As white-collar crime continues its upward spiral the commercial branch of the South African Police Service (SAPS) has come under the spotlight. Questions are being asked about its effectiveness and purpose.
White-collar crime has risen by 12,6% in the past financial year and the highest number of incidents (61 690) in six years was recorded in 2006/07.
When the statistics were released earlier this month, little mention was made by the SAPS about the fight against corruption, fraud, 419 scams or tax evasion, which fall into the white-collar category.
The SAPS rarely sends out press statements about successful projects by its commercial branch and its office for serious economic offences. This is in sharp contrast to the Scorpions, whose high-profile cases are known, and the Special Investigating Unit (SIU), which has proved successful in the prosecution of fraud involving social grants and driver’s licences.
”A drop in the ocean” is how a well-placed source in the financial sector this week described the contribution of the SAPS to fighting white-collar crime. ”The number of vacancies they have is enormous. And if positions are filled, it is with people who are just in search of a promotion.”
But, says Captain Nicolaas Geldenhuys of the branch, the perceived ineffectiveness is a ”misconception”. The SAPS provided the Mail & Guardian with 13 examples of large commercial crime cases under investigation.
The gravest of these is a pyramid scheme in Port Elizabeth in which investors were allegedly defrauded of R155million. Six people are charged with fraud and contravening the Bank Act.
Geldenhuys says the large number of cases on which the SAPS and SIU are collaborating is the reason for the increase in commercial crime. These include fraud probes on scams in housing projects, driver’s licences, social grants and pension funds.
”There has been a considerable increase in the number of cases received in respect of the above. Likewise, the number of arrests, first appearances and convictions has increased.”
Geldenhuys says the commercial branch operates within a ”fixed mandate” and concentrates on ”more complex and specialised cases”.
The statistics for 2006/07 indicate that 45% of the branch’s reported cases are for ”other fraud” (this category excludes credit card and cheque fraud, which makes up a large percentage of the branch’s cases). Only 126 corruption cases were reported (0,6%) this financial year.
KwaZulu-Natal (27,5%) and the Eastern Cape (26,8%) saw the biggest rise in commercial crime. Geldenhuys attributes this to ”specific projects aimed at eliminating and combating fraud and corruption where government departments were targeted”.
The commercial branch consists of five operational groups: banking-related crimes, intellectual property rights, statutes and fraud, serious and financial crimes and electronic crimes.
There are 17 commercial branches in the country, five task teams that serve as satellite units and the office for serious economic offences.
This capacity should be expanded, says Susan Potgieter of the South African Banking Risk Information Centre (Sabric).
Sabric’s other areas of concern are the lack of detectives at commercial branches, district courts not being incorporated into the specialised commercial crimes courts (SCCC) and mentorship programmes that should be expanded and enhanced.
”Resources are an issue of concern,” says Potgieter.
She believes the crime-fighting ability of the SAPS will increase if district court matters concerning commercial crime are brought under the SCCC.