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Seizing Criminal Assets Seizing Criminal Assets to Fight Crimeto Fight Crime
National Prosecuting Authority
Report to Parliament
5 June 2002
Asset Forfeiture Unit
Willie Hofmeyr - Head
Ouma Rabaji – Head of Operations
Mission statement for 2002Mission statement for 2002We aim to take the profit out of crime by
providing an effective asset forfeiture service to government agencies and the public of South Africa. We will do this by:– Ensuring an 85% success rate– Seizing assets in 150 cases involving R250m– Applying for forfeiture in 100 cases involving
R150m – Obtaining forfeiture orders in 75 cases involving
R75m
AFU Strategic objectivesAFU Strategic objectives
1: Testing the lawto develop the law by taking test cases to
court and creating the legal precedents that are necessary to allow the effective use of the law
2: Rolling out volumeto build the capacity to ensure that asset
forfeiture is used widely and makes a real impact in the fight against crime
Objective 2: Cases doneObjective 2: Cases doneto datto datee
No Value Success
assets Rate
Seizures 150 R373m 88%
Forfeitures granted 55 R 22m 88%
Cases complete 21 R 5m Deposits in fund 12 R 0.7m
Update since reportUpdate since reportForfeitures granted have tripled in value
from R22m to R65m
Cases completed are up fivefold from R5m to R26m
Another R12m has been deposited into special fund, bringing deposits to R13m (Criminal Assets Recovery Account)
Large deposits into CARALarge deposits into CARAThis will be year of delivery into CARAThe first half of this financial year should
deposit at least R40m in CARAR12m from Hout Bay fishing case already inPlus orders already grantedAbout R6m from alleged Durban drug dealer
Ronny Johnny SmithAbout R15m from Durban illegal casino
kingpin GayadinR6m to R8m from sale of another Hout Bay
Fishing boat
Funds to fight crimeFunds to fight crimeAim of the AFU was to bring in more
money that its costs by year 4 – expected some delay as big cases take time to finalise
This target will now be achieved early In fact, the expected deposits of over R40m
will cover all AFU costs over last 3 yearsThese funds will be available to fight crimeHowever, some amendments may be
required to spend it effectively
Increasing roll-outIncreasing roll-outTo achieve the objective of making asset
forfeiture widely usedthe AFU would like to double the number
of cases (& value) every yearDuring the past year again achieved
exceptional growthDoubled the number of new cases and other
applicationsNearly achieved this for value of assetsAim to do the same again this year
Types of casesTypes of cases
Economic crime is about 34% of cases and 50% of assets
Corruption another 16% and 7% of assetsTends to be so because large amounts are
involvedImportant for stronger action against
economic crime – more organised crime involvement – eg Nigerian 419 scams
Types of cases (cont)Types of cases (cont)
Drug cases 31% of cases, 4% of assetsWould like to do more big dealers like
SmithViolent 7% of cases, 2% of assetsNatural resources 6% cases, 18% assetsBecome major area with abelone
smuggling, overharvesting
Priority casesPriority casesOrganised crime in all formsDrugs - dealers, cash and housesSerious violent crime with economic motiveSerious economic crime – esp where publicCorruptionPrecious metalsCleaning up areas: community irritantsProperty used to commit crimeNatural resources – added later
Building partnershipsBuilding partnerships A key focus for the rapid establishment of a
forfeiture capacity has been to build partner-ships, both locally and internationally
Great deal of help from other states that have use forfeiture effectively
USA, UK have given extensive advice and assistance
Also help from Canada and UN – esp useful has been a UK barrister with extensive litigation experience UN employed for a two year period to assist SA with advice
Local partnershipsLocal partnershipsLocal partnerships are even more importantAFU saw itself as a support organisation to
the SAPS, DSO, the NPS and other law enforcement bodies - depend on them to bring work to us
Proud of the good relations that have been built
PartnershipsPartnerships
The most effective model has been where full time task teams were established to work with AFU, but difficult given the resource constraints
Also focus on partnership with the private sector – to assist with growing forfeiture quickly, but also to help build business confidence in SA
Growth of AFUGrowth of AFUThe AFU has been able to grow quickly – in
the coming year it will grow to a staff of 76 including 48 lawyers
In large part our success is due to the foresight and commitment from the NDPP
Decentralising operations have been vital and have assisted in growing the organisation – now offices in Cape Town, Durban, Johannesburg, East London
This year in Port Elizabeth, Bloemfontein, Kimberley, Pietermaritzburg
Promoting representivityPromoting representivityThe AFU is proud of what it has achieved
in a field where skills are very specialised But more remains to be done to promote
representivity of African peopleAll Legal Manstaff
Designated 83 84 73Black 73 68 64African 50 39 46Women 50 48 36
Objective 2: Testing the lawObjective 2: Testing the law
Still focussed on test cases – imply very high quality of work, conservative case selection
But rolling out in areas where law is more clear, plus more adventurous approach
Decided on lower success rate than beforeIt is a vital part of increased roll-out
Important casesImportant cases
Many issues have been clarified in about 32 judgements thus far
But few of about 30 issues are finally settled
Rebuzzi case in the SCA settled the issue that the AFU can act even when all the recovered assets will go to compensate the victim
CasesCases
The most important judgement was in the Phillips matter where Heher J delivered a 120 page judgement dealing with a large number of issues
Also confirmed Bathgate judgement that chapter 5 is constitutional
One of the most important issues being litigated is whether chapter 5 is applicable when the benefit has been lost - Kyriacou
Constitutional issuesConstitutional issuesMohammed case was the first to be heard
in Constitutional Court– expect judgement probably in July
Cloete J ruled that POCA compels ex parte seizure proceedings, and that this is unconstitutional
The AFU argued that it is not Alternatively that POCA does not in fact
exclude the discretion of the court to allow for a hearing when it feels ex parte is not justified
The benefits of asset forfeitureThe benefits of asset forfeiture
Taking profit out of crimeTaking profit out of crime
Much of crime today is committed for an economic motive
Unless one can increase the risk and decrease the profits, it will be impossible to deal effectively with crime
DeterrenceDeterrenceIt has an important deterrent effect by
hitting the crime bosses where it hurts most ‑ in the pocket
Many criminals see gaol as an occupational hazard – the expect their families to be comfortable while they are inside, and that they will be well‑off when they are released
Putting their families on the street and removing their favourite playthings and their “pensions” causes them real pain
Removing the asset baseRemoving the asset base
Even where it is possible to convict syndicate heads, civil or criminal forfeiture has proved valuable
It ensures that the businesses, properties, cars, bank accounts and other assets used by the organisation do not remain behind for the use of a new leadership
Hitting syndicates in the Hitting syndicates in the pocketpocket
It is very difficult to convict syndicate heads as they are seldom directly involved in crime
The small guys who are convicted seldom own any of the assets
Civil forfeiture enables the state to get at the assets of the syndicate and at least hurt them financially
Easier burden of proofEasier burden of proof
Civil forfeiture only requires proof on the balance of probabilities
Thus it can be used even when the evidence is strong enough to prove anyone guilty beyond a reasonable doubt
Getting at the real ownersGetting at the real ownersForfeiture gets behind the increasingly
sophisticated efforts of syndicates to hide the real ownership of assets, such as front companies, trusts or nominee owners
Criminal forfeiture ‑ retrieve gifts Civil forfeiture by going directly for
property
Closing down criminal Closing down criminal infrastructureinfrastructure
Civil forfeiture has been used successfully to close down the infrastructure used for criminal activities, such as drug houses, cars, bars and clubs
Funds for law enforcementFunds for law enforcement
Additional benefit that seized assets that are not returned to victims, must be used for law enforcement
Should not become main purposeBut it is an important incentive to persuade
law enforcement agencies to devote their scarce resources to doing the additional work required for forfeiture
ConclusionConclusionAsset forfeiture is an important part of the
war against crime ‑ it hits the crime bosses where it hurts most ‑ in the pocket
It is a vital part of increasing the deterrence, esp in areas such as economic crime where it is low
But most importantly, forfeiture is a vital weapon to take the profit out of crime
If we are to deal effectively with crime, it must become true “that crime does not pay”