Criminal syndicates are continuing use the Companies and Intellectual Property Commission (CIPC) - formerly known as CIPRO - to defraud individuals and companies. The CIPC has introduced controls which seem to have minimised company hijackings for the time being. However, the "cloning" of individuals through the CIPC continues unabated and the cloning of companies remains a problem.
A Politicsweb investigation was able to uncover eighty-two examples of suspiciously named companies and CCs established over the past two and a half years (see list below). Most, if not all of these, were set up with the intention of defrauding the named individuals and companies. Among the recent targets are Jacques Schindehutte, Telkom's Chief Financial Officer, and Tiger Brands.
The individuals and companies affected - who are completely innocent parties - are usually unaware that companies or CCs have been registered which seek to replicate their names.
Individual cloning fraud usually works as follows, to give a hypothetical example: A patient makes out a cheque to Dr Nigel Dieb and sends it through the post. The criminal syndicate intercepts the cheque at the post office and then registers a company called "Dr Nigel Dieb Trading" or simply "Dr Nigel Dieb". The director of the new company then opens a bank account in the name of the company, deposits the cheque and, once it has cleared, withdraws the money.
As with company cloning and company hijacking the objective is to set up a bank account with the same name as the individual or institution being targeted or a similar one. Unlike with company cloning the name of the new company or CC set up to clone an individual will (not necessarily) clash with one already in the system.
The ability of criminal syndicates to register numerous companies and CCs in the names of individuals - over the past two years - points to a lack of a proactive anti-fraud capacity at the CIPC.