Transcript Keynote Address: Professor Dawie de Villiers

SCOPE OF PRESENTATION
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Introduction
The need to acknowledge different jurisdictions
Various faces of healthcare crimes
Law of evidence challenges
Forms of economic crimes in the healthcare
environment
The prevention of Organised Crime Act, 121 of 1998
Latest Constitutional viewpoint
The importance to keep up to date with new
technology
Six steps in the use of new technology
Conclusions
INTRODUCTION
 Title of address…
 “Prevention is better than cure”
 Good corporate governance, risk management,
controls, systems and other preventative measures
are important, but…
 Good (successful) investigation and prosecution that
lead to convictions and serious sentences – the best
prevention
 The war against economic crime is a team effort and
rely on partnerships
 To sensitise different role players to each other’s
responsibilities is of the utmost importance
 Sharing of knowledge and expertise leads to success
 Good law means nothing if the implementation and
application is fails
THE NEED TO ACKNOWLEDGE
DIFFERENT JURISDICTIONS
 Benefits of a global approach when combatting crime…
 S 39 of the RSA Constitution
 When interpreting the Bill of Rights, a court, tribunal or
forum- (a) must promote the values that underlie an open
and democratic society based on human dignity, equality
and freedom;
 (b) must consider international law; and
 (c) may consider foreign law.
 Be sensitive to differences
 Criminal Law – “Fraud”
 Law of Evidence – “Admissibility issues”
 Constitution – S 8 (2) – “Application”
VARIOUS FACES OF HEALTHCARE CRIMES
 Not a separate recognised crime
 Overlaps with common law crimes
 Theft
 Fraud (various forms)
 Forgery and uttering
 Overlaps with statutory offences
 Corruption
 Organised crimes
Money laundering
Racketeering
LAW OF EVIDENCE CHALLENGES
 The South African Law of Evidence is not codified
 Two sets of rules
 Statutory
 Hearsay
 Documentary evidence
 Opinion evidence
 ECT Act
 Entry search and seizure
 Interception and monitoring
 Common law
 No jury
 Economic crime situation
 Influence of the Constitution
FORMS OF ECONOMIC CRIMES IN
THE HEALTHCARE ENVIRONMENT
 Provider health care crimes
billing for services not actually performed
falsify a patient’s diagnosis to justify unnecessary
tests
misrepresenting procedures performed to obtain
payment for non-covered services (cosmetic surgery)
upcoding – billing for a more costly service
accepting kick-backs for patient referrals
unbundling – billing each stage of a procedure as if it
were a separate procedure
FORMS OF ECONOMIC CRIMES IN
THE HEALTHCARE ENVIRONMENT
 Consumer and syndicate health care crimes
claiming for services or medications not received
forging or altering bills or receipts
using someone else’s coverage (“identity fraud”)
theft of medical equipment and claiming the loss
from insurance companies
syndicates gunning for money paid out by hospital
cash plans
products are sold by insurance companies with the
intention to help cover shortfalls
the “patient” later splits the paid out sum with
their partners in crime
RECENT EXAMPLES OF
HEALTHCARE RELATED CRIMES
 20 people arrested in February – largest health care
fraud takedown in the history of the District of Columbia
(Medicaid fraud)
 Investigation uncovered numerous, separate schemes
involving fraud, kickbacks and false billings.
 In one scheme, the owner of three home care agencies,
is accused of collecting more than $75 million through
Medicaid programmes.
 Santam reported 79 cases of commercial crime
(including insurance fraud, forgery, and falsification of
documents and theft) worth R7.3 million in 10 months
 An accountant, recently appeared in Bellville SCCC on
55 counts of fraud and theft (R986,651) - He
allegedly stole money intended for orphans
(Plea bargaining)
RECENT EXAMPLES OF
HEALTHCARE RELATED CRIMES
 Another accountant employed by a pharmacy in Bellville
last month, was given a suspended sentence (4 years
suspended for five) on 10 counts of fraud involving R218,
510. (Received a R50,000 loan but banked it twice).
 On 27 February 2014 an employee of Statusfin submitted
25 false claims (R250,000). (Plea bargaining)
 A FinMark Trust study released in 2012 showed there were
between 1 and 1.5 million hospital cash plans in place,
covering about 2.4 million South Africans, with an estimated
50,000 new policies sold each month.
 The highest amount of abuse of these plans is taking
place in KwaZulu-Natal but it appears to be
spreading to other provinces.
OTHER ORGANISATIONS
INVOLVED WITH INVESTIGATIONS
 Hospital cash plans abuse
 The Association for Savings and Investment South Africa
 South African Insurance Crime Bureau (SAICB) was launched
in 2008 to address organised crime in the short term
insurance industry
 “Their aim is not to replace the internal investigation units
of insurance companies but to specifically look at crime,
affecting multiple companies, ie syndicated crime.
 This cannot be done in isolation, as the insurance industry
shares clients and criminals with other sectors like long term
insurance companies, medical schemes industry,
the banks and others.
 Ultimate aim is to create a joint initiative for the whole
financial services industry.
THE PREVENTION OF ORGANISED
CRIME ACT, 121 of 1998
 Section 1 of POCA provides that “enterprise” includes—
 “any individual, partnership, corporation, association, or
other juristic person or legal entity, and any union or group
of individuals associated in fact, although not a juristic
person or legal entity”.
 a “pattern of racketeering activity” means—
“the planned, ongoing, continuous or repeated participation
or involvement in any offence referred to in Schedule 1 and
includes at least two offences referred to in Schedule 1, of
which one of the offences occurred after the commencement
of this Act and the last offence occurred within 10 years
(excluding any period of imprisonment) after the
commission of such prior offence referred to in Schedule 1”.
LATEST CONSTITUTIONAL VIEWPOINT
 Savoi & Intaka Holdings v NDPP & Min of Justice &
Const Development 2014 (1) SACR 545 (CC)
 Criminal law challenge
 Law of Evidence challenge
 Not unconstitutional
 Organised crime in South Africa
 Message to forensic investigators
 Implication for health care crimes
THE IMPORTANCE TO KEEP UP TO
DATE WITH NEW TECHNOLOGY
 Director and joint head of Forensics at ENSAfrica,
David Loxton, says the bulk of his practice was devoted
to procurement fraud and business hijackings, two
years ago.
 However, in the past year it has shifted to cyber crime
— "the forum of choice for white-collar criminals".
 Loxton predicts that in the next three years the fruits of
cyber crime will outweigh the fruits of all other whitecollar crimes.
 Loxton says South Africa has a serious skills crisis in
this area.
 In his experience, police lack the expertise to deal
with cyber crime and there are "very few prosecutors in
SA who understand it”.
SIX STEPS IN THE USE OF NEW
TECHNOLOGY
 The identification and measurement of losses to crime is an
essential first step to successful combatting of the crime.
 For this we need to be hands on with our hardware and
software “tools”.
 The second step relates to the analysis of the data and for
this a more than basic knowledge of computer technology
is essential (do not hesitate to outsource when needed).
 Step three is to obtain the evidence in a lawful manner.
 Step four is to understand the admissibility requirements so
that the evidence will be acceptable in a court of law.
 Step five is to collect supportive (corroborating) evidence.
 Step six is to put measurements in place to prevent
it from happening again.
CONCLUSIONS
 Investigators should be sensitive about:
 differences in Criminal Law;
 the two sets of rules in the Law of Evidence;
 the influence of the Constitution on collecting
and presenting of obtained evidence;
 seeing some health care crimes as organised
crime;
 making use of the Constitutional court’s latest
viewpoint;
 the need to outsource if needed;
 the use of new technology in investigating and
preventing healthcare crime
Thank you!!