forensics, white collar crime

Economic crime globally is rife and frauds are becoming more complex and involve larger sums of money than ever before. White collar crime, in both the private and public sectors is costing South Africa billions per year. The exponential increase in incidents where computers and other advanced technologies are utilised to commit fraud also poses a substantial problem to entities in the public and private sectors.

The investigation of commercial crimes such as fraud, corruption and money laundering requires specialised multi-disciplinary skills and a thorough understanding of the criminal justice system. There is an increasing body of law focused on dealing with the problem of economic crime and more recently South Africa has seen the establishment of a Commercial Crimes Unit and Court, which focuses on the investigation and prosecution of such crimes, with branches throughout the country.

Our approach is based on multi-disciplinary teams of specialists, headed by qualified and experienced lawyers. Experts such as forensic auditing specialists, computer forensic specialists, procurement specialists and others, exercise their skills under the direction of our legal experts.

Skilled forensic investigation is a product of both a detailed knowledge of the industry and the legislative framework in which the investigation must take place, as well as focused efficient information gathering techniques. Our Forensic and White Collar Crime team has a wealth of specialized knowledge of areas such as public sector law, financial services, banking and employment law that form the foundation of specialised focused investigations.

end-to-end solutions

We provide a seamless service, conducting investigations aimed at immediate remedies such as disciplinary hearings, civil recovery and/or criminal investigations that can be finalised by Bowman Gilfillan specialists immediately after presentation of our report.

We provide our clients with legal opinions, setting out their legal rights and the remedies available to them after falling victim to economic crime.

All information provided to us and all work undertaken by us is treated as strictly confidential and clients may also enjoy the benefits of legal professional privilege.

Our forensic team is supported by other specialist practice areas within the firm such as litigation and dispute resolution, intellectual property and employment law.

focus areas

Our main focus areas are:

• fraud risk assessments
• internal control reviews
• fraud related policies
• forensic investigations
• disciplinary proceedings
• civil recoveries
• initiation of criminal proceeding
• forensic due diligence
• fraud training

our services

The primary responsibility for the prevention and detection of fraud rests with those charged with the governance and management of an entity.

In response to the needs and responsibilities of key players in any organisation, Bowman Gilfillan's Forensic Auditing and White Collar Crime practice area provides the following services:

Fraud training

The single most cost-effective and long-term investment any organisation can make is to empower its people with knowledge and understanding with regard to the fight against economic crime. Comprehensive training packages have been designed to assist clients in educating and empowering their employees to combat economic crime in their organisations. Our training highlights the risks of fraud and corruption and teaches employees to recognise the warning signs of economic crime in its infancy. Employees are taught how to react to economic crime and the internal fraud prevention team are guided in implementing optimum processes in combating and responding to fraud. Training can take the form of lectures, workshops, presentations and seminars. Training material is provided to ensure a detailed understanding of the underlying concepts.

Ethics services

The ethics services provided by us include:

• evaluation of the design, implementation and effectiveness of the organisation's ethics related objectives, programs and activities
• drafting of Codes of Conduct and Ethics
• designing of Ethics strategies and interventions

Fraud prevention and detection

Our team develops comprehensive fraud prevention strategies for clients who take into account existing fraud prevention initiatives already in place in organisations, existing fraud risks faced by the organisation and the mechanisms, procedures and initiatives necessary to manage these fraud risks. The fraud prevention plans set out mechanisms to prevent, detect, investigate and prosecute fraud to the full extent of the law. The fraud prevention plan is based on 6 focus areas:

• commitment by senior management, which includes commitment to zero tolerance, signing of the Fraud Policy Statement and circulating the message to all employees
• the prevention policy, which includes employee sensitisation and participation in fraud prevention, creating a fraud hotline, establishing rewards for whistle blowers and allowing for internal and external publication of that policy
• managing Human Resources
• managing the Fraud Risk, which includes fraud risk assessments and grading of positions, surprise audits and spot checks, fraud prevention training, a fraud response plan to guide the fraud response team on the processes of investigations, collecting and safeguarding of evidence, report writing and the civil recovery of losses, criminal or disciplinary action
• managing procurement risks
• addressing Information Technology (IT) risks

Fraud risk assessment

Fraud risk assessments represent the largest single task in proactive fraud prevention. The fraud risk identification process involves the investigation and making of recommendations in relation to:

• identifying areas of fraud exposure
• the absence of controls relevant to a particular process and related procedures
• insufficient controls relevant to such processes and/or procedures
• non-compliance with existing controls
• adequacy and efficiency of controls
• designing of specific internal controls that may be introduced by an entity to prevent common types of fraud

Computer forensics

Computer forensics includes fraud detection through data mining, securing cyberspace by means of firewalls and mail security, securing financial and other electronic systems and the drafting of appropriate IT policies, procedures and processes. The recovery of data that has been deleted or destroyed has also become of critical importance in many investigations.

Forensic audit and investigation

We provide the following services that involve investigative and auditing work, focused on allegations of serious economic crime and related misconduct, including:

• general fraud investigations
• breach of contract investigations
• due diligence investigations, with forensic focus
• liquidation support and asset tracing
• prosecution of disciplinary matters
• support to criminal investigations

Procurement audits and B-BBEE assessments

Procurement remains the area where most fraud and corruption occurs. Inefficient controls, inadequate contracts and questionable procurement practices, policies and procedures compound the problem and are often serious enough to cause organisations to experience financial difficulties. A comprehensive, participative strategy aimed at minimising losses through procurement is provided to clients in all sectors, which include:

• conducting of reviews to ensure that tender and procurement processes meet the latest legal and corporate governance requirements
• providing opinions on the procurement process in terms of transparency, equity, cost effectiveness, competitiveness and value for money
• determining whether the entity has followed applicable procedures and policies in awarding contracts
• reviewing potential conflicts of interest, in respect of contracts and applications
• performing assessments on the BBBEE status of organisations that have been awarded contracts
• providing recommendations, if required, on improvements or changes to the procurement process
• supplier and trading partner vetting
• review of supplier databases
• risk listing of suppliers

Human resources audits

Many organisations underestimate the importance of conducting proper background checks on prospective new employees or persons who are being promoted to positions of trust. Our services in this area include:

• employee vetting
• qualifications audits
• service contracts tailored to fraud prevention
• registers of interests and gifts
• restraints of trade and confidentiality agreements

Fraud reporting

Forensic investigation reports are structured to contain not only the factual circumstances relating to matters investigated, but also include recommendations relating to the risk and control environment of the organisation.

The legal aspects relating to any matter investigated are also dealt with in the form of legal opinions.

Reports are prepared in a format where evidence is presented in a professional and concise manner for purposes of internal disciplinary hearings, criminal and civil proceedings. Reports are supported by evidentiary material and do not require further legal input.

We also advise and assist clients with their own reporting obligations in terms of relevant legislation, such as the Prevention and Combating of Corrupt Activities Act, 2004, the Financial Intelligence Centre Act, 2001, the new Auditing Profession Act and the Prevention of Organised Crime Act.

Civil loss recovery, criminal action and employment law services

By virtue of the firm’s size and the level of expertise available, Bowman Gilfillan is in a position to offer clients top quality legal assistance in any civil recoveries, disciplinary and/or criminal action which may be required.

Our Litigation department, Employment Law department and Insolvency department work closely with the Forensic and White Collar Crime practice area to assist clients with civil loss recovery, the institution of legal processes aimed at freezing assets, placing assets under curatorship, repatriating funds etc, as well as disciplinary proceedings.

recent forensic assignments

Selected examples of prominent matters in which the firm and/or team members have been involved include:

• an investigation into alleged dishonesty and corruption on the part of the trustees of a prominent medical aid scheme. The report was submitted to the Registrar of Medical Schemes
• performing an inspection into undue payments made to senior management at a medical scheme, on behalf of the Registrar of Medical Schemes
• an investigation into breaches of the Companies Act by a senior executive of a client and assisting in preparing the charges for the public prosecutor
• assisting a client to investigate and prosecute a theft ring involving senior members of management as well as members of the security company supposedly guarding the client's assets
• assisting an overseas client who was the victim of a fraud scheme similar to the notorious Advance Fee Fraud schemes, in terms of which the client was threatened with false criminal proceedings and investigations in South Africa
• assisting a bank which was utilised as a vehicle for a fraud perpetrated by a high-profile client
• investigation into allegations of procurement fraud at various major parastatals. We have also assisted with the disciplinary actions against those involved
• advising a client on the recovery of monies misappropriated by its auditor
• drafting of fraud prevention plans for 5 government departments in the Eastern Cape
• conducting an investigation into large amounts written off from the asset register of a municipality
• conducting various special investigations on behalf of the Auditor-General
• performing a computer audit at an institution for higher learning
• an investigation on behalf of a non-profit multinational into employee benefits in Senegal
• an investigation into allegations of corruption by the CEO of a parastatal
• an investigation into fraud in the oil industry, where there was collusion between drivers and service station owners
• assisting the Scorpions in an investigation into the supply of drugs to alleged drug dealers
• an investigation into procurement fraud by the head of IT at a cellular network service provider
• assisted a large multinational corporation in initiating proceedings for the   recovery of damages suffered on account of large scale procurement fraud
• worked closely with the SAPS and a large parastatal in order to investigate fraud and corruption at the parastatal and assist with the initiation of criminal proceedings against those implicated
• performed a fraud risk assessment across three subsidiaries of a large public entity and drafted the economic crime strategy as well as related documents for this client
• acted as initiators in several disciplinary hearings of senior executives of state institutions, which included the drafting of the allegations against the employees and assisting the forensic investigators with the finalisation of their report