Money Laundering

Many laundering schemes are too complicated to be planned and executed by the criminals themselves. People with legal, banking or tax expertise or general business acumen often assist criminals to launder money. For example, in the first case in which a conviction was handed down for statutory money laundering, S v Dustigar, an attorney and a police officer played key roles in planning and operating different laundering schemes.

 

Prosecutions and convictions

Convictions for money laundering offences have already been recorded in a few cases:

S v Dustigar

In S v Dustigar (Case no CC6/2000, Durban and Coast Local Division) 19 persons were convicted for their involvement in the biggest armed robbery in South Africa’s history. Seven of the accused were convicted as accessories after the fact on the strength of their involvement in the laundering of the proceeds, and an eighth accused (Neethie Naidoo) was convicted on a count of statutory laundering under the Proceeds of Crime Act 76 of 1996. Many of the accused were family members or third parties who allowed the use of their bank accounts to launder the money. In some cases, they also allowed new accounts to be opened and fixed deposits to be made in their names to launder the money.

Accused No 9 (Nugalen Gopal Pillay) was a practicing attorney. A robber who turned state witness testified that the accused approached him at the court. After confirming confidentially that the witness participated in the robbery, the accused said that he “must (then) have a lot of money”. Sometime later he approached the witness and offered him an investment opportunity in a nightclub.

The attorney then brokered the deal between the sellers and the witness. He drafted a sales agreement in which the name of the purchaser was left blank. He handed R500 000 in cash to the sellers at his office as a deposit in terms of the agreement. He drafted another sham agreement in the name of another purchaser and also manipulated his trust account records to hide the identity of the purchaser and the actual amounts that were paid.

Accused No 9 was sentenced to five years’ imprisonment. The sentence can be converted into community service after at least one sixth has been served.

Accused No 13 (Balasoorain Naidoo) was a police captain who had served for 18 years in the SAPS. He created the laundering scheme that involved seven of the other accused. In the judgment the judge described him as a highly intelligent person with business acumen: Of all the accused who were convicted as accessories, accused No 13’s role was undoubtedly by far the most serious. He took upon himself the task of organising the so-called money laundering. He did so spontaneously and apparently with considerable vigour. He did so, furthermore, in enormous proportions. His ingenuity was limitless. In doing what he did he overreached and manipulated not only police colleagues, but also the women in his life who were under his influence, being accused Nos 15, 16 and 19.

The text published here is a summary of the text that facilitated discussions between the delegates of a workgroup presented by Pule Inc. It should by no means be construed as a comprehensive discussion on the issues raised herein and should also not be regarded as legal advice on the subject.