Directorate of Special Operations “SCORPIONS” ADV LF McCARTHY

1. PRESENTATION TO PARLIAMENT (18 JUNE 2004) Directorate of Special Operations“SCORPIONS”ADV LF McCARTHY

2. A Room with a View The opportunity for a sustained focus on undisclosed high level organized crime; The opportunity to employ and retain the services of highly skilled and suitably qualified investigators by remunerating them appropriately; The need to radically change the State’s traditional response of reacting to crime; The urgency to return legitimacy and credibility to law enforcement, especially in the area of insidious organized criminal activity.

3. The View from the Bottom Up The Vision of the DSO: “Justice in our society so that people can live in freedom and security: Loved by the people Feared by the criminals Respected by peers” The Mission of the DSO: “We are a multidisciplinary agency that investigates and prosecutes organized crime. We focus on crimes of national impact that requires the integration of intelligence, investigation and prosecution, supported by modern technology.”

4. The Structure of the DSO NDPP NDPP HEAD OF HEAD OF DSO HEAD OF HEAD OF HEAD OF STRATEGIC & STRATEGIC & OPERATIONS INVESTIGATIVE INVESTIGATIVE SUPPORT SUPPORT CRIME ANALYSIS CRIME ANALYSIS FC OC PC POCA FC OC PC POCA OPERATIONAL SUPPORT OPERATIONAL SUPPORT REGIONAL PROJECT TEAMS REGIONAL PROJECT TEAMS GP GP TRAINING & DEVELOPMENT TRAINING & DEVELOPMENT REGIONAL PROJECT TEAMS REGIONAL PROJECT TEAMS EC EC FORENSIC SERVICES FORENSIC SERVICES REGIONAL PROJECT TEAMS REGIONAL PROJECT TEAMS WC WC CICU REGIONAL PROJECT TEAMS REGIONAL PROJECT TEAMS KZN KZN ADMINISTRATION ADMINISTRATION

5. Personnel Males Gauteng Females African White 111 Coloured Indian Cape Town 97 62 49 69 30 8 4 East London 58 73 24 20 44 29 4 KZN 97 CAD 32 34 24 41 9 7 1 Operational Support 38 64 33 46 23 2 26 Training 9 13 19 23 4 4 1 Head of Operations 22 27 11 26 11 0 1 CICU 18 5 4 5 2 2 0 Head Office 22 17 5 12 9 1 0 TOTAL 504 11 7 11 6 0 1 16 6 9 7 4 2 322 182 262 145 57 40

7. Strategy of the DSO • Identify and address those serious, complex and organised crime phenomena, that call for pro-active counter-attack; • Become the primary source of crime information as mandated, with a stable, pre-emptive capacity to analyse serious organised crime trends and determine targets; • Apply a multi-disciplinary approach to investigations to ensure quality impact in our focus areas; • Disrupt organised crime and corruption networks through arrests, searches and convictions, and forfeiture; • Attack the value chain of organised crime, through modern technology, method sophistication and communication surveillance; • Be the foremost proponent of applying racketeering and money-laundering legislation; and • Proliferate the perception of victory over crime, essential to enhance public confidence.

8. DSO Case Intake Criteria Complexity, prevalence, seriousness and premeditation; Financial worth, syndicate character / profile and public interest; and Racketeering, money laundering and asset forfeiture.

9. The DSO Dashboard 1. THREAT ANALYSIS/ TARGET MATCH 2. PRO-ACTIVITY & INTELLIGENCE PRODUCTS 3. INVESTIGATIONS PENDING / FINALISED 4. PROSECUTIONS PENDING / FINALISED 5. CONVICTION RATES 6. REDUCTION IN TURN-AROUND TIME 9. OPERATIVE ACTION 7. MONEY- LAUNDERING / RACKETEERING 8. ASSET VALUE UNDER RESTRAINT 10. CONTRABAND YIELD

10. Number of investigations finalised in focus areas. 190 220 93% (205) Number of prosecutions finalised. 180 210 (90%) 189 OUTPUT / INDICATOR ACHIEVED 2002 TARGET 2003 ACHIEVED 2003 Match between Threat Analysis and Targets in focus areas. Not measured 15% 21.4% (24 targets) Pro-activity scope and intelligence products. Not measured 10% of investigations / 20 products 19.5% (new matters) (37) A Dashboard Drilldown (1)

11. OUTPUT / INDICATOR Turn-around time for select investigations. 24 Months on average ACHIEVED 2002 Reduced by 10% 21,6 months TARGET 2003 ACHIEVED 2003 21,3months (89%) Conviction rate. 86% 75% 94% Asset value under restraint. Measured as potential in 2002 150m 88% (R132.49m) Money-laundering and racketeering cases. 4 convictions Benchmarking aimed at reaching 10. 40% (4) Operative Action. 545 600 109% (656) Contraband Yield. R500m R550m 230% (R1.151bn) A Dashboard Drilldown (2)

12. REGION GP EC WC KZN PMO SNPU CI CU Total Number of investigations in focus areas 65 17 29 21 10 55  9 206 Number of investigations finalized 52 17 59 32 15 28  2 205 Number of prosecutions finalized 50 27 56 29 17 10  0 189 Number of high-impact cases investigated and prosecuted (in strategic focus areas) 20 7 20  10 9 2  0 68 DSO Productivity & Service Delivery Trends (1)

13. REGION A significant reduction in the turn-around time of investigations and prosecutions GP 10% EC 12% WC 11% KZN  10% PMO 15% SNPU 10% CI CU 10%  Total  11.2% Achieving a conviction rate that enhances the perception of victory over crime 95.50% 100% 83% 100% 83% 100%  0  94% Assets under legal restraint / confiscation R25m R529 000 R49. 748m R16. 112m R41m R20 000  0 R 132.49m DSO Productivity & Service Delivery Trends (2)

14. Number of racketeering convictions under the POCA 4 0 0 0 0 0 0  4  GP SN PU CI CU REGION EC WC KZN PMO Total Number of pro-active investigations 9 2 11  4  5 2  4  37 Amount (value) of contraband yield 10m 0 6m R29m R1.1 bn 0 R6m 1.151 bn Number of representations disposed of 1247 534 240 175 70 30  0  2306 Number of motions attended to 10 0  0  0 0 0 0   10 Operative action projects 58 40  46 34 13 25  4  220 DSO Productivity & Service Delivery Trends (3)

15. REGION Number of persons arrested GP 71 EC 26 WC 16 KZN 55 PMO 107 SNPU 10 CI CU  5 Total 290 Number of premises searched 65 14 31 16 0 20  7 153 Number of interception & monitoring applications 5 0 5 4 5 0  1 20 Number of 252 A entrapment applications 103 4 10 10 58 6  2 193 DSO Productivity & Service Delivery Trends (4)

16. Operational Highlights •  FINANCIAL CRIME • Saambou [Major Corporate collapse: financial services]. • Leisurenet [Fraud on Shareholders & Insider Trading]. • Soekor [State v Park-Ross and 3 Others; Boardroom Corruption and nominal share-holding]. • Mohammed [Trust Fraud: Attorneys]. • Moosa [First Market Manipulation conviction in South Africa]. • GEMS [Extensive commissions fraud under Micro-lending scheme].

17. Operational Highlights •  FINANCIAL CRIME CONT… • Halgryn [100m estate discount fraud]. • Regal Bank [Financial Statement Fraud: boosting share price]. • Golden Arrow [Multi-million rand Transport Subsidy Fraud]. • Adodamo & • Uguchuckiwu [Corporate Identity hi-jacking and Website-Spoofing].

18. Operational Highlights cont… • ORGANISED CRIME • Guanxi [Chinese syndicates: major smuggling networks]. • Contraband Yield [1bn value; 2bn social costs]. • WAS 419 [West African syndicates: Racketeering & money- • laundering]. • Macadamian • International [Creative & suspicious money transfers]. • S v Jabaar [Hawala: Cross-border Foreign currency]. • S v Zhou [Criminal supermarket: abalone & drugs]. • Ngubo [Political Violence: Life imprisonment: Natal Midlands]. • Nkonqo [Murder, Racketeering in the Eastern Cape between rivals taxi-associations]. • 3 Gang leaders/ 3 Urban terrorists: [Multiple jail terms].

19. Operational Highlights cont… • CORRUPTION • Augusta [1st conviction of multi-national on corruption charges]. • Mills [Multi-million corrupt Services Scheme]. • Houtbay Fishing [Money-Laundering and Fraud: R57m recovered]. • RAF [Corruption and Fraud: Attorneys and Agents]. • Landbank [Multiple convictions of corruption and fraud: • R100m involved]. • S v Shaik [International Corruption & Money- • Laundering]. • S v Yengeni [Fraud on Parliament].

20. Successes (3 Years) More than 150 convictions in urban terror, hi-jacking, taxi- and political violence. Close to 2000 arrests, searches, seizures and other operational breakthroughs. Up to 3 Billion rands worth of contraband and drugs taken off the streets. Disrupted 100 syndicates/ groups involved in smuggling, corruption, violence and money-rackets. Major advances in financial crimes, i.e. Houtbay Fishing, Tanstar, Golden Arrow, Leisurenet, Regal, Halgryn, Soekor. 45 million CARA, 25% plea bargaining.

21. Without Prejudice…

22. ISS Opinion Survey Performance ratings of CJS agents

23. ISS Findings • The overall conception of the DSO was approved of internally and • externally and some agencies were paying the ultimate compliment of • imitation (of the general operational method of team-based prosecution- • focused investigation). • The need for better operational intelligence to support matters taken on • and strategic intelligence to further define the strategic focus of the DSO • was raised by interviewees inside and outside the DSO. • This view also maintains it would be exactly the role of the DSO to carry • out dedicated undercover operations that would begin to unearth further • intelligence, which could also be used as evidence in a court of law. • Interviewees were almost unanimous on the point that the DSO's external • media campaign had succeeded spectacularly in installing public • confidence and trust in the DSO, and reviving the hopes of citizens that • South Africa can begin to succeed in the fight against crime.

24. ISS Findings cont… • DSO members appeared keen to prove themselves and ‘make a • difference’ and were not resistant to performance measurement, or to • identifying faults with themselves or the organisation, with a view to • improving performance. • External stakeholders not involved in work similar to the DSO felt the • DSO had performed extremely well since its inception; however many • noted they had no first-hand knowledge and based this view on news • reports.”

25. Making a difference? Key Challenges for 2004/2005 To strengthen our capacity to access appropriate crime information timeously; To grow in pro-activity and unravel the top crime echelons; To ensure constant, visible operation with quicker action and results; To make technology work to impact positively on law enforcement; To show a much greater presence in courts through the quality/type of convictions and the disruption of organised crime.

26. Recipe for Action • A secure identification of the Fortune 100 criminal syndicates and • priority targets; • A focus on and disruption of 50 amongst the main crime syndicates • that answer the definitions of the Palermo Convention; • A visible and greater presence in the courts, manifest in 250 • prosecutions; 125 high-level, 125 tactical benefit; • 75 High-impact prosecutions that reduce organised crime by a • measurable 25% in specified focus areas; • Of the convictions, 25 should be racketeering-based and 25 • resulting from money-laundering investigations; and • 250m under asset forfeiture hold and compensation orders, with • 50m directed to the Criminal Asset Recovery Fund.

27. Thank You