excess deaths last year made it easier to source dead bodies for fraudulent claims.

“Since funeral insurance policies do not require blood tests and medical examinations and are designed to pay out quickly and without hassle when an insured family member dies, criminals and dishonest individuals most commonly try their luck in this space,” said Govender.

Some hair-raising cases

Asisa said the buying of dead bodies often involves syndicates and mortuary employees. The syndicates buy dead bodies and then use them to claim against policies that were fraudulently taken out some months earlier. They usually buy unclaimed bodies.

Another modus operandi involving syndicates targets drug addicts and alcoholics from poor communities with a promise of a job to obtain their personal details and fraudulently buy funeral cover for them.

When the waiting period lapses, the syndicates then have to find a body, which could be done through the purchase from a mortuary. But Govender said in one incident, the syndicate tried to murder the addict they’d covered. But the victim escaped.

However, it’s not just the syndicates that insurers have to worry about. One family collected the body from the mortuary before the death was registered and “purposefully” placed it on the road. It reported a hit and run accident and submitted a claim.

Govender said cases of families so desperate for funeral cover payouts are common, especially when the person died while they were still under the waiting period that insurers impose. Some resort to these tricks as accidental death benefits have no waiting period.

As for the other insurance products, Asisa said there were 388 fraudulent life insurance death claims totalling R264.3 million. Policyholders submitted 325 fraudulent and misrepresented disability claims, 141 hospital cash-back claims, and 50 retrenchment claims. KwaZulu-Natal had the highest number of detected fraudulent claims, followed by the Eastern Cape.

 

Source: IOL

A senior supervisor of a stationery store in the Eastern Cape has been sentenced to three years imprisonment for fraud.

In a statement released on Wednesday, provincial spokesperson for the Directorate for Priority Crime Investigation (Hawks), Captain Yolisa Mgolodela said Ntombifikile Kati, 50, was sentenced in the Mthatha Specialised Commercial Crime Court.

She said an investigation into the matter revealed that over a period between February 2013 and July 2019, Kati who was employed as a senior supervisor at the Ink Spot (a stationery store) stole R30,000 (US$2,180) from the company.

Kati was arrested by the Mthatha Serious Commercial Crime Investigation team on November 15, 2019, after they were tasked to probe the matter.

On the day of her arrest she appeared in court and was subsequently released on a warning.

Mgolodela said a series of court appearances saw Kati convicted and sentenced to four years direct imprisonment of which one year was suspended on condition that she does not commit the same offence during the suspension period.

Subsequently, she will be serving three years in prison.

Mgolodela said the conviction and sentencing of Kati comes after her sister, Vuyokazi Kati, 37, was sentenced to 15 years direct imprisonment on April 26, 2021 in the Mthatha Specialised Commercial Crime Court without an option of a fine for theft to the value of more than R2.3 million.

Vuyokazi was a store manager for the same company.

 

Source: Jacaranda FM

The Hawks in Gauteng have arrested a second person in connection with a Cell C tender scam worth an estimated R130-million.

Gauteng Hawks spokesperson Ndivhuwo Mulamu says 39-year-old Adriraan Pillay was arrested in Germiston on Friday.

“It is alleged that Pillay and his co-accused, Ismail Adanjee Mohamed, 44-years-old, were both Information Technology (IT) executives at one of the well-known South African mobile network service providers.

“They allegedly colluded with a director of a contracted entity responsible for IT and network service provider, falsely inflated invoices which resulted in an actual loss of over R130 million from 2012 to 2019,” she said.

Adamjee was released on R50 000 bail by the Johannesburg Specialised Crimes Court last month.

Pillay appeared in the Palm Ridge Specialised Commercial Crime Court on Monday where he was also granted R50 000 bail.

Mulamu said the case is postponed to 14 April 2021 where he will be joining his co-accused, Mohamed.

 

By Bradley Prior for MyBroadband

Old Mutual has confirmed that a portion of its customers have been signed up to its policies without their permission.

This follows a reader telling MyBroadband that they had been subscribed to, and had been billed for, two different policies for which they had never signed up.

The reader, who is a teacher employed by the government, said five of their coworkers had been affected by similar issues over the past few years, and was aware of more teachers working elsewhere who had also been affected.

The reader had been billed for thousands of rand over nearly a year-long period. One of the policies was with Old Mutual and had been billed since November 2019, while the other was with Emerald Life and had been billed since April 2020.

The reason the reader only picked up on this issue many months after it had begun is that they do not get regular payslips from their state employer.

Old Mutual finds the problem
MyBroadband brought the matter to Old Mutual’s attention, and it investigated the situation.

Upon the conclusion of this investigation, Old Mutual told MyBroadband that there was indeed foul play at work.

“Our investigations identified individuals that had been signed up for Old Mutual policies without their consent,” said Old Mutual.

“The implicated parties have subsequently been dismissed and barred from conducting intermediary work.”

Old Mutual also confirmed that it cancels policies that are found to have been opened unlawfully and refunds customers in these cases.

Old Mutual told MyBroadband that the parties in question were independent broker agents who were licensed under the FSCA and accredited to sell Old Mutual products.

Following Old Mutual confirming the problem, the reader told MyBroadband that they were compensated for the full amount lost due to this fraud from November 2019 to October 2020, as well as an additional R500.

Old Mutual fighting fraud
Old Mutual noted that fraud and identity theft are an industry-wide issue, and said it “investigates promptly” and “takes decisive action” in such cases.

“Old Mutual is working with the Provincial Treasury Anti-Fraud Unit and the SAPS Commercial Fraud and Statutory Investigations Unit to gain insight into identifying such incidents earlier, more frequently and accurately. We also conduct regular Fraud Awareness training and engagements with employees,” it explained.

“Old Mutual has a zero-tolerance attitude towards Financial Crime and we take appropriate action against any employee or agent implicated in fraud.”

It also noted that it runs consumer education campaigns to ensure the public is aware of how this fraud can happen and encouraged customers to stay vigilant.

“We have consumer education campaigns to make the public aware of this type of fraud and encourage customers to remain vigilant.”

How to protect yourself against fraud
Old Mutual noted that its campaigns to educate the public on this type of fraud includes encouraging its customers to review their payslips and bank statements on a continuous basis.

This will help them to find and report any transactions that they deem to be suspect.

If they detect such deductions, Old Mutual said customers should contact them in one of the following ways:

  • Email: Complaintadmin@oldmutual.com
  • Call MFC Servicing Call Centre: 0860 607 000
  • Visit any Old Mutual retail branch
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