Members of the public and RAF who perpetrate fraud are being cracked down upon
With yearly claims payments of more than R21-billion, the Road Accident Fund (RAF) attracts the criminally minded in the same way a flame attracts moths. In some respects, the institution’s huge coffers, funded through a fuel levy, are also one of its weaknesses.
Detected fraud and corruption in the past year amounted to R175-million, which may be a small percentage of the RAF’s total disbursements, but still essentially would have robbed deserving accident victims of sorely needed benefits and medical care if it had gone undetected.
Paul Modipa, general manager of the RAF’s forensic investigation department says illegal claims — and certainly those that account for the larger cases — tend to be perpetrated by syndicates that collaborate to commit fraud. These syndicates typically consist of police officers who write up false accident reports, doctors who provide bogus medical reports, and lawyers who process the claims.
The department scored a big blow against a KwaZulu-Natal syndicate in March, arresting police officers and doctors for various fraudulent claims amounting to nearly R12-million. Over the past four years, other syndicates have been caught submitting false claims in the order of nearly R19.5-million (2014), R2.7-million (2012) and R92-million (2011).
“Fraud and corruption is rated the top risk by the RAF board of directors,” Modipa says. “Although we have not done a study of the actual losses, we estimate it to be between R150- and R200-million. We acknowledge the problem, and there are mechanisms to deal with it. We want to add a cyber component to help with detection, prevention, investigation and collaboration with law enforcement agencies to see the number of arrests increase.”
In the 2014/2015 financial year, Modipa’s department was responsible for the arrests of 232 people on 325 counts, and 158 people were convicted on 627 counts of fraud, theft or corruption. Unfortunately, the institution is not immune to some of its own staff members clambering on board the RAF gravy train. Modipa says one staff member was arrested on fraud and corruption charges for coercing a claimant to pay him R180 000 of a R1.3-million claim, and an additional R150 000 from numerous other transactions.
The cyber investigation capabilities that have been approved by the RAF board are considered only one of the weapons in the department’s arsenal to combat fraud. Cyber investigation will enable the RAF to use data analytics to detect suspicious activity and deter cyber crime directed at its systems.
“The proposed Road Accident Benefit Scheme (Rabs) will change the nature and value of benefits paid to accident victims, and also contains stricter penalties that, it is hoped, will deter criminals.”
“I think the Rabs will curb abuse. For instance, sections of the Bill direct administrators to adopt measures to detect, investigate and prevent fraudulent and corrupt activities. So now this mechanism is built into the Act, which means it becomes part of the operation of the organisation,” Modipa says.
“The administrator is also given power that it did not previously have. It says that we can subpoena any person who can furnish information of material importance concerning a matter under investigation.”
The legislation also stipulates a list of punishable offences (such as providing false or misleading information), which is aimed at touts who persuade individuals to complete false claims, as well as the individuals themselves. Naturally, members of syndicates would also be prosecuted under these terms.
These activities attract a fine of R1-million or a three-year jail sentence, while RAF staff found guilty of fraudulent or corrupt activities can be sentenced to three months in jail or fined R50 000.