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The fraud threat is within, warns Justicia

The fraud threat is within, warns Justicia

Date: 2017-06-02

South African businesses are buckling under the cost of crime during tough economic times - but the perpetrators are often where companies least expect to find them.

"The threat comes from within," warns Reg Horne, managing director of Justicia Investigations, one of South Africa's largest privately owned investigation agencies.

He notes that businesses often spend large amounts on security to combat external threats without putting in place systems to counter internal ones. "Yes, you need visible security. But it will not matter if you have three or 20 security guards. If you do not know where the problem is, the threat remains."

Horne heads offices in Durban and Gauteng that have serviced an extensive corporate and private client base both nationally and internationally for 25 years.

"Currently, on-the-ground investigators have noted two interesting trends", he says. "The problem is not large corporate frauds but the ever growing number of smaller crimes that are constantly adding up - and these are usually perpetrated by employees further down the line and not by top management as might be expected."

Justicia's experiences at the coal face echo the findings of two important studies, according to Horne.

Embezzlement - theft by an accountant, bookkeeper or manager who diverts income and then covers it up - was flagged as a particular threat.

Horne says that recent Justicia cases, which have included the disappearance of large amounts of fertilizer between storage facilities at an agricultural processing company, the presentation of signed delivery notes for oil that had never arrived at its destination but had been sold off to a syndicate en route, the diversion of supplier payments to the banking account of an accountant's relative and the "sale" of fabrics from a clothing company warehouse were just the tip of the iceberg.

"Unfortunately, cases like this are happening daily. Businesses need to fight back to survive. Right now, they're under siege from their own staff as well as from opportunists who know how to exploit employees when times are difficult," he observes.

Horne adds that, even when the various schemes are engineered by crime syndicates, they are more often than not carried out by middle management and employees in positions of trust such as those receiving or despatching goods, supervising logistics facilities, doing the accounts and controlling

The only way to catch those who know the ropes extremely well is through intelligence driven prevention - and the only way to prosecute them effectively is to bring in experts.

"Our operations team has the experience and skill required to understand each unique situation and assess which tools would be best suited to solving the problem. Our investigators are well versed in the Criminal Procedures Act and work with the SAPS or independently in gathering admissible evidence, compiling a docket and leading evidence in court. Our extensive experience ensures that all cases are procedurally sound and are prepared with the ultimate objective of an effective resolution," he says.