PROJECT FUNDA: A POCA PERSPECTIVE - DPP-SOUTH GAUTENG ADVOCATE MICHELLE BAYAT SENIOR STATE ADVOCATE ORGANISED CRIME UNIT

PROJECT FUNDA: A
POCA PERSPECTIVE
      ADVOCATE MICHELLE BAYAT
       SENIOR STATE ADVOCATE
        ORGANISED CRIME UNIT
         DPP-SOUTH GAUTENG
  NATIONAL PROSECUTING AUTHORITY

PREVENTION OF ORGANISED
  CRIME ACT, ACT 121 OF 1998
PURPOSE
   to combat organised crime, money
    laundering and criminal gang activity
    prohibit racketeering activity
    to provide for the recovery of the
    proceeds of unlawful activity
    to provide for the civil forfeiture of
    criminal property used in the
    commission of crime

RACKETEERING
   Section 2(1)(d) – any person who acquires or maintains,
    directly or indirectly, any interest in or control of any
    enterprise through a pattern of racketeering activity;
   Section 2(1)(e) – whilst managing or employed by or
    associated with any enterprise, conducts or participates
    in the conduct, directly or indirectly of such enterprise’s
    affairs through a pattern of racketeering activity;
   Section 2(1)(f) – manages the operation or activities of
    an enterprise and who knows or ought reasonably to
    have known that any person, whilst employed by or
    associated with that enterprise, conducts or participates
    in the conduct, directly or indirectly of such enterprise’s
    affairs through a pattern of racketeering activity, shall be
    guilty of an offence.

IMPORTANT ELEMENTS OF
         RACKETEERING
   Enterprise

   Pattern of Racketeering Activity

   Authority from NDPP of the NPA

   Punishment for racketeering

ENTERPRISE

   DEFINITION IN SECTION 1 OF POCA
    “includes any individual, partnership,
      corporation, association or other juristic
      person or legal entity and any union or group
      of individuals associated in fact, although not
      a juristic person or legal entity.”

CHARACTERISTICS OF
           ENTERPRISE
   Differentiation of roles and of tasks
   A system of command/authority
   A common or shared goal or purpose
   Continuity of personnel
   Formal structure
   Separate from the pattern of activity in
    which it engages

PATTERN OF RACKETEERING
            ACTIVITY
   DEFINITION
    “the planned, ongoing, continuous or repeated
      participation or involvement in any offence
      referred to in Schedule 1 and includes at least
      two offences referred to in Schedule 1, of
      which one of the offences occurred after the
      commencement of this Act and the last
      offence occurred within 10 years (excluding
      any period of imprisonment) after the
      commission of such prior offence referred to
      in Schedule 1”

PATTERN OF RACKETEERING
            ACTIVITY
   2 offences or more
   Predicate offences comprise the pattern of
    racketeering activity
   Continuous and ongoing
   Bank records, phone records can be
    presented to prove a pattern of
    racketeering activity.
   Must look at the modus operandi

Authority from NDPP
   Must obtain the authority of the NDPP
    before instituting a prosecution of
    racketeering.
   This is done by way of a power point
    presentation to the NDPP
   The indictment and a prosecutor’s
    memorandum must be forwarded to NDPP
   Investigating Officer required to be
    present

PUNISHMENT
   If found guilty of racketeering, a person
    shall be liable to a fine not exceeding
    R1000 million or to imprisonment for a
    period up to imprisonment for life. –
    Section 3.

   As is evident from the Act, the penalties
    are extremely high.

THE CRIMINAL PROCEDURE
          ACT 51 OF 1977
   The Act governs the criminal court
    process.
   It is essential to have a proper
    understanding of this Act.
   Important sections include the following:
       Section   204
       Section   252A
       Section   60
       Section   23 -

STATE-vs-RAMOBA
   Complaints received on hotline from
    certain Medscheme members –
    irregularities pertaining to Mongalo
    Pharmacy.
   Investigation began.
   Approached Organised Crime Unit of SAPS
    and registered an Organised Crime Threat
    Analysis.
   These crimes had an impact on the
    economical medical aid industry.

FACTS OF RAMOBA
   He is a pharmacist and he owned four
    pharmacies:

        Mongalo Pharmacy
        Thato Pharmacy

        Bokomoso Pharmacy

        Phendulo Pharmacy

FACTS
   He would supply inexpensive medication, to the
    member but he would claim for expensive
    medication from the medical aid.
   He would give cash on medical aid
   He would give groceries on medical aid
   He would give toiletries on medical aid.
   He would sometimes submit a claim even if the
    member had not visited the pharmacy.

FACTS
   Ramoba worked closely with a few
    doctors.
   These doctors would complete a
    prescription for the member without any
    consultation. The doctor would then lodge
    a claim with the medical aid for a
    consultation fee.
   One of the doctors was made a 204
    witness.

CHARGES
   Only predicate offences of fraud – a
    misrepresentation made to Medscheme
    causing them prejudice, actual and
    potential.
   277 counts
   Alternative charge of theft.
   Statutory offence: Section 66(1)(b) of the
    Medical Schemes Act, 131 of 1998 –
    accused makes a false claim whilst
    knowing the claim is false.

INVESTIGATION CONDUCTED
   Retrieving and analysing of data claim
    forms
   Interviews with the relevant medical aid
    members
   Taking of statements from the members
   Visiting the scene of the crimes, the actual
    pharmacies.
   Taking of process statements from the
    following witnesses:

INVESTIGATION
   The South African Pharmacy Council – this was
    necessary to see if the pharmacy was appearing in the
    Register of Pharmacies as per the Pharmacy Act 53 of
    1974. It also provides the physical address of the
    pharmacy.
   Medscheme officials – the Complainants in the case.
   Expert witness: Dr Pratt – he studied the trends of the
    accused pharmacies and compared them with national
    trends.
   Pratt also provided information about the types of the
    various medications and its purpose and more
    importantly when would a doctor or pharmacist prescribe
    same.

INVESTIGATION
   Expert witness: – Deon Oberholzer - he is
    an auditor/data analyst. He analysed bank
    statements, payment remittances and
    claim forms and compiled a report which
    highlighted the audit trail in respect of
    each count of fraud.
   He also prepared bundles of the above-
    mentioned documents to be handed in as
    exhibits.

INVESTIGATION
   Computer expert:– Mr Hollman - the claim
    system ie, the lodging of the claims by the
    accused to Medscheme appeared to be
    rather confusing.

   It was thus necessary to call a witness
    who would be able to explain in layman
    terms the working of the system.

STATEMENTS FROM
              MEMEBERS
   During interview of members, some of them
    admitted to receiving cash and/or groceries
    and/or toiletries on their medical aid.
   The investigators then obtained a statement in
    terms of Section 204 of Act 51 of 1977 (The
    Criminal Procedure Act)
   This statement must contain a paragraph which
    states that the witness has been warned in
    terms of Section 204 and that if the witness is
    honest, he may be indemnified by the trial court.

STATEMENTS
   Written or typed statements?
   Preference: written statements
   It is more authentic and alleviates any
    suspicion of fabrication.
   Written statements are important as they
    can be tested in a court of law.
   Member must be given an opportunity to
    read the statement before he signs.

SECTION 252A OF ACT 51 OF
              1977
   Private investigators obtained authority to
    use their own probes/agents.
   The operation was done jointly with the
    SAPS.
   Good evidence provided it is done in
    compliance with the law.
   Important that everything that transpires
    during the operation must be
    documented.

OTHER INVESTIGATIONS
   Asset Forfeiture Unit (AFU)
   A financial investigation was
    simultaneously undertaken by the AFU.
   If Accused has assets and money, this
    may be attached before the criminal case
    even goes to court.
   In Ramoba’s case, AFU still conducting
    their investigation.

ARREST OF THE ACCUSED
   Search and seizure
   Our private investigators were present although the
    actual search was headed by the SAPS.
   Private persons can be outside the premises of the
    search and seizure. Names must not appear on the
    application for the search warrant. Only names of the
    police officials must be indicated on the warrant.
   Computers, diaries, membership cards, cash books,
    prescription pads, invoices were seized during the
    search.
   Must make mirror images of the contents of the
    computers.

BAIL
   We did not oppose bail for Ramoba
   This was a mistake as it led to the accused
    intimidating our witnesses in particular our
    204 witness as well as our probe/agent.
   We did charge him for intimidation and
    later for incitement to murder.
   Bail must be opposed in cases of this
    nature.

TRIAL
   The trial began in May 2009.
   It’s still pending thus far.
   State has led the evidence of 47 witnesses
    thus far.
   Cross examination focused on the
    members statements and the person who
    commissioned the statement.

TRIAL
   Cross-examination also focused on the
    member’s recollection of the different
    medications that they were supplied with.
   The Mims book, an index of medical
    specialities must be discussed with
    members during the interview.
   This will assist the members in recollecting
    whether they suffered from the relevant
    condition or not.

STATE vs MANAKA & OTHERS
   Medical aid fraud case also involving a
    pharmacist.
   No arrest as yet.
   Considering a racketeering prosecution.
   The goal is to prosecute the accused
    before a Judge in the High Court.
   Targeting the pharmacist, his brother and
    three doctors involved.

MANAKA & OTHERS
   Enterprise would be the accused
    associated in fact with each other.
   The pattern of racketeering activity- fraud,
    alternatively theft.
   All accused will be charged together
   Hoping to develop the law in this area.

CONCLUSION
   When investigating these cases, always
    keep in mind that one day, this matter
    may be going to a court of law.
   Make sure that the general principles of
    criminal law are adhered to when taking
    statements or conducting an operation in
    terms of Section 252A.
   Only admissible evidence will be presented
    to court.