THE DIRECTORATE FOR PRIORITY CRIME INVESTIGATION SOUTH AFRICAN POLICE SERVICE

1. THE DIRECTORATE FOR PRIORITY CRIME INVESTIGATION SOUTH AFRICAN POLICE SERVICE AN OVERVIEW, WITH SPECIFIC Emphasis ON THE PREVENTION, INVESTIGATION AND PREVALENCE OF MEDICAL SCHEME FRAUD AND CORRUPTION AND THE PROPONENTS BRIGADIER NP OLIVER DATE: 15 -16 AUGUST 2013 GEMS 2013 ANNUAL SYMPOSIUM

2. OUTLINE OF THE PRESENTATION • Introduction. • The effects of fraud and corruption. • Criminal attacks on our systems. • Constitutional Mandate of the SAPS. • The establishment of the DPCI. • Mandate of the DPCI. • Objectives of the DPCI. • Main responsibilities of the DPCI. • The services provided by the DPCI. • Commercial Crime Unit Composition.

3. OUTLINE OF THE PRESENTATION • CCU: Operations at Unit level • CCU: Cooperation with other role players • International Cooperation • Special focus unit areas of the CCU • Supporting Legislation • Training and skills development • Operation Clean Audit

4. introduction • The economic security of a country influence investment. • This security is dictated by the ability of a country to prevent economic erosion. • Amongst the activities that feeds economic erosion is fraud. • The ability to commit fraud is enabled by corrupting the system. • The vulnerability of corrupting the systems depends on the willingness and effectiveness in implementing control measures. • Corruption create malfunctions in the system which is a fertile ground for organised crime. • Medical Schemes fraud leads to increased premiums

5. Introduction • In the background of GEMS it states that “Implementing GEMS provides government with greater control over the money it contributes to the private healthcare sector and also over the selection and quality of healthcare benefits to which employees contribute; • “Government is now able to directly influence the governance of GEMS because it is represented on the GEMS board of trustees. It is also represented during the annual revision of benefits and contributions” • Public funds are involved.

6. Effects of fraud and corruption • They undermine the fight against poverty by putting resources meant for access to proper medical care to lower paid government officials, into the pockets of corrupt officials, members and service providers. • They increase the cost of medicine and medical care. • They increase the members monthly and/or yearly contribution and strengthen the financial muscles of criminals. • They drain resources in fighting the symptoms of criminality. • Destabilize social, financial and medical security.

7. criminal attacks on our systems • The attacks by criminals, members, officials or service providers, on our systems are observed mostly in the following areas • Manipulating duplicate claims • Billing for services not provided • Inflating claims • Direct and indirect gratification • Medical aid card fraudulently used(family etc) • Over servicing(provider requests patients to come back unnecessarily) • Dispensing merchandise to patients

8. Constitutional Mandate of the SAPS • The mandate of the SAPS is derived from Section 205 of the Constitution of the Republic of South Africa Act 108 of 1996. • The objectives of policing are: • Prevent, combat and investigate crime. • Maintain public order. • Protect and secure the inhabitants of the Republic and their property. • Uphold and enforce the law.

9. THE ESTABLISHMENT OF THE DPCI • The Directorate for Priority Crime Investigation (DPCI) was established on 6 July 2009, and is represented in all nine provinces of South Africa as well as on national level • DPCI was created as a result of an amendment to the law (South African Police Service Act, 1995) • In terms of the law, persons must be appointed in the DPCI based on required levels of experience, training, skills, competence and knowledge

10. MANDATE OF THE DPCI • DPCI legally mandated and obliged to prevent, combat and investigate all national priority offences that require specialised skills in the prevention and investigation thereof, focusing on – • Serious Organised Crime • Serious Commercial Crime, and • Serious Corruption • Medical Scheme fraud normally falls within the mandate of serious commercial crime

11. OBJECTIVES OF THE DPCI • To employ a multi-disciplinary approach and anintegrated methodologyinvolving other state departments and institutions in its investigative practices (as stipulated in the SAPS Act, 1995) • To ensure that it has the necessary independence to perform its functions objectively, independently and effectively

12. MAIN RESPONSIBILITIES OF THE DPCI • The prevention, combating and investigation of national priority crime • The prevention, combating and investigation of organised crime • The prevention, combating and investigation of serious commercial crime • Maintaining the integrity of the DPCI • Providing financial and asset forfeiture investigation service • The prevention, combating and investigation of serious corruption

13. THE SERVICES PROVIDED BY THE DPCI • Legal Support provides legal guidance in terms of all crime investigation related activities of the DPCI, including operations, surveillance, bail applications, access to information, search and seizure, gathering of evidence, combating of crime and the investigation of crime within the DPCI mandate; rendering legal advice in respect of extradition and mutual legal assistance as well as providing legal training to investigators

14. THE SERVICES PROVIDED BY THE DPCI (2) • Anti-Corruption Investigations is responsible to manage the prevention, combating and investigation of corruption within the DPCI and defined parameters of the JCPS Cluster (Justice, Crime Prevention and Security Cluster), and to reduce the risk of unlawful, unethical and otherwise undesirable behaviour within the DPCI

15. THE SERVICES PROVIDED BY THE DPCI (2) • The Organised Crime Investigation Unit is responsible for preventing, combating and investigating serious and priority organised crime, including specific violent crimes such as cash-in-transit robberies and bank robberies, narcotics related crimes, crimes relating to precious metals, diamonds, non-ferrous metals, endangered species (rhino poaching, abalone poaching, crimes related to protected animal and plant species), organised motor vehicle theft and human trafficking

16. THE SERVICES PROVIDED BY THE DPCI (3) • The Commercial Crime Investigation Unit is responsible to prevent, combat and investigate serious commercial crime, which includes certain serious and complex types of theft and fraud, electronic and computer related crimes, certain types of banking related crime (fraud with counterfeit bank cards and cheques), serious corruption, fraud and theft within government, and certain statutory offences (relating to insurance, companies, tax, intellectual property rights etc) • The Commercial Crime Investigation Unit is thus duly mandated to investigate serious medical scheme fraud and/or corruption

17. THE SERVICES PROVIDED BY THE DPCI (4) • Financial and Asset Forfeiture Investigations investigates serious and priority crimes, focusing on financial investigation vide, inter alia, suspicious transactions reports, corruption reports and lifestyle investigations and renders support to investigators with financial investigations and asset forfeiture related investigations. • The Priority Crime Management Centre managestheassessment process of serious and priority crime threats at national and provincial level, guides and facilitates a strategic investigative approach for the DPCI

18. THE SERVICES PROVIDED BY THE DPCI (5) • The Electronic Crime Unit investigates serious and priority electronic and computer related crime, including different forms of internet related fraud, and renders assistance to investigators across the DPCI tasked with the investigation of serious and priority crimes. The ECU consists of investigators, crime scene responders and laboratory technicians who analyse electronic and computer equipment

19. COMMRCIAL CRIME UNIT: COMPOSITION • CCU consists of – • A National Head supported by a national personnel component – main responsibilities and tasks – maintaining standards, inspections and determining policy • A Serious Economic Offences Unit at national level – an investigation unit tasked with investigating serious economic crimes such as large investment fraud schemes and serious corruption cases • The Anti-Corruption Task Team (ACTT) - a multi-disciplinary investigation team consisting of DPCI investigators closely cooperating and working with investigators from the Special Investigating Unit (SIU), prosecutors from the National Prosecuting Authority (NPA), prosecutors and investigators from the Asset Forfeiture Unit (AFU) and the South African Revenue Service (SARS)

20. CCU: OPERATIONS AT UNIT LEVEL • Major units (e.g. Johannesburg, Pretoria, Cape Town, Port Elizabeth, Bloemfontein, Durban, Klerksdorp) operates in different specialist groups – ensures continuity and application of special skills, knowledge and experience to cases – • Serious offences (serious fraud, theft, statutory offences) • General fraud • Banking related and electronic crimes • Intellectual property rights crime (counterfeiting/ piracy)

21. CCU: COOPERATION WITH OTHER ROLE PLAYERS • CCU works together closely with various role players – • Specialised Commercial Crime Courts and prosecutors in all major areas (Pretoria, Johannesburg, Durban, Cape Town etc) – very successful project and ensures more successful prosecutions • South African Bank Risk Information Centre (SABRIC) – banking related matters • Financial Intelligence Centre • Business Against Crime (BAC)

22. CCU: COOPERATION WITH OTHER ROLE PLAYERS (2) • South African Reserve Bank • Financial Services Board • Other Government departments, including the South African Revenue Service (SARS) • Law Societies • Road Accident Fund • Asset Forfeiture Unit • Forensic auditors and accountants • Master of the High Court and Registrar of the High Court

23. INTERNATIONAL COOPERATION • Formal procedure in place i.t.o. law – formal requests received and submitted to Department of Justice • Direct police to police enquiries and cooperation • Interpol 24/7 system channel – cooperation between member countries • FIC also facilitates and assists with financial related intelligence corresponding with their counterparts abroad

24. SPECIAL FOCUS AREAS OF THE CCU • Anti-Corruption Task Team – serious corruption and fraud within government departments and institutions at all levels • Operation Clean Audit – corruption at local government level (municipalities) • Theft/ Fraud by Attorneys from trust funds • Fraud perpetrated against the Road Accident Fund (RAF) • Fraud against pension funds (focus on Government Employees Pension Fund and Special Pension Fund) and medical aid funds • Fraud with social grants

25. SPECIAL FOCUS AREAS OF THE CCU (2) • Banking related crime – threats such as counterfeiting of credit and debit cards • Internet/ cyber/ banking related crime such as phishing • Fraud/Theft relating to Guardian Funds, Insolvent Estates and Deceased Estates (funds administered by the Master of the High Court)

26. SUPPORTING LEGISLATION • Suspicious transaction reports (Financial Intelligence Centre Act, 2001) – all suspicious/unusual transactions, transactions above a certain threshold and cash above a certain threshold transported across the border to be reported to FIC • Knowledge/ suspicions of corruption, theft/ fraud above R100 000 to be reported by certain persons to the SAPS (Prevention and Combating of Corrupt Activities Act, 2004) • Prevention of Organised Crime Act, 1998 (Act no 121 of 1998) – section 2 (racketeering), section 4 (money laundering), section 6 (possession/ receiving the proceeds of illegal activities) • Chapters 5 & 6 – Restraining and forfeiture of assets of criminals

27. TRAINING AND SKILLS DEVELOPMENT • CCU facilitates, in cooperation with the Division Training, specific commercial crime training for investigators on 3 levels • Training also requires practical investigation of cases and a practical assessment before a candidate can be declared competent as an investigator on a certain level • Investigators also regularly receive training from external role players, locally and abroad • Training and skills development is an important aspect of developing skills and expertise with investigators

28. OPERATION CLEAN AUDIT • The SAPS is participating in a joint operation with the Department of Local Government and Traditional Affairs in an operation titled Operation Clean Audit that deals with corruption within the local governments and municipalities. • Since October 2009, dedicated capacity in provinces to investigate and combat corruption and related offences such as fraud, theft & statutory fraud within local government

29. OPERATION CLEAN AUDIT (2) • 2011/12 period: A total of 76 cases received for investigation 26 public officials & 26 members of the public arrested and charged for various charges of fraud, corruption and theft • Since the start of project, a total of 163 persons (82 public officials and 81 members of the public) have been convicted on charges of fraud, theft, corruption and other statutory offences (Public Finance Management Act, 1999/ Local Government: Municipal Finance Management Act, 2003)

30. Medical scheme fraud • According to surveys been done, it is estimated that fraud against medical aid schemes amounts to R22 billion per year; • This is an enormous amount. • The question is, who suffers the loss? Government as a big contributor of public funds and the members; • Just imagine what the government can do with such an amount as part of social upliftment and/or development

31. REPORTED CASES • The Hawks, Free State, recently received a report that a doctor Cunning Jackal with members defrauded Polmed and GEMS; • New investigation • Amount involved R5million • Excessive amount of claims, • Members visits dr Jackal’s rooms frequently, even on Saturdays and Sundays; • Preliminary investigations indicate possible kickbacks to members • WC, glasses for school children. Fraudulent claims

32. CHALLENGES • Early identification of threats and syndicates • Early reporting to SAPS/DPCI • Under reporting

33. CONCLUSION • THANK YOU