“[There is] a burgeoning increase in white collar crime, and particularly the sophistication, a lot of internal white collar crime by senior management of companies. Those are really the trends that we’ve been seeing,” Nortons Incorporated senior partner Anthony Norton told CNBC Africa.
South Africa’s business sector has seen a large increase in white collar crime in the past few years. While the level of this crime is more sophisticated and complex than others, it’s fast-becoming a means in which to siphon large amounts of money without getting caught or imprisoned.
A number of South Africa’s construction companies had been heavily fined for collusion last year, but no prison time service was given to those at the core of the charges. Significant public outrage ensued due to failure of accountability.
Norton explained that the construction case would not necessarily be categorised under white collar crime, but that there was nonetheless an internal failure within the country’s prosecuting frameworks that lead to fines rather than arrests and imprisonment.
“I think the construction case is a little unique. I wouldn’t put that in the traditional category of white collar crime. I think the difficulty that we’re having is really the inability of the National Prosecuting Authority to prosecute sophisticated crimes, [and] very poor levels of investigation by our police services,” Norton said.
“[There is also the] increasing disarray in both the National Prosecution Authority and in the police services, and a general inability to prosecute sophisticated crime. I think that is the biggest problem the country is facing.”
Norton added that the burden to address white collar crime is increasingly falling on the private sector.
Law firms and investigators attempt to put together dockets, which are then given to the National Prosecuting Authority, but the grave difficulties in the level of sophistication South Africa’s prosecuting services face when taking on such complex crimes.
“One only has to think of the Barry Tannenbaum Ponzi scheme, for example. We haven’t seen any prosecutions to date in any of those types of activities, and I think that’s symptomatic of what’s happening on a broader basis across the economy,” said Norton.
South Africa will have to start looking at more ways in which its legal structure can accommodate the prosecution of white collar crime, and begin to create a foundational framework for it.
A private and public sector collaboration could be a start to the construction of that framework.
“I think the increasing collaboration between the private sector, the Prosecution Authority and the police services [is good]. There is [a need for] a complete revamp of our commercial crime approach in South Africa," added Norton.
There needs to be much more levels of hiring sophistication in our prosecution services. Until we do that, until there are more resources, until the prosecution authorities are given greater resources, we’re going to continue to battle."