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Reversal of fortune
| Date: |
23 October 2005 12:00 |
| Show: | Carte Blanche |
Friday morning in inner city Johannesburg and the Hillbrow police are assisting private detectives from East London in a sting operation. They are after cheque fraud syndicates that have scammed hundreds of small businesses countrywide.
A retired cop with over 30 years of experience, Daryl Els, recently teamed up with investigator Christian Botha. His files contain over 30 fraud cases involving more than R900 000 in East London alone.
[Daryl and Christian on screen in telephonic discussion regarding receipt of fax]
The latest form of cheque fraud is the refund scam. The hoaxers research their prey, targeting small businesses. They inveigle a quotation on goods or services and then deposit a phoney cheque for much more than quoted.
The deposit slip is altered to reflect a cash deposit and faxed to the business with an urgent request for a refund. After three days the cheque bounces, and the gullible or trusting are burned.
Anita Smith (business owner): 'Everybody says, 'How could you have done that? How could it happen?' I said, 'It's very easy, if you are an honest person... I mean it can happen to anyone.''
Anita Smith was one of East London's early victims. In April her sign-writing business received an order from Johannesburg worth R14 000. As usual, she asked for a deposit. She got much more than she expected.
Anita: 'I phoned this person. I said to him that something had gone wrong. R30 000 had been deposited instead of the R14 000. So he said, 'Oh please don't tell me that. Everybody's money was lying on a counter and they just deposited it into one account' ... Could I please re-deposit?''
She made the refund, but the stolen cheque bounced and her small family business was down to the tune of 22 000 [rand].
Anita: 'It was awful. It felt as if the whole world had closed in on me. I actually sent him a fax... a letter. [She reads the letter] 'Hi Gerald, There seems to have been a big mistake. I beg you to re-deposit the money, which you owe me. I cannot survive with this (that) has happened. I know that deep down inside of you, you have a heart. I'm a broken person. I really did trust you.' And I didn't hear anything after that.'
When the police didn't act she turned to Daryl Els. His investigations led him to hole-in-wall phone shops in Johannesburg like these... temporary headquarters for the rip-off mechanics.
Devi Sankaree Govender (Carte Blanche presenter): 'It started off as a trickle. Then it became a flood. Carte Blanche has been inundated with letters, e-mails and faxes from people who have been scammed.'
Daryl Els (private investigator): 'We were informed at a meeting of all the forensic departments of the different banks that there were over 600 cases that they were aware of.'
Devi: 'How do you go about catching them?'
Daryl: 'The paper trail is what leads us to the fraudster. To specifically follow the trail back to him.'
John Oatley, an East London businessman, became suspicious when a quote for R1 200 was followed by an 'over-payment' of R10 000. He contacted Daryl and strung the crooks along, pretending he would make the refund.
In Johannesburg Daryl and his team beat the crooks at their own game, concocting a deposit slip to be faxed to the syndicate runners.
A hidden camera monitors the suspects as they enter this Hillbrow phone shop to collect the fax.
In less than a minute the detectives and police pounce, getting the owner to point out the suspects. After a hectic chase through grimy Hillbrow alleys, two Zimbabweans - suspected syndicate runners - are collared.
Suspect: 'I don't steal. How can I steal money when I stay suffering?'
The two suspects are taken into custody by the Hillbrow police.
Christian Botha (private investigator): 'There is irrefutable, substantial evidence to prove beyond any reasonable doubt that they took possession of the documents. We have got witnesses to that fact.'
They weren't the only people doing dodgy business. The operation also netted a deposit slip, not yet altered to reflect a cash - instead of a cheque - deposit.
Daryl: 'They use Tippex.'
Devi: 'As simple as that?'
Daryl: 'By faxing it... it comes through pretty clear that it would look as if the thing hadn't been altered.'
Pierre Steyn (MD, SABRIC): 'Don't accept a deposit slip at face value... especially if it's faxed. Take the trouble and time to check it out with the bank.'
Pierre Steyn is MD for SABRIC, a Section 21 company that deals with security and risk issues for all the major banks. He says the deposit slip scam has been moving through different industries for about three years.
Pierre: 'Once the tourist industry gets wise to that, they would go to another industry such as the fitment centres or tyre centres and so on. Even pet shops. And you'll appreciate the fact that a pet shop owner does not really take notice of what is happening in the tourist industry'
The scam artists are a wildly inventive bunch, changing their business identity to suit the occasion. A bogus taxi association will ask optometrists if they can prepay for eye examinations of ten taxi drivers. They'll place orders for anything from steam cleaning to pizza. They'll even pose as priests with a church choir in need of collective tooth whitening.
In fact dentists are flavour of the day. A practice in Harrismith contacted us after being approached by a so-called model agency boss with ten models in need of brighter smiles. We called the impostor, posing as the oral hygienist.
Taped conversation:
Mr Khumalo: 'I need them to be cleaned their teeth.'
Oral hygienist: 'Why is that?'
Mr Khumalo : 'They've been out of the country, so they ate something.'
Oral hygienist: 'And your company name is?'
Mr Khumalo: 'It's Nation Modelling School.'
Oral hygienist: 'Okay. And where will you be coming from?'
Mr Khumalo: 'Actually our headquarters [are] in Jo'burg. Is it possible that we can do the pre-payment?'
Oral hygienist: 'How would you like to do that?'
Mr Khumalo: 'That is by transfer, bank transfer. Give me your banking details if you don't mind. It's up to you how you prefer that we pay.'
Oral hygienist: 'I think we'd prefer a cash deposit. Would you be able to do that?'
Mr Khumalo: 'Yes.'
Oral hygienist: 'Alright. Thank you very much Mr Khumalo.'
Mr Khumalo: 'Thank you.'
Daryl Els suspected that a syndicate was hitting East London. A major breakthrough came when Christian asked him for help tracking down a slick con artist who scammed Peter Gregerson, General Manager of The Blue Lagoon Hotel out of R20 000.
Peter Gregerson (G M, Blue Lagoon Hotel: 'Dr Raymond Price. He was a card and a half. He was absolutely perfect. I've never seen a conman like it. The guy arrived at my hotel with a United Nations white doctor's jacket on and then he introduces himself as a psychologist treating tsunami victims from the Far East. He's on loan from the United Nations to Frere Hospital.'
Devi: 'As far as you were concerned he was the genuine article?'
Peter: 'Absolutely. He even had a prescription form and would quite happily prescribe to a person who was sick. He would leave early in the morning dressed as a doctor and he would come back in the evening at about six o'clock dressed as a doctor.'
Dr Price's bill was paid for with a stolen credit card and when the payment was reversed he disappeared. His unpaid phone bill suggests that he may have been the syndicate's point man in East London.
Christian: 'He was actually obtaining information on companies in the Eastern Cape to feed through to the syndicate to utilise that in their scam.'
Daryl: 'Dr Price's business cards were actually printed at a laundry in Kotze Street in Hillbrow. And this is where we made our initial arrests in the cheque fraud scam.'
Peter: 'And all the addresses started coming out. He had three girlfriends in the Tshwane area and then it just got bigger and bigger and bigger and we just realised that we had probably just scratched open the whole syndicate.'
Within a week the cheeky charlatan was tracked down and apprehended in Johannesburg, en route to London. Dr Price is now in prison, awaiting trial.
Peter: 'He phoned asking if he could settle. I said, 'Well thanks for the phone call. I'm thinking of you too... say hi to baba for me'.'
Devi: 'Why do you do what you do?'
Daryl: 'The feeling of satisfaction at the end of the day when you have made a positive arrest. And then the adrenalin rush.'
Christian: 'We use an Uno. We don't have a Ferrari. So no, it's not as glamorous as [on] the movies.'
They may drive a small car, but in six months Daryl and his team have apprehended seven suspects, including the two who tried to scam John Oatley.
John: 'It looks as though the team here, including SAPS, have put together a good paper trail and it seems as though all the evidence is in place to secure a conviction.'
But after a weekend in the cells, they were released, as were the other five!
Devi: 'How does that make you feel?'
Daryl: 'Totally disillusioned. The man hours that are put into an investigation and securing a positive arrest with positive evidence to link the suspect to a specific crime... and at the end of the day we hear that the suspects have all been released.'
Devi: 'What's going wrong?'
Daryl: 'It's either shoddy detective work that's been done by the police in the follow-up operations or there's a problem with the courts.'
Christian: 'And maybe they're also despondent with the justice system. That they eventually open up a docket, spend hours taking statements... hand it over to the prosecutor, and the prosecutor says, 'No, we're not going to prosecute.''
Joe dos Santos, from Turfontein Johannesburg was taken in a related scam for 22 000 [rand] when his secretary dispatched goods paid for with a pilfered cheque. The same man who deposited the cheque, collected the equipment... when he hit another, similar business, he was arrested.
Joe dos Santos (business owner): 'But unfortunately, as a result of poor police work and not having the correct forms in place, and because the case was remanded, I believe that the suspect has now been released and the prosecutor has withdrawn the case.'
Director ADR Khana (Head SAPS Commercial Crime): 'That's one avenue that we as SAPS will have to look at. To maybe sensitise and educate our members.'
Director Khana, head of the SAPS Commercial Crime Branch, says deposit slip scams are a major concern.
Khana: 'The problem is escalating by the day and so many people get hit all over the country.'
Devi: 'In your opinion are big syndicates involved?'
Khana: 'How big they are is still an unknown factor to us, but we do know that there are syndicates operating. Within that syndicate there will also be two, three, four or five that will go on the side and also do their own sideline job.'
Devi: 'There have been dozens of arrests. Why so few convictions?'
Pierre: 'There are various activities that lead up to the final gain: opening of a bank account, fraudulent ID, use of a cheque book and so on. You must have some sympathy with the investigator and with the prosecutor who is faced with an enormous task.'
Khana: 'I am actually looking at approaching the prosecution. See that we charge all these runners and not withdrawing because of fear of not having successful prosecution in court. But let's charge them.'
It is from these gritty streets that the tentacles of the fraudsters spread all over South Africa. Our investigations led us to a major source for cheques used to defraud hundreds of small businesses.
The underground trail led us to lowlife bars in Yeoville where housebreaking and armed robbery gangs keep the drifters supplied with the stolen cheques they use to make fake deposits.
Middlemen on street corners sell cheques, some stolen, some cloned, some from inside the banking system, at just R30 a leaf.
The kingpin cheque supplier operates from this bar - the aptly named 'Rich Man Poor Man'.
We bought nine cheques and took them, along with our hidden camera footage, to the police. So far they are tight-lipped on their investigation.'
Khana: 'We did effect an arrest, but I think that is as far as I will go on the matter.'
The cheque used to defraud Joe dos Santos was traced to someone who had never even had a cheque book in his hands.
Joe: 'The account holder then told me that that cheque book - the complete cheque book - had been stolen from within the banking system. On that particular cheque book, he insinuated to me that fraud - to the tune of about a million rand - took place.'
During our investigation we were offered whole cheque books from within a certain bank.
Devi: 'So there could be corrupt staff within the banks?'
Pierre: 'Anything is possible. The bank will, if held responsible for neglect, be willing to reimburse the client.'
Peter: 'Of course they pass the buck. They're there to make money. They don't want to be out of pocket.'
The banks say they do everything they can under the Financial Intelligence Centre Act to check the credentials of account holders. Even so, the fraudsters remain one step ahead.
Khana: 'We do face situations where we do come to account holders' statements [and] to find that everything is false.'
Devi: 'What's your advice to prevent fraud?'
Pierre 'If the fraudster detects gullibility or an eagerness to do business - especially a new business...then that presents a window of opportunity.'
Khana: 'There's also a sense of greed. People just want to make money, make money, make money. And they are totally reckless to what can be happening around them.'
Peter: 'From a business perspective you need to stand up and be counted. You need to say, 'Enough is enough. If you want to rip me off I will lay charges against you'.'
Daryl: 'Don't take them into your trust, and stick to your guns. They're going to phone and pester you for hours every day.'
IMPORTANT DISCLAIMER:While every attempt has been made to ensure this transcript or summary is accurate, Carte Blanche or its agents cannot be held liable for any claims arising out of inaccuracies caused by human error or electronic fault. This transcript was typed from a transcription recording unit and not from an original script, so due to the possibility of mishearing and the difficulty, in some cases, of identifying individual speakers, errors cannot be ruled out.
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