Seizing Criminal Assets to Fight Crime

1. Seizing Criminal Assets to Fight Crime National Prosecuting Authority Report to Parliament 5 June 2002 Asset Forfeiture Unit Willie Hofmeyr - Head Ouma Rabaji – Head of Operations

2. Mission statement for 2002 • We aim to take the profit out of crime by providing an effective asset forfeiture service to government agencies and the public of South Africa. We will do this by: • Ensuring an 85% success rate • Seizing assets in 150 cases involving R250m • Applying for forfeiture in 100 cases involving R150m • Obtaining forfeiture orders in 75 cases involving R75m

3. AFU Strategic objectives 1: Testing the law • to develop the law by taking test cases to court and creating the legal precedents that are necessary to allow the effective use of the law 2: Rolling out volume • to build the capacity to ensure that asset forfeiture is used widely and makes a real impact in the fight against crime

4. Objective 2: Cases doneto date NoValue Success assets Rate Seizures 150 R373m 88% Forfeitures granted 55 R 22m 88% Cases complete 21 R 5m Deposits in fund 12 R 0.7m

5. Update since report • Forfeitures granted have tripled in value from R22m to R65m • Cases completed are up fivefold from R5m to R26m • Another R12m has been deposited into special fund, bringing deposits to R13m (Criminal Assets Recovery Account)

6. Large deposits into CARA • This will be year of delivery into CARA • The first half of this financial year should deposit at least R40m in CARA • R12m from Hout Bay fishing case already in • Plus orders already granted • About R6m from alleged Durban drug dealer Ronny Johnny Smith • About R15m from Durban illegal casino kingpin Gayadin • R6m to R8m from sale of another Hout Bay Fishing boat

7. Funds to fight crime • Aim of the AFU was to bring in more money that its costs by year 4 – expected some delay as big cases take time to finalise • This target will now be achieved early • In fact, the expected deposits of over R40m will cover all AFU costs over last 3 years • These funds will be available to fight crime • However, some amendments may be required to spend it effectively

8. Increasing roll-out • To achieve the objective of making asset forfeiture widely used • the AFU would like to double the number of cases (& value) every year • During the past year again achieved exceptional growth • Doubled the number of new cases and other applications • Nearly achieved this for value of assets • Aim to do the same again this year

9. Types of cases • Economic crime is about 34% of cases and 50% of assets • Corruption another 16% and 7% of assets • Tends to be so because large amounts are involved • Important for stronger action against economic crime – more organised crime involvement – eg Nigerian 419 scams

10. Types of cases (cont) • Drug cases 31% of cases, 4% of assets • Would like to do more big dealers like Smith • Violent 7% of cases, 2% of assets • Natural resources 6% cases, 18% assets • Become major area with abelone smuggling, overharvesting

11. Priority cases • Organised crime in all forms • Drugs - dealers, cash and houses • Serious violent crime with economic motive • Serious economic crime – esp where public • Corruption • Precious metals • Cleaning up areas: community irritants • Property used to commit crime • Natural resources – added later

12. Building partnerships • A key focus for the rapid establishment of a forfeiture capacity has been to build partner-ships, both locally and internationally • Great deal of help from other states that have use forfeiture effectively • USA, UK have given extensive advice and assistance • Also help from Canada and UN – esp useful has been a UK barrister with extensive litigation experience UN employed for a two year period to assist SA with advice

13. Local partnerships • Local partnerships are even more important • AFU saw itself as a support organisation to the SAPS, DSO, the NPS and other law enforcement bodies - depend on them to bring work to us • Proud of the good relations that have been built

14. Partnerships • The most effective model has been where full time task teams were established to work with AFU, but difficult given the resource constraints • Also focus on partnership with the private sector – to assist with growing forfeiture quickly, but also to help build business confidence in SA

15. Growth of AFU • The AFU has been able to grow quickly – in the coming year it will grow to a staff of 76 including 48 lawyers • In large part our success is due to the foresight and commitment from the NDPP • Decentralising operations have been vital and have assisted in growing the organisation – now offices in Cape Town, Durban, Johannesburg, East London • This year in Port Elizabeth, Bloemfontein, Kimberley, Pietermaritzburg

16. Promoting representivity • The AFU is proud of what it has achieved in a field where skills are very specialised • But more remains to be done to promote representivity of African people All Legal Man staff Designated 83 84 73 Black 73 68 64 African 50 39 46 Women 50 48 36

17. Objective 2: Testing the law • Still focussed on test cases – imply very high quality of work, conservative case selection • But rolling out in areas where law is more clear, plus more adventurous approach • Decided on lower success rate than before • It is a vital part of increased roll-out

18. Important cases • Many issues have been clarified in about 32 judgements thus far • But few of about 30 issues are finally settled • Rebuzzi case in the SCA settled the issue that the AFU can act even when all the recovered assets will go to compensate the victim

19. Cases • The most important judgement was in the Phillips matter where Heher J delivered a 120 page judgement dealing with a large number of issues • Also confirmed Bathgate judgement that chapter 5 is constitutional • One of the most important issues being litigated is whether chapter 5 is applicable when the benefit has been lost - Kyriacou

20. Constitutional issues • Mohammed case was the first to be heard in Constitutional Court– expect judgement probably in July • Cloete J ruled that POCA compels ex parte seizure proceedings, and that this is unconstitutional • The AFU argued that it is not • Alternatively that POCA does not in fact exclude the discretion of the court to allow for a hearing when it feels ex parte is not justified

21. The benefits of asset forfeiture

22. Taking profit out of crime • Much of crime today is committed for an economic motive • Unless one can increase the risk and decrease the profits, it will be impossible to deal effectively with crime

23. Deterrence • It has an important deterrent effect by hitting the crime bosses where it hurts most ‑ in the pocket • Many criminals see gaol as an occupational hazard – the expect their families to be comfortable while they are inside, and that they will be well‑off when they are released • Putting their families on the street and removing their favourite playthings and their “pensions” causes them real pain

24. Removing the asset base • Even where it is possible to convict syndicate heads, civil or criminal forfeiture has proved valuable • It ensures that the businesses, properties, cars, bank accounts and other assets used by the organisation do not remain behind for the use of a new leadership

25. Hitting syndicates in the pocket • It is very difficult to convict syndicate heads as they are seldom directly involved in crime • The small guys who are convicted seldom own any of the assets • Civil forfeiture enables the state to get at the assets of the syndicate and at least hurt them financially

26. Easier burden of proof • Civil forfeiture only requires proof on the balance of probabilities • Thus it can be used even when the evidence is strong enough to prove anyone guilty beyond a reasonable doubt

27. Getting at the real owners • Forfeiture gets behind the increasingly sophisticated efforts of syndicates to hide the real ownership of assets, such as front companies, trusts or nominee owners • Criminal forfeiture ‑ retrieve gifts • Civil forfeiture by going directly for property

28. Closing down criminal infrastructure • Civil forfeiture has been used successfully to close down the infrastructure used for criminal activities, such as drug houses, cars, bars and clubs

29. Funds for law enforcement • Additional benefit that seized assets that are not returned to victims, must be used for law enforcement • Should not become main purpose • But it is an important incentive to persuade law enforcement agencies to devote their scarce resources to doing the additional work required for forfeiture

30. Conclusion • Asset forfeiture is an important part of the war against crime ‑ it hits the crime bosses where it hurts most ‑ in the pocket • It is a vital part of increasing the deterrence, esp in areas such as economic crime where it is low • But most importantly, forfeiture is a vital weapon to take the profit out of crime • If we are to deal effectively with crime, it must become true “that crime does not pay”