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HFMU Presentation. CONTENTS. 1. Introduction 2. Road Accident Fund 3. Fraud 4. Forensic Investigation Department 5. MOU with NPA 6. Creation of FITT 7. Working agreement 8. Working methodology 9. Results 10. Conclusion. INTRODUCTION.
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CONTENTS 1. Introduction 2. Road Accident Fund 3. Fraud 4. Forensic Investigation Department 5. MOU with NPA 6. Creation of FITT 7. Working agreement 8. Working methodology 9. Results 10. Conclusion
INTRODUCTION As a country’s economy grows stronger, the number of motor vehicles on its roads will increase. This of course leads to an increase in motor vehicle accidents [mva’s]. This has a direct impact on the social-economic activity of the country. The South African Government recognized as early as the 1940’s that government intervention was necessary to safe guard its citizens against financial ruin that may follow a mva. This lead to the creation of the Road Accident Fund [RAF] in 1946. The RAF is a creature of statute and is currently governed by the Road Accident Fund Act, Act 56 of 1996, as amended.
ROAD ACCIDENT FUND Vision: The Vision of the RAF is to provide the highest standard of care to road accident victims to restore balance in the social system. Mission: The Mission of the RAF is to provide appropriate cover to all road users within the borders of South Africa, to rehabilitate persons injured, compensate for injuries or death and indemnifying wrongdoers as a result of motor vehicle accidents in a timely, caring and sustainable manner, and to support the safe use of our roads.
ROAD ACCIDENT FUND The RAF forms part of the Department of Transport. It is funded by a levy on fuel which basically means that each and every road user contributes to the income of the RAF. In its most basic format the RAF can be describes as giving assurance to victims of a mva, be it injured people, people who are disabled and not in a position to continue to generate an income or dependents who has suffered loss of support, as well as the wrongdoer who will not be able to pay damages that would have followed from legal action.
ROAD ACCIDENT FUND The RAF is currently operated on a fault-based system where negligence of at least 1% on the side of the driver who caused the accident must be proved by the claimant in order to be successful with a claim. This opens the whole system up to massive litigation, that leads to money wasted on legal fees, attorneys making fortunes to the detriment of suffering claimants and huge delays in settling claims. It is for this reason why it has been decided to form the Road Accident Benefit Scheme [RABS] that will be completely no-fault. The concept legislation has recently been opened to the public for comment. Legal professionals in the third party environment is, as expected, very strongly opposed to this.
ROAD ACCIDENT FUND The heads of damages for can be claimed are: 1. General Damages. 2. Past Medical Expenses. 3. Future Medical Expenses. 4. Past and Future Loss of Income. 5. Past and Future Loss of Support. 6. Funeral Expenses.
FRAUD As everybody gathered here are aware, fraud in the 3rd party environment is rife and the RAF is no exception. In the last FY fraudulent claims in excess of R 150 000 000 were identified in 1103 files of 6467 files investigated. There are also a large variety of ways in which claims related fraud against the RAF are being committed. The majority of these varieties will be well known internationally.
FRAUD 1. Add-On: The largest number of false claims to date emanated from accidents that were either complete falsely created or where there was an accident but only the two drivers were involved. The accident is reported to the South African Police Service [SAPS], in the case where the accident did take place it is normally done for insurance purposes, and an Accident Report [AR] is completed. And here the fraud chain start.
FRAUD A copy of the AR is sold to a tout by a SAPS member with access thereto. The tout recruits “passengers” for the accident, instruct them on the story line of how the accident occurred and assist in the drawing up of affidavits and making copies of their ID documents. The tout completes the necessary forms and take these to a doctor, who for a fee, certify that he consulted with the claimant and that in his/her professional medical opinion were injured as a result of a mva. This bundle of documents is then sold to an attorney.
FRAUD 2. Evolving: In 2008 the Act was amended to reflect that a person can only claim for General Damages if such a claimant suffered a serious injury. A serious injury is defined as 30% or more bodily impairment. This took care of the thousands of fraudulent claims where whiplash to the neck was claimed as the injury. This was very difficult to disprove and although the payout for these claims were about R 80 000, we received literally thousands.
FRAUD After the Act was amended in August 2008 we saw, within months, a change in strategy. Foreigners from Swaziland or Mozambique who passed away in mva’s on South African roads was suddenly found to all have been married to South African women and they all had two or three children as well as solid employment in South Africa as, for example, a stock controller at a reputable supermarket chain. A claim for Loss of Support for the “wife” and “children” worth a few million rand then follows. A proper investigation however will show that the customary marriage certificate is false as is the employment certificate.
FORENSIC INVESTIGATION DEPARTMENT The RAF board realized in 2000 that fraud was rife and something had to be done. After an unsuccessful experiment with an external forensic firm a decision was taken to create an internal investigation capacity and the Forensic Investigation Department [FID] was born. It consists of a Senior Manager at Head Office and then units at each of our 5 regional offices. The units consist of a manager, three to five senior investigators, and one or two investigators reporting to the senior investigator. Currently FID has 90 approved positions.
FORENSIC INVESTIGATION DEPARTMENT The reporting line is FID staff in a region to the FID manager of that region. The managers report directly to the SM: FID and not to the General Manager of their respective regions. The SM then reports directly to the chairperson of the Risk and Ethics Management Committee of the Board. This ensures complete independence.
MOU WITH THE NATIONAL PROSECUTING AUTHORITY In 2002 it was found that criminal cases reported by FID to the SAPS were not receiving any attention. Those cases that did get attention from the SAPS and went to a prosecutor did not get the necessary attention there. This was mainly because of inexperience and huge work loads. It became clear that prosecutors who only attended to RAF cases were needed and after lengthy discussions a MOU was signed with the National Prosecuting Authority [NPA]. SAPS also bought into the concept and agreed to second members from the Commercial Branch.
CREATION OF FITT The signing of the MOU gave creation to the Fraud Investigative Task Team [FITT]. This entailed a National Co-ordinator who is a Deputy-director at the NPA who is in charge of FITT, a National Investigation Co-ordinator who oversees and manages SAPS investigations and a National Administration Co-ordinator who is in charge of the administration of all offices nationally. There are prosecutors and SAPS members at all of these offices and their sole task is dealing with fraudulent cases reported to them by FID.
WORKING AGREEMENT The number of claims identified as fraudulent and reported to FITT is very large and the number of seconded SAPS members are limited. The agreement is that FID will investigate as far as the law allows them [arrest and Sec 204] before handing the matter over. In the majority of cases everything is done and the cases can simply be registered [Case docket covers] and given to the prosecutor for a decision and an arrest warrant. When the case is placed down for trial the prosecutor will consult with the FID investigator who conducted the investigation before he/she is called to testify.
WORKING METHODOLOGY As mentioned earlier the people targeted by touts are the poor and destitute and of late singe mothers. No court will give a direct prison sentence and therefore no message is sent out and the cycle continues. In the past four years we have engaged in plea agreements with claimants where they plea guilty and is given a suspended sentence. In return they give us an affidavit setting out who approached them and how, whether they saw a doctor and if so when and whether they consulted with the attorney who lodged the claim.
WORKING METHODOLOGY When we have 80 to 100 claimants from several “accidents” who all incriminate the tout, doctor, attorney or SAPS member, we then register a criminal case against these individuals. We also insist on giving evidence in aggravation of sentence and ask the courts to impose direct imprisonment sentences in order to send out a strong warning.
CONCLUSION Reflecting on the position the RAF found itself in, in 2002 and looking back at the last 11 years since FID and FITT has started to co-operate, it is clear that this is the optimal way to fight fraud. The RAF has also over the years entered into several other MOU’s with both government agencies such as Home Affairs or, as very recently as last month with the South African Insurance Crime Bureau [SAICB]. It is very clear that fighting crime from within silos and a reluctance to share information will prove to be debilitating to any crime fighting cause.
