Alert bankers stopped a daring multi-million rand Land Bank swindle over Christmas.
Staff at Absa noted a sudden flurry of suspicious transfers on Christmas Eve from the Land Bank and froze the accounts.
It’s believed the thieves had set themselves a target of R150 million, setting up to 30 dummy companies with scores of fake accounts.
But this week Land Bank chief financial officer Wolf Meyer confirmed only R8m was fraudulently transferred.
“It was an inside job,” Meyer told the Saturday Star.
The bank has recovered everything, except for R380 000 that remains missing.
Only a select group of personnel have access to internet passwords to do electronic banking for the Land Bank.
The gang got secret Land Bank passwords by hacking into the bank’s hi-tech IT system.
Once in, they set up instructions for funds to be transferred to scores of companies – specially set up for the ruse – with accounts opened at Absa, the Land Bank’s official banker.
Investigators believe the gang chose the Christmas weekend, as the week between Christmas and New Year is traditionally the slackest time of the year for the banking sector, with large numbers of staff on leave and very little business being transacted.
The syndicate set up the electronic transfer of the millions for December 24 and waited for closing time at noon on Christmas Eve to start.
Some of the money would have been withdrawn over the festive weekend, and the following week through ATMs. Other funds were transferred to businesses involved in transporting large amounts of cash, with instructions to courier the money to certain destinations.
Sources close to the investigation yesterday described the syndicate’s operation as very sophisticated and meticulously planned by experts.
Meyer said the Land Bank immediately handed the case over to the police, and brought in forensic experts to assist in the investigation.
Investigators suspect three corrupt Land Bank officials were involved, and could have been helped by corrupt bankers at Absa and officials at the Companies and Intellectual Property Registration Office (Cipro), responsible for registering companies.
Absa is conducting its own high-level probe.
Senior Land Bank managers expect a string of arrests once the criminal investigation has been concluded. Meanwhile, one suspect was arrested when he tried to draw a large amount of cash at an ATM.
When he failed to get the money, he went into the bank to complain. Bank officials closed the doors and he was detained until the police arrested him.
A businessman involved in the secure transport of cash for clients, said he found himself drawn into the scam when a large amount of money was deposited into his account over Christmas, with the request for the money to be cashed and couriered on a client’s behalf.
The man, who does not want to be identified, realised something was wrong when he tried to draw cash to pay his employees and discovered Absa had frozen his account.
He did not say to whom or where the money had to be delivered.
Meyer said it was sad the Land Bank still had criminal elements, but senior management was relieved internal financial controls had proved effective in preventing the robbers from getting away with it.
The Land Bank is the country’s leading agricultural finance house. Known as The Land and Agricultural Development Bank of South Africa, the government started it in 1912 to financially assist established and emerging farmers.
It does not receive financial subsidies from the government, but obtains its money from money markets, like a normal bank. It does not pay taxes to the government or dividends to shareholders, but ploughs the money back into agricultural development.
The Land Bank has been touched by scandal before, notably when top bank officials siphoned off money meant for farmers from the R100m Agri-BEE Fund to pay for friends’ business ventures.
The extent of the fraud forced then Minister of Agriculture and Land Affairs Lulu Xingwana to persuade the cabinet to agree to the firing of the entire Land Bank board, and for criminal charges to be brought against virtually the entire top management implicated in the investigation.
Then Joyce Mohlahlane, wife of acting Land Bank CEO Dr Phil Mohlahlane, sued Xingwana for R100 000 for being involved in an adulterous affair with her husband.
Mohlahlane was fired after a PricewaterhouseCoopers forensic report uncovered gross irregularities in the management of the Agri-BEE Fund under his control. - Saturday Star