Avid-SSC case shows ‘all signs of organised crime’

THE Social Security Commission’s bungled N$30 million investment with little-known asset management company Avid Investment Corporation bears all the hallmarks of organised crime.

In an analysis of the threat this kind of crime poses to Namibia, Government attorney Ray Goba notes that “the whole scheme was a criminal design right from the conception of Avid as a registered commercial entity”. The conclusion of the High Court inquiry into the liquidation of Avid Investment Corporation comes at a time when Namibia is trying to clamp down on syndicate crime and money laundering through the Prevention of Organised Crime Act passed last year, and the Anti-Corruption Act in 2003.A workshop in Windhoek, which ended on Friday, took stock of organised crime in SADC countries and the progress made in implementing the UN Convention against transnational organised crime in SADC, also known as the Palermo Convention.The Palermo Convention was signed and ratified by more than 100 governments and came into force in September 2003.Goba used the revelations of the Avid inquiry at the workshop to demonstrate that Namibia had fallen prey to fraud, corruption and money laundering.Illicit diamond dealing is probably one of the oldest organised crimes in Namibia, followed by drug trafficking.But in recent years, fraud and theft of millions of dollars, mostly in public funds, has increased dramatically.”Organised criminal activity, unlike the proverbial dying horse, is alive and kicking hard,” Goba said.The fact that the same people involved in previous scams surfaced again, either as participants or beneficiaries in the Avid debacle, and that the victim was again the SSC, “clearly suggests a degree of planning and sophistication on the part of those involved”, he said.”The nature of the activities underlying the matter is consistent with the theory of a continuing criminal enterprise by an organised crime group for financial gain.”Typical aspects of organised crime which emerged in the Avid inquiry include: * political figures being implicated as being corrupt; * allegations of abuse of office through the exertion of political pressure on officials of the SSC; * attempted bribery of those officials; the embezzlement of funds even before they were properly invested and matured – all of which point to a scheme with criminal intentions, said Goba.”The revelations make this inquiry a classic study for anyone interested in researching organised crime,” Goba said of the Avid debacle.Goba identified distinct similarities between the SSC Presidential Inquiry and the inquiry into Avid’s liquidation in that they both involved “insiders”, investment brokers – “outsiders”, the payment of commissions or kickbacks for investment business placed through brokers, and the laundering of the proceeds by acquiring property and the placement of funds in lawyers’ trust accounts.These features also characterised the NHE scandal and the relationship between Government officials in the Ministry of Regional and Local Government, Housing and Rural Development and those of the NHE.In recent weeks, the Offshore Development Company’s (ODC) N$100 million and GIPF’s whopping N$700 million in dubious investments and developments have added to Namibia’s list of organised crime.Goba noted that Namibia had also fallen prey to two major cash-in-transit heists within four years of each other – in which N$10,5 million in total was stolen.More recently, sugar mogul Kallie Gruenschloss and high-ranking Government officials have been accused of large-scale tax evasion.The variety of drugs that find their way into Namibia was another reason why the implications of organised crime in Namibia should be studied, said Goba.Only when this was done, would policymakers and law-enforcement officials be able to design legislative, institutional and law-enforcement measures to meet what Goba termed the “present and gathering threat of organised crime”.The conclusion of the High Court inquiry into the liquidation of Avid Investment Corporation comes at a time when Namibia is trying to clamp down on syndicate crime and money laundering through the Prevention of Organised Crime Act passed last year, and the Anti-Corruption Act in 2003.A workshop in Windhoek, which ended on Friday, took stock of organised crime in SADC countries and the progress made in implementing the UN Convention against transnational organised crime in SADC, also known as the Palermo Convention.The Palermo Convention was signed and ratified by more than 100 governments and came into force in September 2003.Goba used the revelations of the Avid inquiry at the workshop to demonstrate that Namibia had fallen prey to fraud, corruption and money laundering.Illicit diamond dealing is probably one of the oldest organised crimes in Namibia, followed by drug trafficking.But in recent years, fraud and theft of millions of dollars, mostly in public funds, has increased dramatically.”Organised criminal activity, unlike the proverbial dying horse, is alive and kicking hard,” Goba said.The fact that the same people involved in previous scams surfaced again, either as participants or beneficiaries in the Avid debacle, and that the victim was again the SSC, “clearly suggests a degree of planning and sophistication on the part of those involved”, he said.”The nature of the activities underlying the matter is consistent with the theory of a continuing criminal enterprise by an organised crime group for financial gain.”Typical aspects of organised crime which emerged in the Avid inquiry include: * political figures being implicated as being corrupt; * allegations of abuse of office through the exertion of political pressure on officials of the SSC; * attempted bribery of those officials; the embezzlement of funds even before they were properly invested and matured – all of which point to a scheme with criminal intentions, said Goba.”The revelations make this inquiry a classic study for anyone interested in researching organised crime,” Goba said of the Avid debacle.Goba identified distinct similarities between the SSC Presidential Inquiry and the inquiry into Avid’s liquidation in that they both involved “insiders”, investment brokers – “outsiders”, the payment of commissions or kickbacks for investment business placed through brokers, and the laundering of the proceeds by acquiring property and the placement of funds in lawyers’ trust accounts.These features also characterised the NHE scandal and the relationship between Government officials in the Ministry of Regional and Local Government, Housing and Rural Development and those of the NHE.In recent weeks, the Offshore Development Company’s (ODC) N$100 million and GIPF’s whopping N$700 million in dubious investments and developments have added to Namibia’s list of organised crime.Goba noted that Namibia had also fallen prey to two major cash-in-transit heists within four years of each other – in which N$10,5 million in total was stolen.More recently, sugar mogul Kallie Gruenschloss and high-ranking Government officials have been accused of large-scale tax evasion.The variety of drugs that find their way into Namibia was another reason why the implications of organised crime in Namibia should be studied, said Goba.Only when this was done, would policymakers and law-enforcement officials be able to design legislative, institutional and law-enforcement measures to meet what Goba termed the “present and gathering threat of organised crime”.