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Crime and Fraud
Wednesday, May 1, 2013
SAICB investigates

In the month of March 2013, The South African Insurance Crime Bureau (SAICB) opened two new cases, bringing the total number of cases under investigation to 41, and amounting to approximately R530 million.

Case Update: Wildfire

A syndicate of seven members has been identified in the Durban area and is under investigation for submitting false claims to insurance companies. The subjects will buy a luxury vehicle from a salvage company and apply for finance from a reputable finance house. The subjects apply for the maximum finance amount possible by financing extras on the vehicles to ensure that they obtain a sizeable amount.
Once the finance has been approved and the subjects received the money from the finance house, the vehicle is reported as stolen or hi-jacked and a claim is submitted to the insurance company. The insurer subsequently pays the claim amount to the finance house. To date, the syndicate has submitted false claims to the value of R 2 100 000.00.
The first subject was found and arrested on 2013/02/26 and is now awaiting a trial date in the Commercial Court in Durban. Further arrests are imminent.

Case Update: Speed

In this case, a wreck of a luxury vehicle was bought by an individual (let’s call him Mr. Y) from an insurance salvage agent. The vehicle was registered, issued with a false roadworthy certificate and reregistered as a used vehicle under another subject’s name (Mr. X). Mr. X applied for and was issued a policy for household and motor insurance cover by an insurer.
A short while later Mr. X reported an accident, alleging that he was driving on the M4 highway near Umhlanga when a pedestrian crossed the road in front of him. He swerved to the left in order to avoid hitting the pedestrian and lost control of the vehicle, resulting in damages to the vehicle.
A claim was submitted and paid to Mr. X by the insurer. After the insurance claim was settled, the bulk of the payment was transferred from Mr. X’s bank account to that of a third subject, Mr. Z. Another smaller amount was also transferred into the account of Mr. Y.
The case is currently in court, where the accused submitted a section 105 plea bargain with the state, and will appear in court on the 23 May 2013 for sentencing. The approximate saving for the industry will translate into R1.2 million.

Copyright © Insurance Times and Investments® Vol:26.5 1st May, 2013
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