Category

Criminal Law / Crime

Mar 07
1

Mirror Trading International victims get offered payout

By | Criminal Law / Crime, Insolvency / Liquidation, News

Mirror Trading International’s liquidators have offered to demonstrate good faith to victims of the alleged pyramid scheme by paying a portion of their claims.

In exchange, those who want to take the deal must withdraw their opposition to the liquidators’ application to have the court declare Mirror Trading International (MTI) an unlawful scheme.

According to the court order, which MyBroadband has seen, the deal is conditional on the High Court finding that the business of MTI was conducted illegally.

Victims who have not opposed the application to declare MTI a pyramid scheme can also take up the deal.

The liquidators stated that this deal is available to all “true losers” of MTI — those who did not withdraw more than the rand value they put into the scheme.

This is an important detail, as MTI took deposits in bitcoin. However, the bitcoin value must be converted to rand using Luno’s exchange rate at the time of the deposit and withdrawal for the purposes of the deal.

Johann Steynberg

Johann Steynberg, Mirror Trading International CEO

Mirror Trading International was a network marketing scam that claimed to offer automated bitcoin-based trading services — initially in forex and later in cryptocurrency derivatives.

MTI made headlines in September 2020 after MyBroadband exposed the inner workings of the scheme, thanks to a data leak from a group calling itself Anonymous ZA.

The scheme collapsed at the end of 2020 after CEO and founder Johann Steynberg skipped the country, disappearing in Brazil.

Steynberg was arrested in Brazil a year after he disappeared, on 29 December 2021, after allegedly presenting fake identification to law enforcement officers.

Chainalysis named MTI the biggest cryptocurrency scam of 2020.

Johann Steynberg arrested in Brazil in December 2021

Court documents gave the last estimate of the funds that flowed through MTI as 29,421.03379 bitcoin — over R20 billion at current exchange rates.

However, a source with knowledge of the case told MyBroadband that the latest analysis shows that more than 46,000 bitcoin (R31.3 billion) flowed through the scheme.

With the help of the Financial Sector Conduct Authority, the liquidators managed to reclaim 1,281 bitcoin in early 2021 from Belize-based brokerage FXChoice.

They immediately sold the cryptocurrency and ended up getting a favourable rate, liquidating it for around R1.1 billion.

The same amount of bitcoin would fetch around R870 million at today’s exchange rates.

The deal — 20c in the rand

While the liquidators have yet to accept any victims’ claims at a creditors’ meeting, MyBroadband understands that there have been R355 million in claims previously submitted to the Master of the Court.

MyBroadband had heard from several people in court on Wednesday, when this deal was hatched, that the liquidators will pay the victims an initial dividend of 20c in the rand.

In a statement issued on Thursday, the liquidators said they made the deal with a group of net-losers and specifically a controversial group called GetaQuid, represented by JC Kriel.

GetaQuid says it represents 15,000 investors, according to the liquidators.

“The settlement with the groups of creditors is welcomed by the liquidators and seen as very constructive steps towards finalising one main area of the administration of the estate, namely the processing of claims of true losers, who are entitled to a dividend as soon as possible,” the liquidators stated.

MyBroadband spoke to GetaQuid’s legal representative Ruann Kruger and asked why the deal wasn’t for 100% of the claims.

Kruger explained that the liquidators would first verify claims against the MTI database in their possession.

Verified claims go to a provisional liquidation distribution account, after which they will receive an interim dividend, likely somewhere between 10% and 30% of the claimed amount.

“They don’t want to pay out too much to the first claims, and then there’s nothing left for claims that come in later,” Kruger said.

He said that the liquidators have committed to expediting claims as much as possible and will meet every few months to approve further payments.

MTI victims should be aware that GetaQuid charges a fee for its services and that it is not necessary to go through them to use this deal.

Kruger said it was not unusual for class action groups to ask members to contribute to help cover its expenses.

The liquidators said they would shortly upload a written consent which investors are encouraged to download, sign and submit together with their claim.

MTI pyramid scheme hearing delayed — again

The application to have MTI declared an unlawful scheme was postponed to 29 April 2022.

According to the liquidators, this was the fault of MTI 50% shareholder Clynton Marks.

They stated that Marks had inundated the court by filing voluminous papers during the week — and had done the same on several previous occasions.

It is interesting that the liquidators single out Marks, as they had responded to at least two thick stacks of papers in the past week — an affidavit from Henry Honiball, and a supplementary affidavit from Marks.

Both filings were well over 200 pages. Honiball also filed a supplementary affidavit of 87 pages.

“Mr Clynton Marks still opposes the application of the liquidators to declare MTI an unlawful scheme and alleges that he does so as the protector of creditors of the scheme,” the liquidators stated.

“This is, of course, false: he is one of the biggest winners in the scheme, and his agenda is simply to try and avoid a day of reckoning in terms of paying back and having to testify further.”

The liquidators said their Cape Town legal team worked non-stop to respond to his late and irregular filed papers. Some of this work lasted until the evening before court on Wednesday.

“The liquidators have no doubt that the agenda behind the late filings was simply to place the liquidators and the court in an impossible position to deal with all the papers in the short time available.”

Marks denied the accusations in a statement sent by his wife, Cheri.

“The statements by the liquidators are both untrue and defamatory, and we will not be commenting on this matter in the media,” they said.

Article by: mybroadband.co.za

Mirror Trading International victims get offered payout (mybroadband.co.za)

Mar 07
0

MTI liquidators agree to process net losers ahead of winners

By | Criminal Law / Crime, Insolvency / Liquidation, News

Liquidators for the failed Bitcoin scheme Mirror Trading International (MTI) this week agreed to ring-fence and process the claims of net losers ahead of the net winners, some of whom are waging court battles to hold on to their winnings.

This follows a high court application brought by MTI investor Chris Kriel, representing 15 000 net losers in the scheme under an ‘MTI recovery group’ named Get a Quid, seeking to postpone scheduled inquiries into the scheme and to remove the liquidators on the grounds of irregular conduct.

Of the tens of thousands of claims submitted to the liquidators, only one has been accepted, that of JNX Online which is a company previously controlled by MTI founder Johann Steynberg and subsequently placed in liquidation.

Claims rejected

This created outrage among the many thousands of people who have submitted claims to the liquidators. At the second meeting of creditors in February 2022, the Master said the claims were rejected on the grounds that they were “illegible”.

Read: Creditors voice fury at MTI liquidators after all investor claims rejected

In an affidavit before the Cape High Court, MTI investor Johannes Kriel notes that the liquidator of JNX Online operates from the same office as MTI liquidator, Herman Bester.

“It is thus apparent that, on the face of it, something is amiss,” deposes Kriel.

“In other words, the Applicants (the MTI liquidators) are required to only follow the instructions of the single proved creditor in an estate which is indebted to hundreds of thousands of investors in many millions of rands (if not billions).”

The agreement between net losers and the liquidators outlines the process to be followed for claimants to verify and prove their claims.

Two groups

Ruann Kruger, the attorney representing Johannes Kriel and the net losers, says the claimants are now clearly split into two groups – the winners and losers – so that the payout of valid losers’ claims is not delayed by court cases being opposed by the big winners.

“We can assist the liquidators. We will now have access to the back office data, just as they do, so we can help in determining who were the losers and whether their claims are valid or not.

“We can also help with the winners, who will probably have to pay back into the scheme if they drew out more than they put in,” says Kruger.

“This of course is dependent on whether MTI is declared an unlawful scheme, and that case will be decided on 29 April.”

MTI drew in hundreds of thousands of investors from around the world on the promise of returns as high as 10% a month, but collapsed in December 2020 when Steynberg fled to Brazil and the company put a stop to all requests for withdrawals.

Read: MTI’s Johann Steynberg arrested in Brazil

Johann Steynberg, MTI, Mirror Trading International

MTI founder Johann Steynberg fled the country when the scheme collapsed. Image: Via Youtube

MTI was declared the world’s biggest crypto scam in 2020 by Chainalysis. By some accounts, more than 29 000 bitcoin passed through the system, representing about R20 billion at current bitcoin prices.

The liquidators are attempting to have MTI declared a Ponzi scheme, which would mean any proceeds derived from the scheme are unlawful and must be repaid. That case has now been postponed to April 29.

The liquidators say only 1 300 claims have been received, out of nearly 200 000 MTI members.

MTI solvent?

In a separate case before the Cape High Court, 50% MTI shareholder Clynton Marks argues that MTI cannot be deemed insolvent as it has recovered bitcoin worth roughly R1.3 billion and has claims totalling just R300 million. The old Companies Act and the Insolvency Act only allow for the winding up of a company unable to pay its debts.

Marks is opposing the application to declare MTI an unlawful scheme. In a circular to creditors, liquidator Riaan van Rooyen says Marks is one of the biggest winners in MTI “and his agenda is simply to try and avoid a day of reckoning in terms of paying back and having to testify further”.

“The settlement with the groups of creditors is welcomed by the liquidators and seen as very constructive steps towards finalising one main area of the administration of the estate, namely the processing of claims of true losers, who are entitled to a dividend as soon as possible,” adds van Rooyen.

Read: MTI liquidators chasing down an additional R2bn in ‘possible debtors’

“With the massive representation of Mr Kriel and the [Get a Quid] group, the liquidators are confident that the investors (creditors) will now realize that the liquidators continue to act in their best interest and the liquidators wish to extend their gratitude to the leaders of the groups, and their legal teams, for engaging the liquidators on this very important settlement affecting such a great part of creditors.”

Once the claims of the net losers have been validated and approved, the liquidators have agreed to convene a special meeting of creditors and prepare a first liquidation and distribution account detailing what dividends will be paid.

This agreement is conditional on the Cape High Court finding that the business of MTI was unlawful. All net losers are covered by the agreement, whether or not they are part of Get a Quid.

Article by Money Web.co.za | MTI liquidators agree to process net losers ahead of winners – Moneyweb

Author: Ciaran Ryan – Moneyweb

Jan 26
0

Using the New Cybercrimes Act to Protect Yourself

By | Criminal Law / Crime, General Interest
“…cybercrime has increased by over 300% during the COVID-19 pandemic – making it one of the biggest threats to businesses around the globe.” (Property 24 report)
The Cybercrimes Act, which has been years in the making, is now (with effect from 1 December 2021) at last largely in force. Although some provisions still remain on hold (most notably some of those relating specifically to “revenge porn” and the granting of protection orders), a whole range of unlawful cyber-related activity has now been specifically criminalized. The police have also been given wide powers of investigation, search, access and seizure, and the penalties for contraventions are substantial. The pandemic-forced shift to a “work from home, shop and communicate online” culture has reportedly seen cybercrime rocketing by 300%. As always our best protection from online criminals is prevention, but for anyone unfortunate enough to fall victim to them at least the new Act now provides us all with a layer of legal protection we haven’t had before – but only if we actually use it and report cybercrime.
The new crime categories
The Act’s provisions are detailed and complex, so this is of necessity just a very brief summary. But for most practical purposes what you need to know is that both individuals and organisations now face prosecution for any –
  • Unlawful access to a “computer system” or “computer data storage medium” (i.e. “hacking”).
  • Unlawful interception of or interference with data, computer programs, data storage mediums and systems.
  • Unlawful acquisition, possession, provision or use of passwords, access codes and the like (PINs, access cards and devices included).
  • Cyber fraud, forgery, extortion and theft.
  • “Malicious communications” (which would by definition include messages sent by email or via Social Media channels, WhatsApp and the like) to the general public, individuals or groups that –
    • Incite damage to property or violence to a person or persons,
    • Threaten a person or persons with damage to property or violence,
    • Disclose a “data message of an intimate image of a person” without that person’s consent, and regardless of whether the victim is identifiable in the image itself or only from a description or other related information. Moreover the image can be “real or simulated”.
A particular warning to Social Media users
Posting or sharing anything prohibited by the Act – perhaps particularly any of the types of “malicious communication” referred to above – could land you in some extremely hot water. Think before you post!
What about “revenge porn”?
As noted above, some of the Act’s provisions relating specifically to “revenge porn” are not yet in effect, but there are already prohibitions against it in other legislation, plus the offences mentioned above relating to disclosure of “intimate images” should at least partially assist victims in the interim. Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Dec 06
0

Another mystery investor emerges to rescue Africrypt investors at 65c in the rand

By | Business, Criminal Law / Crime, Information Technology Law / Cyberlaw, Insolvency / Liquidation

Barely a week after a mystery ‘white knight’ offered creditors $4 million (R64 million) to bail out investors in the failed Africrypt scheme, another mystery investor has appeared with a better offer of $5 million (R80 million), equivalent to 65 cents in the rand.

The first offer made in November was also for $5 million, though only $4 million of that would go to creditors, with the remaining $1 million (R16.13 million) going to the running of the company.

Read:

This latest offer of $5 million is a simpler offer, with a timeline of seven days for acceptance, after which the ‘white knight’ will purchase and take cession of the claims.

Africrypt collapsed in April after its accounts were supposedly hacked and emptied of all funds. But it turns out this was not the first hack to have plagued the founders of Africrypt – brothers Raees and Ameer Cajee – and their investors.

As Moneyweb reported, a previous investment scheme of theirs was supposedly hacked in May 2019, causing more than a few Africrypt investors to suspect foul play. Two hacks in less than three years seemed a stretch too far for some investors, who suspect the Cajees are now using proxies to make an offer of compromise with the hope of avoiding jail time.

Read: Lightning strikes twice for Africrypt’s Cajee brothers

The latest offer of 65 cents in the rand is on investors’ deposited amount, not the current value of the ‘hacked’ bitcoin or Ethereum.

Investors who deposited into Africrypt in September 2019 would have paid about R120 000 for their bitcoin – which is today worth about R800 000.

This offer effectively means investors will be paid out less than R80 000 per bitcoin, for an asset that is worth 10 times that today.

Africrypt was run by the Johannesburg-based Cajee brothers, who solicited funds from investors by promising returns as high as 10% a day using a computerised trading algorithm.

These promises were even more outrageous than MTI’s claims of 0.5-1.5% returns a day.

MTI was placed in provisional liquidation a year after failing to pay out members’ requests for withdrawals. MTI also claimed to have a computerised trading algorithm, though no evidence of this was found by the Financial Sector Conduct Authority (FSCA) when it looked into it.

Read:
An inside look at how MTI managed to prolong an extraordinary losing streak
Beware of scammers promising to recover MTI bitcoin, say liquidators

Similarly, there is no evidence the Cajees were trading the cryptos entrusted to their care.

The Cajees disappeared around the time of the alleged hack, and are believed to be in the Middle East.

The first offer to buy out the claims of Africrypt investors made in November came with a catch: anyone accepting the offer would have to withdraw criminal charges against the Cajee brothers and their affiliated entities.

This condition was likely unlawful, and is referred to as ‘compounding’ in law, which is agreeing not to prosecute a crime in return for a reward.

The second rescue offer presented to investors last Friday (December 3) carries no obligation to withdraw criminal charges.

The first offer specified that the Cajees would be employed by Africrypt, which would be resuscitated as a trading entity so that investors could potentially earn back their full investment.

Investors hoped this would provide them with an opportunity to interrogate the Cajees as to the circumstances surrounding the alleged hack, and whether it was a genuine hack or an inside job. The Cajees have maintained the hack was genuine, and denied any involvement in what some believe was a heist, according to the BBC.

The identities of both the first and second ‘saviour’ investors remain unknown, though Ruann Kruger, legal representative for the Africrypt liquidators, says the second investor is a company.

“I am prevented from disclosing the identity of the company at this stage due to a non-disclosure agreement,” he tells Moneyweb.

“We have no idea of the identity of the first investor,” he adds.

Kruger says so far 35 out of 181 investors have signalled their intention to accept the offer.

Says a representative for some investors: “There are of course suspicions that this offer is coming via a proxy for the Cajees, and that we are being paid out with [our] own money. Either way, this is a clever tactic by whoever the investor is. It’s a divide [and] rule tactic.

“What I see happening here is the smaller investors are going to accept the offer, then the larger investors will be dealt with piecemeal. It’s a clever strategy, but a high risk one, because I believe some of the investors will not accept this offer, and will hold out for a better offer.”

Attorney Gerhard Botha, who is representing some of the investors, says any offer of 65 cents in the rand in any liquidation situation is not a bad deal.

“You must remember that up to now, there’s been no offer on the table. There’s also no proof that there was a hack, and there’s no proof that the money was actually invested [by the Cajees]. There is a strong possibility that this is a great deal for the Cajees, both legally and financially, but at the end of the day investors will make a decision based on purely commercial considerations,” he adds,

In a letter to Africrypt investors sent out on Friday, the joint provisional liquidators say they had not received any further communication or feedback from the first “third party investor” on the amended terms of the compromise offer – which attempted to indemnify the Cajees against criminal prosecution.

This raises suspicions among investors that the Cajees were behind the offer, which they decided to drop when it was pointed out that they could not buy their way out of potential jail time.

The letter from the provisional liquidators says the second offer of compromise is “a good, firm and less complicated offer that is open for acceptance for the next seven days”.

Those who accept the offer will receive 65 cents in the rand for any proven claim within five days of signature.

Africrypt investors are reckoned to have deposited about R120 million, though the value of their stolen cryptos today is worth many times this amount.

Article by:  for moneyweb.co.za

Jan 27
0

Arrest and a Criminal Record for Not Wearing a Mask?

By | Criminal Law / Crime, General Interest

“7,000 people have already been arrested for not wearing masks and most of them now have criminal records” (Police Minister Bheki Cele in mid-January)

We all know that wearing a face mask is the right and the safe thing to do, but it is also a legal requirement – and it’s one that you really don’t want to breach.

Firstly, can you be arrested for not wearing a mask?

The short answer is yes, the amended Disaster Management Act Regulations providing that –

  • Everyone (except children under six) must always wear a face mask (covering nose as well as mouth!) when in a public place.
  • It is a criminal offence not to comply with a verbal instruction to wear a face mask by an “enforcement officer” (defined to include SAPS and SANDF members, “peace officers” such as magistrates, Justices of the Peace, correctional services officers, municipal law enforcement officers and other designated officials). There are also reports of arrests without such an instruction being given beforehand, and as the police appear to be using their interpretation of the Regulations to conduct these “arrests without warning”, rather be safe than sorry – assume that if you have no mask you risk immediate arrest and prosecution.
  • You are liable on conviction to “a fine or a period of imprisonment not exceeding six months, or to both such fine and imprisonment.”
  • You need not wear a mask while undertaking “vigorous exercise” (not defined in the Regulations but presumably including fast running, cycling and the like – err on the side of caution here) provided that you continually maintain a distance of one and a half meters from any other person.
You could end up with a criminal record, and that’s real trouble

You can of course elect to go to court to fight the charge, but often you will also be given the alternative of paying an “admission of guilt” fine. 

It will be a tempting offer at the time but be careful – paying a fine is one thing but if you end up with a criminal record (an entry in the SAPS Criminal Record Centre database) you will regret it. Imagine for example a scenario where you apply for a job, or a travel visa, or a firearms licence, or for credit (such as a home loan). And suddenly up pops your long-forgotten criminal record, a nasty surprise at the worst possible time.

Plans to change the law so that only some admission of guilt fines will result in a criminal record have so far come to nought. So as the law stands you will end up with a “deemed” conviction and sentence – and thus a record – if you are arrested and your fingerprints are taken. Which is exactly what the Minister says will happen to you.

And once you have a criminal record, it’s not at all easy to get rid of it.

Three ways you can try to remove your criminal record  
  1. Firstly, you can apply for “expungement” of the record to remove it from the CRC database, but that option is only available to you after 10 years and for certain “minor offences”. It will also take a long time to process – “20 – 28 weeks” per SAPS. Note that some specified minor convictions fall away automatically after 10 years – ask for specific advice.
  2. Secondly, you could ask a court to set aside your conviction and sentence – costly, not an immediate fix, and not guaranteed to succeed.
  3. Thirdly, you could hope that planned amendments to our criminal procedure laws will retrospectively come to your aid – speculative for now.

The bottom line – wear your mask, and don’t admit guilt without legal advice!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Jul 28
0

Lockdown “Admission of Guilt” Fines – The Criminal Record Risk

By | Criminal Law / Crime, General Interest

Breaking any of our lockdown laws can be an expensive business, risking heavy penalties. 

If you are accused of a contravention and offered the option of paying an “admission of guilt” fine to avoid a court appearance, beware! It may seem like the easy way out to pay up and put the whole thing behind you but it could land you with a criminal record. 

You really don’t want to have a criminal record!

Having a criminal record comes with serious and lifelong negative consequences. Even an old and long-forgotten minor offence can hang around in the background until it suddenly pops up at the worst possible times – such as when you apply for a travel visa or a new job. 

When are you most at risk? 

The general rule is that you will acquire a criminal record if you are arrested, if the police open a docket and take fingerprints, and if you are thereafter convicted of a crime. 

The problem with admission of guilt fines is that they may well leave you with a “deemed” conviction and sentence which will end up in the CRC (SAPS Criminal Record Centre) database. Although there was talk in the past of the CRC capturing convictions with just your name and I.D. number the main risk seems to still be in having your fingerprints taken.

It’s not easy to get rid of a criminal record

And once you have a criminal record, it’s not easy to get rid of it.  

  1. Firstly, you can apply for “expungement” of the record to remove it from the CRC database, but that option is only available to you after 10 years and for certain “minor offences”. It will also take a long time to process – “20 – 28 weeks” per SAPS. Note that some specified minor convictions fall away automatically after 10 years – ask for specific advice.
  2. Secondly, you could ask a court to set aside your conviction and sentence – costly, not quick and not guaranteed to succeed.
  3. Thirdly, you could hope that planned amendments to our criminal procedure laws will retrospectively come to your aid – speculative and not yet in the pipeline.

The bottom line – if you are offered the option of paying an admission of guilt fine, ask for advice before you accept!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Oct 29
0

It Pays to Report Crime! First Offender’s 20 Years in Prison Confirmed for R4.9m Fraud

By | Criminal Law / Crime

“The scourge of white collar crime, especially fraud, is currently the order of the day in our country. Fraud is a cancer that is crippling our country from the core and takes away from the poorest of the poor” (extract from judgment below)

It is tempting sometimes to think that the high levels of criminal activity plaguing us at every level of our society are here to stay and that it is pointless reporting crime when you fall victim to it. 

But if we don’t all report crime when it happens, and if we don’t keep following up to ensure proper investigation and prosecution, we hamstring our courts. And that is self-defeating, because give our courts the chance to crack down hard on criminals and that is exactly what they do.  A recent Supreme Court of Appeal decision is only one of many such examples –

The SETA employee who stole R4.9m
  • The fraudster in question was employed for 2 years by a SETA (Sector Education and Training Authority). One of the SETA’s functions was to allocate grants to employers, education and training providers and employees, and one of the employee’s duties was to upload the banking details of grant beneficiaries onto the SETA’s payment system.
  • Together with two accomplices (one of them a bank official) he diverted grants to a fraudulent bank account on 26 occasions, the amounts involved ranging from under R100,000 to almost R1.4m. 
  • His fraud was “fortuitously” uncovered only several months after he resigned from the SETA, and he pleaded guilty in the Specialised Commercial Crimes Court to 26 counts of fraud totalling an amount of R4,898,158.21. He was sentenced to a total of 20 years imprisonment.
  • Relevant here were the minimum sentencing provisions in the Criminal Law Amendment Act which provide that even first offenders must be sentenced to a minimum of 15 years’ imprisonment for any fraud involving more than R500,000 (R100,000 for persons acting together or R10,000 for law enforcement officers) unless “substantial and compelling circumstances exist which justify the imposition of a lesser sentence”.
  • The High Court refused the fraudster leave to appeal against that sentence, and he approached the SCA.
  • The Court was unimpressed with the fraudster’s claim to have shown remorse and with his offer to come up with a repayment plan. Although he was a first offender, the Court characterised fraud as “a cancer that is crippling our country from the core” (full quote above) and noted that in this case “those severely affected were about 200 youth from disadvantaged backgrounds who were robbed of education and apprenticeship opportunities which would have enabled them to uplift themselves in society. Ultimately, these apprenticeships would have enabled them to attain jobs, which is a scarce commodity in our country.”
  • The end result – the fraudster must serve his 20 years.
Other “minimum sentence” crimes 

A whole range of other serious offences are also subject to similar minimum sentencing requirements – murder, robbery, rape, corruption, exchange control offences, sex and drug trafficking and so on. The list is a long one, and victims of crime can take heart from it.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Jul 29
0

Beware of Property Cyber Scammers

By | Criminal Law / Crime, Property

“Forewarned is Forearmed!” (Wise old saying)

Why yet another warning about cyber-scams in the property industry? It’s because the hard fact is that the criminals are winning this war. In fact we are now reportedly the “second most targeted country in the world with regard to cyber-attacks” (Law Society of South Africa).

Hence, no doubt, the Legal Practitioners Indemnity Insurance Fund report of “over 110 cybercrime related claims with a total value of R70 million” in the period July 2016 to August 2018.

The scammers are using more and more sophisticated techniques to lull their victims into complacency, and your best protection is your own vigilance – forewarned is definitely forearmed!

And remember that property transactions will always remain a firm favourite with online fraudsters for two simple reasons –

  • Property sales usually involve large amounts of money. 
  • Electronic communication between attorneys and clients is a fertile ground for interception and deception.
A seller’s or a buyer’s nightmare – every cent stolen! 

As a seller, you’ve sold your property for R5m, transfer to the buyer has been registered but the money doesn’t show up in your bank account (let’s call it “account A”). You phone your conveyancer only to be told “but we did pay you, we followed your instruction to pay into account B.” Of course account B was set up by a fraudster and your R5m is long gone. 

Or as a buyer, you have paid the full purchase price into the transferring attorney’s “new bank account C” and are shocked to be told by the attorney that you have actually paid nothing at all to anyone – except to a scamster. Good-bye both money and property!

What happened?

How your money gets taken – 2 main scenarios

Cyber criminals are resourceful, creative and constantly updating their methods so this is by no means an exhaustive list of your risk areas. To date however the two main categories of scam remain –

  1. Your attorney’s payments to you: As a seller, when you give the transfer instruction to your attorney you will nominate a bank account – account A in this example – to receive the sale proceeds. Before transfer however (often at the very last minute) the conveyancing firm receives a genuine-looking email “from you” changing your banking details to “my new account, account B”. Your emails to and from your attorney have been intercepted, and your details cleverly spoofed. Your money is gone – forever. Of course if you chose the right attorney to attend to your transfer in the first place this shouldn’t happen to you – but, as we shall see below, the scammers are so sophisticated now that you can never ever let your guard down, no matter how trustworthy the firm.
  2. Your payments to the attorney: The main risk here is to the buyer paying the whole or a large portion of the purchase price to the transferring attorney. Of course transfer duty and other costs of transfer can also add up to a tidy sum, whilst as a seller you will be paying for things like bond cancellation costs, rates, agent’s commission and so on.

    The scam here is that once again emails are intercepted, and this time you receive an authentic-looking but entirely fraudulent email asking you to pay into “account C”. The email appears to come from the conveyancing firm but of course it is again a clever (often very sophisticated) impersonation, this time of the firm’s branding, details and email address.

    The false account details might be in the email itself or in a falsified attachment – nothing is safe. The email may be in the form of a “we’ve changed our banking details” notification, or the criminal may work on the basis that you just won’t notice the change. And of course account C isn’t the conveyancer’s trust account at all, and the minute you make a payment into it your money is – once again – gone forever.

Who can you recover your stolen money from?

By the time you realise you have been scammed, the criminals are long gone and your chances of catching up with them are remote to say the least. 

So could the attorney possibly be liable? A recent High Court judgment deals with that very issue…

Court: Attorney negligent, must pay almost R1m

In this case a transferring attorney was ordered to pay her client damages of R967,510-53 for negligence.

In a nutshell, the attorney had attended to a property transfer for the sellers, and a scammer intercepted emails between the sellers and the attorney’s secretary. This was a classic “Scenario 1” operation, and seemingly a sophisticated one – the scammer persuaded the secretary to accept an emailed “my bank account details have changed” instruction and to pay the proceeds into the scammer’s account. 

The sellers sued the attorney for damages, the attorney denied any negligence whatsoever, but the Court found that she had indeed failed to carry out her mandate with the “due care, skill and diligence expected of a reasonable attorney and a conveyancer in the circumstances.”

What is important for you is that the Court reached this conclusion on the particular facts of this matter. There were specific factors present here such that a “diligent, reasonable attorney” would, said the Court, have taken steps to verify the information in the fraudulent emails. 

That suggests that there are many possible sets of facts which would have left the seller unable to prove any failure of duty by the attorney. Your risk is that if you try to hold the attorney liable you will have to prove that your loss resulted from his/her fault and not from yours – that’s never going to be easy and if you fail, you are left high and dry.

Protect yourself. Be vigilant!

So prevention really is much better than cure here. Litigation will be expensive and risky, and even if you succeed in your damages claim the attorney’s normal indemnity insurance excludes these types of claims so your victory could be a hollow one.

Fortunately there are several common sense steps you can take to minimise your risk – 

  • If you have the choice of transferring attorney (which you normally would have if you are the seller), choose an attorney you trust to do the job properly, carefully and professionally.
  • Having said that, no matter how much security your attorneys have put in place on their side, if it is your system that is vulnerable that is what the criminals will exploit. So keep all your anti-virus, anti-malware and other security software updated, learn all about protecting yourself from malware/spyware/phishing attacks, and generally treat all electronic communications with caution – even those appearing to come from a trusted source like your attorney.
  • Read “Is That Sender For Real? Three Ways to Verify the Identity of An Email” on FRSecure’s blog. All the tips given there are important, but at the very least use the methods given to find out where the email really comes from. Then check back to see that it matches in every detail the email address you were given at the start of the transfer process.
  • Be suspicious if anything in an email just feels “not-quite-right” – perhaps only a cell phone number is given, or a free generic email address (like Gmail) is used, or the wording is somehow “off”. If the email makes you even the slightest bit uneasy, err on the side of caution and investigate further.
  • Most importantly, never accept notification of any supposed change in your attorney’s banking details without visiting or phoning your attorney to check all is in order (don’t of course use the contact details given in the suspicious email, they could also have been doctored!). 

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews

Mar 13
0

Traffic Fines and Admissions of Guilt – Will They Earn You a Criminal Record?

By | Criminal Law / Crime, General Interest, Road Traffic

“We must not make a scarecrow of the law” (Shakespeare)

A criminal record, even for a minor offence from decades back, comes with very serious and lifetime consequences. It will hang around forever, just waiting to ambush you when you apply for a job, or a travel visa, or a firearm licence. 

So acquiring a record inadvertently is the stuff of nightmares, and the question is whether you can land yourself in that position by paying an admission of guilt fine? The reality is that we are beset by so many laws and regulations covering every aspect of our lives that most of us have paid admission of guilt fines at one time or another. Usually it’s just to avoid having to defend ourselves in the unpredictability and delay of an over-burdened court system. Sometimes it’s the more serious matter of avoiding a stay in a police cell.

A remedy, but it’s not ideal 

The remedy, once you do have a record, is to apply for “expungement” of the record to remove it from the CRC (SAPS’ Criminal Record Centre)’s database. Expungement is however only available to you after 10 years and for certain “minor offences” – plus your application will take a long time to process (“20 – 28 weeks” per SAPS). Note that some specified minor convictions fall away automatically after 10 years – ask for specific advice.

All in all, prevention is very definitely better than cure.

When are you at risk?
  • You will acquire a criminal record if you are arrested, if the police open a docket and take fingerprints, and if you are thereafter convicted of a crime.
  • Does that apply to admission of guilt fines? Firstly, with traffic offences find out what section of the Criminal Procedure Act (CPA) is involved. Minor offences – speeding, licence offences, illegal parking and the like are normally “Section 341/Schedule 3” offences, where there is no actual prosecution and therefore no criminal record to end up in the CRC.
  • Other offences however will likely be dealt with as “Section 57/57A” offences. An admission of guilt in those cases lands you with a “deemed” conviction and sentence, and until recently, that deemed conviction and sentence could well have ended up in the CRC database. In practice you would probably still have been in the clear if you weren’t actually arrested and fingerprinted, but several years ago there was talk of convictions being captured with just a name and ID number. If you want to be sure, apply for a clearance certificate – see “Applying for a Police Clearance Certificate (PCC)” on the SAPS website.
  • A “Section 56 Written Notice to Appear in Court” may also give you the option of paying an admission of guilt fine to avoid appearance in court – in which event section 57 would apply as above.
  • The point though is that a recent High Court decision means that any admission of guilt fine – even a section 57/57A one and even after an arrest and fingerprinting – should not lumber you with a “permanent conviction”. 

In other words, the new position is that while a court-imposed conviction and sentence will end up in the CRC, an admission of guilt fine should not. 

Let’s illustrate with a look at the case of the roadside grass seller…

A grass seller’s R500 admission of guilt fine comes back to haunt him
  • In 2010 a roadside seller of instant grass quarreled with another grass seller about use of a particular spot on the road. The other seller laid assault charges against him, alleging he slapped her twice and pushed her.
  • Arrested, detained and fingerprinted, the accused paid a R500 admission of guilt fine when given the option to do so. Per standard procedure a magistrate then “examined” the documents and the accused’s “deemed” assault conviction and sentence were entered firstly into the court’s record books and then into the CRC database.
  • The accused learned of his criminal record for the first time when in 2018 he applied to become an Uber driver (a police clearance certificate being an Uber requirement).
  • He turned to the High Court to set aside his conviction and sentence on the basis that he thought signing the admission of guilt was his only way of obtaining release from custody and that his rights had not been explained to him. Effectively he denied the assault, and took the chance that the State might still decide to pursue the prosecution in court.
  • The Court set aside our grass seller’s conviction and sentence, characterising this type of admission of guilt as “not a verdict” but rather “essentially an agreement between the State and the accused” intended only for “trivial offences”, and involving no consideration as to “whether the accused was in fact and in law guilty of the offence”. 
  • The Court: “A conviction and sentence following an entry into the admission of guilt record book by the clerk of the criminal court in the magistrates’ court is not a conviction whose record is permanent” nor “to be entered in the Criminal Record System”.
The bottom line

The Court found that this accused had been pressured into admitting guilt and ordered that the Minister of Police be served with a copy of its order with a view to taking advice from the Commissioner of Police in “devising policy to address the criticism that the SAPS use arrest and detention to force vulnerable members of society who fear being locked up, to admit guilt on petty crimes using arrest and the threat of continued detention.”

But even once such a new policy emerges, be careful here and have your lawyer advise you in the slightest doubt.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.

© LawDotNews