PRESENTATION ONCOMBATING FRAUDIN THE GAMBLING

INDUSTRY

23 JUNE 2015 VICTORIA FALLS

1

BY SENIOR ASSISTANT COMMISSIONERANGELINE GUVAMOMBE

CHIEF STAFF OFFICER (CRIME)POLICE GENERAL HEADQUARTERS

2

SCOPE OF THE PRESENTATION

Definition of fraud. General Fraud Trends. Legal Framework on Fraud in the

gambling industry. Crime and Gambling. Role of the Police. Challenges in combating Fraud in the

gambling industry. The solutions and responsibility.

3

4

DEFINITION OF FRAUD• deprive by deceit.

Generally fraud definitions are notuniversal, and can only beunderstood in the cultural context inwhich they occur.

According to Smith (2001), In legalterms, fraud is a generic category ofcriminal conduct that involves theuse of dishonest or deceitful meansin order to obtain some unjustadvantage or gain over another.

In the Zimbabwean context Section 136of the Criminal Law Codification andReform Act Chapter 9:23 defines fraudas making a misrepresentationintending to deceive another person orrealising that there is real risk orpossibility of deceiving another person;to his or her prejudice.

5

6

General Fraud Trends Traditional individual opportunistic

approach; Tax evasion/ under invoicing; Insurance fraud;

Real Estate/ Business and Residentialproperty;Corporate fraudAdvance fee fraud;

7

8

Financial/ Money market ; Cyber deception through false

e-mail messages;

International scholarshipfraud; and

9

Pyramid /franchise or Chainreferral scam;

Betting/ Gambling fraud Intellectual property fraud

10

Mining sector associatedfraud;

11

Legal Framework on Fraud

Various pieces of legislation are at thedisposal of the Police the world over incriminalizing illicit activities that occurin the gambling industry. Examples ofsuch legislation in Zimbabwe includefollowing among others:-

Criminal Law [Codification and Reform]Act Chapter 9:23

Money Laundering and Proceeds ofCrime, Act 4/2013

Criminal Matters [Mutual Assistance]Act Chapter 9:06

12

Extradition Act, Chapter 9:08. Lotteries and Gaming Act Chapter 10:26 Betting and Totalizator Control Act Chapter

10:02

13

14

Crime and Gambling

As police we have noted that there is arelationship between crime and gambling sincemore money is involved. Gambling related crimetends to relate to one of four distinct types whichare;1. Illegal gambling

. Operating without a gambling license

. Cheating at play2. Criminogenic problem gambling

. Activities such as forgery, embezzlement offunds

3. Gambling venue crimeThese include money laundering, passingcounterfeit currency, Theft, Assault, Prostitutionand Vandalism. Violence against gamblingindustry employees especially after a gamblerloses money.

15

4. Family AbuseVictimisation of family member’sgambling involvement, e.gdomestic violence, child neglect,suicide

16

Fraudulent Gambling Activities On The InternetThe main types of gambling fraud that currently operate on theinternet are as follows;1. Lottery scams

. Bogus e-mails notifying the person has won a lotteryand should do A.B.C or supply bank details

2. Fake gambling site scams. Unscrupulous individuals commit web page forgeries of

legitimate online gambling sites. The whole websitedesign can be stolen.

17

Continued…3. Betting software scams

. Involves software packages that claim to identify

opportunities to instantly win money through onlinegambling.

For example – predicting the outcome of random

events such as horse racing which may be impossible.

4. Gambling ‘bonus’ scams

. Gamblers receive e-mails offering them a cash bonus ifthey deposit so much money.

They do not get it for frivolous reasons that they arebanned gamblers or some online casinos cite “bonusabuse” as the reason.

18

Fraudsters tend to play on thepsychology of human greed.In Zimbabwe messages are sometimespassed on the mobile phones that onehas won so much money and needs todeposit so much in order to get themoney. That way the victim losesmoney to fraudsters.

19

5. The “twofer” scam. An online gambling site that have

conned a gambler once, does it again.The fraudsters entice the gambler usinga different site and defraud him/heragain.

20

6. Prize Scams. Pop up windows with congratulatory

messages that you have won a prize soone should deposit so muchadministration fee, etc.

21

22

THE ROLE OF THE POLICE ININTERNATIONAL LAW ENFORCEMENT

Considering transnational aspect of crime,Police continues to play a major role within andoutside the region, in the fight against all formsof crime. Police organizations have continued toactively participate in information disseminationand criminal intelligence sharing within regionaland international groupings such as:-

Asset Recovery Inter-Agency of SouthernAfrica [ARINSA]

Eastern and Southern Africa Anti-MoneyLaundering Group[ESAAMLG]

Stolen Assets Recovery Interpol

Interpol and

SARPCCO

23

OVERVIEW OF THE ROLE OF THE POLICEIN DOMESTIC LAW ENFORCEMENT

As an organization, ZRP derivesits mandate from Section 219 ofthe Constitution of Zimbabwewhich is maintaining law andorder as well as ensuring peaceand security in the country.

24

It has to be understood that whitecollar crime, fraud in particular isvery diverse, sophisticated anddynamic. As such, the policealone cannot provide thenecessary solution to theequation without the support andpartnership from other keystakeholders within the countryespecially the corporate world.

25

INTERNAL MEASURES AND SYSTEMS

In order to easily handle and managecases of fraud and corruption, policeorganizations have established internalmeasures and systems that specificallydeal with cases of fraud. In our case wehave specialized Sections such asSerious Fraud Squad, Commercial CrimeUnit and Crime Intelligence Unit.

26

Furthermore, our effort in the fightagainst fraud is ably supported bythe Attorney General’s Officewhich has continued to provideprosecution platform. On the otherhand the Zimbabwe Anti-Corruption Commission andFinancial Intelligence Inspectorateand Evaluation Section

27

CHALLENGES IN COMBATING THEFRAUD

• They are however challenges in combating Fraudrelated to betting due to the following:- Criminals or victims have the thrill to bet. Victims foresee a big payment at the end and as

such they just conclude that all their problemswill be covered.

Victims think betting brings about fast and easymoney.

Victims think that if one bets, he/she willbecome a millionaire within a short time.

In some cases failure to report the offence forfear of arrest where regulations are notfollowed.

28

Other people just engage in betting on thegrounds that their friends will also be inthat trade.

High Technology involved in online Fraud.

29

Since gambling fraud on the internet andcyber-crime in general, is highly technicaland global, there is need to enhanceextradition treaties.

Putting cyber-crime higher up the priorityagenda by nations inorder to protectconsumers.

Exchange of ideas through Regional andinternational fora.

Regional and International co-operation Awareness by potential victims Regular training and sharpening the skills

of an investigator is fundamental.

Solutions

31

Performance audit review is the key tosuccessful control measures and thefollowing are thus fundamental:Internal accounting controls;Setting the tone at the top;Separation/ rotation of duties;Periodic internal audits andunannounced spot checks;Regular systems modification, andMonitoring employee attitudes, life stylesand level of satisfaction.

What can the gambling industry do?.

CONCLUSION

In a nutshell, it is my ferventhope that this presentation hasshed light on how the gamblingindustry is a platform for theincubation of crime such asfraud.

guvamombeangeline@gmail.com32

Question and Answer

33

guvamombeangeline@gmail.com