The Directorate for Priority Crime Investigation (DPCI) – the Hawks – arrested six alleged investment scammers, along with 25 call-centre agents, as part of a multi-agency operation targeting a transnational fraud syndicate.
The arrests took place on 27 January and relate to alleged contraventions of the Financial Advisory and Intermediary Services Act, the South African Police Service said in a media statement. The arrests were made in Gauteng, including Bryanston, Randburg, and Centurion.
The suspects, aged between 38 and 61, were arrested during a joint operation involving – among others – several Hawks units, Gauteng Crime Intelligence, South African Revenue Service Forensic Investigation, the Financial Intelligence Centre, the United Kingdom National Crime Agency, the United States Department of Homeland Security, the South African Banking Risk Information Centre, Standard Bank, First National Bank, and private investigation company IRS.
INTERPOL deployed a senior representative from its International Financial Crimes and Anti-Corruption Directorate under the organisation’s Operation Jackal, which focuses on combating online scams and transnational financial crimes, SAPS said.
The suspects appeared in the Johannesburg Specialised Commercial Crime Court yesterday, facing charges of contravening the FAIS Act. The case was postponed to next week for a bail hearing.
The investigation was initiated in 2022 by the Hawks’ Gauteng Serious Commercial Crime Investigation Unit following statements provided by 43 victims based in Australia. This enabled the DPCI, in collaboration with INTERPOL and international law-enforcement partners, to mount a co-ordinated operation.
Investigators allege the suspects operated “boiler-room” call centres from Gauteng and the Western Cape, using call-centre agents to communicate with victims online. Victims were targeted through social-media platforms and persuaded to make initial small investments that appeared to yield high returns. Communication then continued via platforms such as Skype, Messenger, Zoom, and WhatsApp, until victims were convinced to invest larger sums of money.
The Hawks further allege the syndicate registered multiple companies to lease premises and open banking facilities, and operations were regularly relocated and company entities changed in an effort to evade detection. Investigators also allege the suspects used professional-looking branding, sophisticated websites with client log-in portals, fabricated marketing material, and false testimonials to create the appearance of legitimate investment platforms.
SAPS said the alleged criminal activities spanned several jurisdictions, with victims primarily identified in Australia, the United Kingdom, the United States, Canada, and New Zealand. More than 40 victims have been identified to date. They invested more than R1 billion in what they believed to be legitimate investment opportunities. It is further alleged that some of these funds were used to sustain the operations of the call centres.
Investigations into the matter are ongoing, and further arrests have not been ruled out.
In separate reporting, The Citizen quoted Chad Thomas of IRS as saying that private forensic investigators assisting the probe believe the alleged syndicate may have operated for close to a decade and that the scale of the fraud could be significantly larger than the losses disclosed by law enforcement.
Thomas was further quoted as saying that international estimates suggest the total value of the alleged fraud could exceed R10bn. Thomas also indicated that investigators documented tens of thousands of potential victims in some jurisdictions, including an estimated 20 000 victims in the US, although he noted that not all such cases may ultimately be linked to the South African-based operation.
