In May 1999 the Asset Forfeiture Unit (AFU) was established within the National Prosecuting Authority (NPA). Its responsibility was to ensure that the powers in the Prevention of Organised Crime Act (POCA) 121 of 1988 were used effectively. It was not always easy, but ten years later the AFU is able to celebrate its achievements.
Article and photo by Kotie Geldenhuys
Selected information and cartoons taken from the NPA Asset Forfeiture Unit’s booklet
On 7 July 2009, during a press conference held in Benoni, Mr Willie Hofmeyr, Head: AFU, told the media that 2008 was the AFU’s most successful year yet. It had obtained 275 orders to freeze assets and 277 orders to forfeit assets. The value of frozen assets was R320 million and of forfeited assets R272 million; while R66 million were deposited by the AFU in the Criminal Assets Recovery Account (CARA).
Ten years ago ... and now
In the early days, the AFU only had three members who were accommodated in the Maize Board Building in Pretoria. But more staff was appointed and currently 110 people are responsible for asset forfeiture. Their achievements during the past ten years show that, together with their partners such as the SAPS, Financial Intelligence Centre, SA Reserve Bank and SARS, they are making a
significant impact on crime. More than 40 SAPS detectives work full-time with the AFU to ensure proper investigation of cases, trace suspects and recover the proceeds of crime.
Achievements over 10 years
Over the past 10 years the AFU has:
• Frozen assets to the value of more than R3.35 billion in more than 1700 cases.
• Forfeited assets to the value of more than R950 million in more than 1400 cases.
• Obtained close to 1200 other court orders.
• Deposited more than R230 million into CARA.
• Repaid more than R400 million to victims of crime.
• Maintained a success rate of more than 85% in all cases.
• Clarified the law by obtaining 243 judgments, including six judgments in the Constitutional Court and 23 in the Supreme Court of Appeal.
Mr Willie Hofmeyr is looking forward to taking “his first billion” off criminals. During the press conference he said: “We hope to reach the billion rand mark this year.”
These achievements remind one of the Boekhoud case where the AFU seized more than R100 million, including a platinum refinery in the UK and the Delport case where the AFU obtained a freezing and seizure order of R80 million.
Crime is all about money
Although asset forfeiture is globally a relatively new concept, it creates exciting opportunities to deal more effectively with crime. One of the major weapons to use against organised crime is to go after the money. As it is difficult to put crime bosses in jail because they tend to be removed from the crime, many experts are of the opinion that there needs to be more focus on the financial disruption of
syndicates, rather than on conviction.
Crime has become a business and is committed for an economic motive. People focus on crimes with the most profit and the least risk. For example, if criminals are usually focusing on drugs, but there are more money and less risk in abalone poaching, they will move to that crime. They are more interested in the money than in the type of crime. The “fewer risks” refer to more lenient prison sentences and fines for abalone poaching.
The AFU aims to make criminals’ business careers less profitable by increasing the risk. Asset forfeiture has an important deterrent effect as it hits the criminal where it hurts most - the pocket. A prison sentence is an occupational hazard, but when a criminal is released his/her assets are usually still intact. A prison sentence doesn’t make much of an impact on crime bosses, but taking away their luxury vehicles, comfortable house and their expensive lifestyle will have an impact on the criminal and his/her family. Thus, the removal of assets and a prison sentence mean that on release there will be nothing left of the “kingdom” s/he had built from the proceeds of crime.
Asset forfeiture also ensures that the businesses and other assets that the convicted crime boss has left behind, cannot be used by new crime leaders.
Methods of seizing assets
POCA provides for two methods when seizing criminals’ assets - criminal forfeiture and civil forfeiture. Chapter 5 of POCA allows for assets to be confiscated through a civil action after the accused has been convicted. Chapter 6 of POCA allows for the confiscation of the proceeds of crime through a civil action against the assets without the need to obtain a criminal conviction against the owner. Here the State has to prove that the assets are connected to crime.
Specialists or a specialist unit to do asset forfeiture
As asset forfeiture became more intense, criminals are finding better ways to hide money, therefore Mr Willie Hofmeyr is adamant that forfeiture should be dealt with by a specialist Asset Forfeiture Unit and not simply be part of the general prosecution function. A specialised group of people who are specifically skilled to follow the money trail is important when it comes to asset forfeiture. It has been found internationally that asset forfeiture is seldom used as police and prosecutors tend to focus on conviction rates because these are the basis of their performance measurement systems.
International recognition
The AFU has received international recognition for its work, and is invited regularly to speak at international conferences and training sessions. The AFU members have also assisted other countries in setting up asset forfeiture capacity.
A worrying trend
Mr Hofmeyr said that the most worrying trend is that organised crime is moving to white-collar crime with traditional organised crime groups moving towards financial crimes. “Fraud and corruption are very profitable and the risks are low,” said Mr Hofmeyr. The chances of detection in fraud and corruption are very low and the conviction rate is not very high.
With the current international recession, the AFU is bracing for an increase in white-collar crime - such as the Ponzi scheme. According to Mr Hofmeyr the recession will expose companies where there has been undetected fraud in the next few months.
It is believed that the drug trade is one of the country’s most lucrative criminal businesses, but Mr Hofmeyr said due to the fact that the drug trade has been one of their big focus areas they are going to make an even bigger concerted effort to fight it.
Challenges
With the proceeds of economic crime estimated at R80 - R100 billion a year, the AFU’s successes are but a drop in the ocean. Many challenges still remain and Mr Hofmeyr said that they are still a long way from being able to say that they have truly taken the profit out of crime. “The reality today in South Africa, is that crime still pays, we can't sit here and say crime doesn't pay, we have to deal with it effectively.”
Partnerships ensure successes
The Acting National Director of Public Prosecutions, Adv Mokotedi Mpshe, says that the successes of the AFU can be attributed to their cooperation with other stakeholders as well as their international cooperation. He said that the DSO (Scorpions) was one of the main feeders of the AFU and that they are still going to work closely with the newly established crime-fighting unit, the Hawks. Partnerships like these will help to bring crime bosses and syndicates to book and also contribute to the forfeiture of their assets. Together the various role-players can ensure that crime does not pay.
Annual training
After the press conference the annual training of the AFU kicked off. Detectives from all over the country involved in asset forfeiture investigation together with prosecutors and investigation officers of the AFU attended the three days of training.
J P Willemse of the AFU explained to SERVAMUS that during the annual training interesting cases and ideas for best practices are shared with the attendees. They are also taught several special skills in investigating asset forfeiture cases, for example to look at the suspect’s lifestyle.
On 8 July 2009 a gala event was held to celebrate the AFU’s achievements over the past ten years. Justice Minister Mr Jeff Radebe also attended the event and praised the AFU’s achievements during the past decade.
SERVAMUS wants to congratulate Mr Willie Hofmeyr and his team on their many achievements over the past ten years. May you be even more successful in the years to come and succeed in your aim to take the profit out of crime.
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