Insuring and murdering for money
South Africa, according to Garth De Klerk, Chief Executive Officer of the Insurance Crime Bureau, continues to move through increased economic hardship and infrastructure instability, in turn, the levels of poverty likewise are increasing. This challenge is now particularly prevalent, with the flat economy creating high levels of unemployment and creating economic desperation.
“South African households have become poorer with rising inflation actively eroding disposable income and our ability to save,” he said.
These increased pressures, according to De Klerk, have resulted in a significant uptick in a variety of crime types such as muggings, petty theft, house robbery, vehicle crimes, fraud, money laundering etc.“As The Insurance Crime Bureau, we encounter numerous types of crime, and see three main drivers being either opportunistic, poverty or professional syndicates,” he emphasised.
De Klerk unpacks these drivers, with some examples of each.
The drivers of crime
“A crime of opportunity is more spontaneous, committed without intense planning. The perpetrator sees that they have the chance to commit an act, and in that moment, they seize the opportunity. Examples would typically be lower value petty theft and fast track claims such as cell phones, keys, tyre claims etc. or even now more “topical claims” such as electrical surge claims, spoilt food etc.,” he said.
Poverty/economic driven crimes, according to De Klerk, are typically more physical and normally involve a third-party victim. Examples of these could include muggings, house and business robberies. Again, they could be smaller values but high volumes.
“Professional crime syndicates involve more organisation and planning by multiple individuals and can be quite sophisticated. Examples include kidnapping, murder for money, vehicles crimes such as hijackings and sophisticated vehicle thefts. These syndicates are also involved in identity theft and profile creation often resulting in money laundering and even terrorism funding schemes,” said De Klerk.
The trends in terms of crime
“Extracts from the crime stats, for the period April to June 2022, reflect that carjacking was up by 14% showing 5866 incidents; residential robberies are at 5 270 and contact crimes at a whopping 142 915 incidents in the three months,” he added.
“With specific reference to vehicle theft, we see professional gangs of car thieves targeting specific vehicles via CAN (the vehicle controller) attacks and relay attacks (where they target the remote entry systems of a vehicle). These crimes raise the bar of sophistication all the way to where in the future these crimes could be investigated and prosecuted as a cybercrime,” he continued.
In the life insurance industry, De Klerk said, “we often see groups of people insuring and murdering people for money. In many cases, such as SGT Rosemary Ndlovu, the victims are family or loved ones.”
Few more examples, found in the Insurance Crime Bureau’s 2022 annual report, also highlight murders committed for insurance pay-outs.
Information received from one of the Insurance Crime Bureau’s members led to an investigation that uncovered similarities to the Rosemary Ndlovu case. Six murders can be linked to the claimant at this stage, with the possibility of more, dependent on information pending from non-members. It is alleged that the claimant obtained life and funeral policies on her spouse and family members. She then made use of hit men to commit the murders for insurance payouts. Claims were submitted on four of her spouses and two on her stepsons, all of which were shot, and nothing taken from them. One of the deceased was run over by a vehicle upon his release from hospital and was shot and killed within an hour. The suspect in these cases is a government employee. The case is still ongoing, and intelligence has been shared with SAPS, who are leading the investigation.
Another example is that of the same deceased with different DHA1663 forms and death certificates. Following an enquiry from one of the Insurance Crime Bureau’s member companies for the alleged death of the deceased and several members replying with positive feedback, a formal investigation was established. The investigation identified and revealed that the claimants formed part of a syndicate operating from Umzinto KZN, who are involved in submitting fraudulent death claims to the industry. Upon reviewing the claimant documentation from two members, various discrepancies were uncovered, such as two different DHA1663 forms and two different death certificates allegedly issued for the deceased. The doctor, informant, and funeral undertaker’s details on both the forms differed, the cause of death on both the forms differed, of which one recorded the cause of death as natural and the other as un-natural causes. The SAPS stamp impression and the Forensic Pathology Services in respect of the alleged un-natural death, were found to be fraudulent as they do not resemble those of the relevant police station and government mortuary.
This, according to the report, is yet another example of how fraudulent claims can be stopped during verification stage, through the responsible sharing of information on all suspected criminal investigations.
Proactive crime combatting
These crimes, De Klerk said, continue to push the need for industry investigators to be ahead of these criminals, working together as an industry along with law enforcement, prosecutorial authorities, legislators etc. “We simply cannot successfully combat this organised scourge of crime in silos.”
To assist law enforcement in proactive crime combatting, De Klerk said they are considering developing an intelligence division aimed at detecting and combatting:
- Financial crimes such as money mules, money laundering, terrorism funding, illicit acts etc., and
- Physical crimes such as murder, kidnapping, human trafficking, missing people.
“There are always costs and efforts involved in mitigating these risks caused by these individuals who see fit to abuse the system. However, the success of a centralised intelligence model is clearly demonstrated in the Insurance Crime Bureau’s Annual Report for 2022 - showcasing extremely positive crime combatting results through the tremendous effort from all our members and stakeholders,” he said.
“In closing, we believe that to develop impactful solutions we need to adopt that attitude of “No problem can withstand the assault of sustained thinking” – Voltaire, and thus we feel that by adopting an attitude of “see something, say something”, we will have a more meaningful impact on fraud and crime in South Africa,” he concluded.