Police alert after PE firms scammed out of millions

More than R22-million has been stolen from Nelson Mandela Bay businesses over the past year in a scam experts warn could cripple small companies.

The syndicate, which operates nationally, is believed to be targeting businesses in the city, with R13.5-million lost in 11 separate cases last month alone.

The Hawks’ specialist commercial banking and cyber-crime division has taken over most of the cases, with 33 cases totalling more than R22-million, reported in the Bay since December.

In one instance, a Port Elizabeth businessman was conned out of R3.8-million after the fraudsters set up a “ghost company”, with a fake website, bank account, clearance certificates, physical address and e-mail accounts.

The Nelson Mandela Bay Business Chamber said the losses would have dire consequences for companies and could result in job losses.

The cyber-crime division also warned that “faceless, professional and well-organised con artists” were targeting companies, leaving several penniless.

Police spokeswoman Captain Sandra Janse van Rensburg said the criminals would contact a business claiming to either be the representative of a government department or the winner of a tender wanting to subcontract.

“They say they want specific items or brand names, knowing the company does not supply that item,” Janse van Rensburg said.

“The fraudster then sends the [targeted] company the website details of another company they say could supply the specific items they want.”

By the time the con artists contact the targeted business, the fake website has been set up and the research is all done.

“With everything looking legit, the [targeted business] places an order for the goods wanted and pays for it,” she said.

“The entire scam is very well-researched and the con artist knows exactly what the company sells before making contact.

“The ghost company is never based in the same region as the targeted one and [the fraudsters] make sure it is the only ‘supplier’ of that specific product in South Africa.”

A Port Elizabeth businesswoman, who owns a small wholesale company, was duped out of R600 000 when the tricksters claimed to be from the Department of Defence.

“It was devastating. They took my life savings,” the woman, who did not want to be named, said.

“The con artists were very organised, with answers for everything.

“They sent me declaration forms and police clearance certificates, all of which seemed legit.”

Janse van Rensburg said the state departments used by the criminals included defence, public works, correctional services, social development, minerals, and health and sanitation.

“Last month’s monetary value is more than half of the entire year’s value,” she said. “This shows the scam is targeting Bay businesses.”

Police suspect the syndicate operates on a national level.

“Most of the time, the false bank accounts are opened in Gauteng but they do move around to all provinces,” Janse van Rensburg said.

Nelson Mandela Bay Business chamber chief executive Kevin Hustler said they were unaware of the scam but would consult with police to warn its members.

“The scam could very well result in job losses and have other serious financial consequences,” he said.

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2 thoughts on “Police alert after PE firms scammed out of millions

  • November 8, 2016 at 2:29 pm
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    Too much online business these days. Much better to go to a supplier and check it out, at least for the first few orders. Check out customers too. Go to their premises and see if it is a legit business that’s been operating for a while. See the faces and the offices and the production lines etc.

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  • November 8, 2016 at 10:54 am
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    They tried a similar thing with us. Very official documentation from the Department of health ordering about a million rands worth of gas cylinders and the were very persistent. After many attempts trying to contact the actual Department (which was a nightmare in itself) one of my calls was answered and we were informed it was fraudulent.

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