Financial Crime World

South African Courts Crack Down on Financial Crimes: A Closer Look at Fraud, Corruption, Forgery, and Theft

In the intricate world of financial dealings, distinguishing legal activities from illicit ones can be a challenge. This article provides an insight into some prevalent financial crimes in South Africa, focusing primarily on fraud, corruption, forgery, and theft.

Fraud

According to South African law, fraud is defined as the unlawful and intentional making of a misrepresentation that causes actual or potential prejudice to another (Prevention and Combating of Corrupt Activities Act 12 of 2004 (PRECCA)). This term applies to both corporate and business fraud.

For fraud to constitute a criminal offense, the following elements must be present:

  1. A misrepresentation: An intentional distortion or falsification of the truth
  2. The misrepresentation can take various forms: verbal, written, electronic, or implied through conduct
  3. Prejudice to another person, actual or potential

Absent the required misrepresentation, we are dealing with theft rather than fraud.

Corruption

Corruption, defined as a form of criminal activity under [Section 3 of the Prevention and Combatting of Corrupt Activities Act 12 of 2004 (PRECCA)], includes acts of bribery. Both the giving (active bribery) and receiving (passive bribery) of bribes are criminal offenses in South Africa.

Although not explicitly defined in South African legislation, bribery is encompassed within the definition of corruption. The Act does not distinguish between corruption involving public officials and private persons.

Forgery

A common law crime, forgery involves the unlawful production of false documentation and causing prejudice to another person with the intention to defraud them.

Though related, it is essential to note that forgery goes a step further, as it involves producing fake documents. Cases of forgery include creating:

  • Fake identity documents
  • Forged artwork
  • Forging a signature on a document

When a forged document is presented, the crime of uttering comes into play: the unlawful communication or presentation of a false document with the intention to defraud.

Theft involves the unlawful appropriation of moveable, corporeal property belonging to another with the intent to permanently deprive the owner of the property.

The Importance of Intent and Prejudice

The severity of financial crimes, as exemplified in various South African rulings, is underscored by the following cases:

All these rulings emphasize the importance of intent and prejudice in relation to fraud.