Forensic Investigation: The Impact of Money-Laundering During Lockdown in South Africa

Abstract

Research shows that money-laundering has increased exponentially in South Africa during the lockdown caused by COVID-19 pandemic. According to the South African Banking Risk Information Centre (SABRIC), fraudulent online banking and transactions resulted in a sharp increase in cybercrime since the beginning of the lockdown in early 2020, resulting in a huge loss to the banking industry in South Africa. While the Financial Intelligence Centre Act, 38 of 2001 regulate financial transactions, it is evident that criminals are making use of advanced technology to their advantage. Money-laundering ranks among the major crimes, not only in South Africa, but world-wide. A purposive sample of banking employees and investigating officers from the South African police and private investigators employed by the four major banks in South Africa were interviewed using various platforms since lockdown prevented face-to-face interviews. The purpose of this article is to highlight the extend of money-laundering during lockdown and its impact in socio-economic factors. A non-probability sampling (purposive sampling) was used in selecting these participants. These included telephone calls and virtual interviews. The results indicate that there is a relationship between remote online banking and the increase in money-laundering as the system allows transactions to take place with limited verification processes. This paper highlights the significance of considering development of prevention mechanisms, capacity development and strategies for both financial institutions as well as law enforcement agencies in South Africa to reduce crime such as money-laundering. The researchers recommend that strategies to increase awareness for bank staff must be harnessed through provision requisite training and to be provided adequate training.