More and more white-collar criminals are being caught and the courts are showing no mercy
Sharon Gill The subject of cheque fraud became a matter of personal concern for one of Absa’s clients in Pinetown when she discovered, to her horror, that a cheque she issued for R2E017,94 which was deposited into an account in New Germany that afternoon, was also cashed for R19E700 in Springs the same day.
On inspection the fraudulent cheque not only had a spelling error but also an unauthorised second signature. On the reverse of the cheque was a fraudulent signature and rubber stamp with the comforting words “Signature/funds verified”. And this, apparently, was the gap the crook went for. Although it was a substantial out-of-town cheque, that stamp and signature led the cashier to believe that the supervisor had verified the cheque, so the crook scooped his loot and scarpered. “To give credit where it’s due,” says the client, “Absa reimbursed me with the full amount of the fraudulent cheque within six days. We’re back to square one, but the bank is out of pocket.” “Our forensics department confirms that the cheque is identical to an authentic cheque,” says Deon Oosthuisen, ABSA’s group media relations consultant. “Since it’s not a stolen cheque, it appears to be an exceptionally clever forgery.” One of the hardest hit by white collar crime is the banking industry. Apart from cash-in-transit heists, armed robberies, ATM crime, credit-card scams and Internet fraud, cheque fraud is also rife. The 1999 figures have yet to be released but in 1998 cheque fraud cost the South African banking industry R151-million. The term “cheque fraud” covers a multitude of sins, from the deliberate issuing of cheques with no funds to cover them to stolen cheques, altered cheques and forged cheques.
“Technology has made things much easier,” says Charles Whyte, Standard Bank’s director of internal audit. “With computers and scanners and colour printers, anybody can make a colour copy which will sometimes pass exami-nation by the naked eye. But a watermark is embedded within the paper itself and can’t be copied, and if you tamper with a watermarked cheque you’ll end up with a very visible blotch on it.” However, South Africa’s fraudsters are highly experienced and highly sophisticated creatures. They don’t waste their time applying chemicals and inks to existing cheques; they simply print their own. “South Africa’s white-collar criminals are ingenious individuals,” says Whyte. “If we could harness that energy and use it productively, South Africa could be another United States tomorrow.” If you retain your old cheques for record purposes you’ll see how the paper on which they’re printed has evolved over the years. But within a month of introducing new watermarks and security features, the fraudsters either master the art of forging them or steal the paper on which cheques are printed.
“You could run the CCTV tapes to try to identify the person who cashed that cheque against the Absa client’s account,” says Whyte, “but these are generally the ‘runners’. Sometimes a runner is an innocent pawn, somebody doing a favour for a stranger who asks him to run into the bank to cash a cheque while he double-parks outside. The syndicate bosses never dirty their own hands.”
These criminals are keeping a host of people in full-time employment in the banks’ fraud investigation sections alone. “Banks have invested huge sums of money into Business Against Crime,” says Mossie Myburg, general manager of the banking council’s crime strategies department. “Most banks have their own internal fraud and forensic units, who not only investigate fraud already perpetrated, but also concentrate on fraud prevention.” According to Absa’s 2000 annual report, investigators in their dedicated forensic and investigations department are slowly winning the battle against fraud, theft and corruption. “Procedures are regularly reviewed and revised, based on new methods used by the perpetrators of fraud. The reduction in non-trading losses can partly be ascribed to the group’s clear message that crime will not be tolerated, and its commitment to partnering the government in its efforts to reduce crime.” The National Prosecuting Authority initiated a pilot project, the specialised commercial crime unit (SCCU), to ascertain whether a dedicated unit and court for the adjudication of commercial crime would be a viable proposition. “While we have not completed the ninth month of this year,” says advocate Chris Jordaan, head of the SCCU in Pretoria, “the statistics are indicative that the unit as such is a resounding success. “The Johannesburg regional court only managed 15 convictions pertaining to commercial crime in the year 1997. Compared to Johannesburg, our Pretoria statistics indicate a 350% improvement in successful prosecutions.
“Between January 1 2000 and September 5 2000 there were 59 convictions and only five acquittals, which translate into a 91% successful prosecution rate,” continues Jordaan. “Of those convictions sentence has already been passed on 45 of them; 13 received direct prison sentences, that is no option of a fine, no corrective measures, just straight time to be served. We have traced 27 of the 45 cases sentenced, with a cumulative value of over R5,5-million in potential and actual loss.” Cheque fraud only masquerades as a lucrative profession; it’s not really a career option. More and more fraudsters are being prodded by the sharp end of the SCCU’s big stick, and the courts are showing no mercy.