For 23 years Robbie Smith was one of the so-called walking dead, living and breathing and always a step ahead of the law. Then a tip-off led Hawks investigators to Smith’s Knysna hideout and a life of two decades on the run came to an end.
The walking dead has nothing to do with vampires or zombies; it is a nickname used in the insurance industry for people who fake their deaths or unknowingly have been killed off by fraudsters.
Smith “died” in a car crash in Vosloorus, Gauteng, on January 13 1999. A death notice listed Smith as unemployed and separated from his wife, Alice Abigail Boshoff. But the apparent separation didn’t stop Boshoff from cashing in on a R1.7m insurance claim on her estranged husband’s life.
Then in 2020, insurance company Old Mutual received a tip-off that Smith was very much alive and running an auto repair shop in the Western Cape tourist town. On November 8 2022 the Hawks arrested Smith and his wife on fraud charges and for the unlawful possession of firearms. But Smith beat his fraud charge.
“The case, I am afraid, fell through the cracks,” says Hawks spokesperson Capt Lloyd Ramovha. Too much time had passed, the statute of limitations had run out and the couple could not be charged with fraud.
The Hawks did, however, get a conviction on the illegal possession of firearms charge. Smith was given 24 months’ house arrest, according to Ramovha.
Smith is not an anomaly; there are many walking dead wandering among us in South Africa. And some of them hop from insurer to insurer, killing themselves off over and over. They do this thanks to an industry that prides itself on quick turnarounds where funeral policies, in particular, are paid out in a matter of hours.
I can tell you anecdotally that we are seeing increases, but is this due to the better use of technology, or is it due to an increase in fraud and crime?
— Garth de Klerk
The walking dead also take advantage of corrupt officials and crooked doctors willing to sign death certificates without seeing a body. Sometimes doctors also become victims of the scam, where their identities are stolen and death certificates signed in their name without their knowledge.
Besides the fake deaths, the insurance industry is also faced with murder for money crimes. The problem is that the statistics don’t drill down enough to provide an answer to the extent of these crimes, but this is set to change as part of a fightback by the industry involving plans for better sharing of data, improved co-operation with law enforcement and the use of new technology.
The Association for Savings & Investment South Africa (Asisa) has compiled a report containing the latest statistics on fraud within the insurance industry which, according to Asisa forensic standing committee convener Jean van Niekerk, examine categories of crime.
“This is the first year that we are expanding our statistics to start getting better insights around specific crime types and murder for money,” he says. “It is something that we need to get a better handle on so we can understand the size of the problem, because only with that can we drive better collaboration with law enforcement and between the public and private sector.”
What makes tracking these crimes difficult is the size of the industry. In 2023, according to Asisa, the country’s life insurers paid out on nearly 900,000 death claims worth R39bn. Of that number, 4.1% were declined. The reasons for nonpayment included dishonesty, fraud and what the industry refers to as contractual exclusions such as suicide.
What will help find the fraudsters among the hundreds of thousands of claims, says Van Niekerk, is the sharing of information across the industry. He says that within three to five years, consortium databases that will allow the various insurance companies to share information will be in place. This is something insurers are already doing overseas.
“If we look at how these fraudsters are able to jump from company to company, it takes too long for the industry to catch up to the modus operandi if the information is not rapidly shared,” he says. “It should be available to not just the insurance industry and sector, but also to all financial services entities.”
What is not helping the insurance industry is the backdrop of rising violent crime in the country. In the 2022/2023 financial year there were 27,000 murders in South Africa. Hidden in that number, say the experts, are the victims of murder for money.
Some of these killers are flagged and end up in court. Many of the masterminds, according to experts, are women such as policewoman Rosemary Ndlovu and Maryanne Tholile Dimba.
Dimba was the “CEO” of a murder for money business in KwaZulu-Natal that she ran from a plush upmarket security estate in Joburg. Dimba and her co-accused, Linda Mdluli and Sibusiso Buthelezi, were convicted in the Durban high court for the murder of seven people between 2005 and 2008. The gang would use false identities and bodies to claim insurance payouts from various companies.
But not all such killings make the media. Garth de Klerk, CEO of the Insurance Crime Bureau, says it is surprising how even small amounts of money become the motivation for murder. “I’m not going to murder somebody for R50,000, but if I don’t have anything on the table [and] I have no future prospects, then that auntie who ate too much at Christmas last year suddenly becomes a target, and that’s more or less what we see.”
These murders are hard to detect when they happen in rural areas. “I can tell you anecdotally that we are seeing increases, but is this due to the better use of technology, or is it due to an increase in fraud and crime?” he asks.
This is technology that can sift through large data sets. Machine learning, an application of AI that uses computer systems to learn and adapt while it searches for patterns in data, is proving helpful.
Then there is another initiative far removed from the white-collar world of insurance and finance that Peter Kerford, the head of forensic investigations for the Momentum Group, believes will go a long way in helping his industry fight fraud.
The initiative is being introduced at 11 mortuaries across Gauteng and involves using biometric scanners to help identify unclaimed bodies. Kerford, who is involved in the project, says it also adds security measures that prevent bodies being used for fraudulent purposes such as false death certificates.
Sometimes you have cases where you can see a gravesite is very old, whereas the claim says the person died only three weeks ago
— Peter Kerford
“The doctor who’s certifying the death would have to use his fingerprint to authenticate that he has been linked to this death registration. The fingerprints are then checked against home affairs,” says Kerford.
“The problem with bodies piling up in mortuaries is that it creates a problem for us as an insurer because if you’ve got a mortuary that is carrying excess capacity in terms of bodies, you will find there is a high possibility that they would be under pressure to release those bodies.”
Christo Schmidt, Avbob’s insurance executive, says his company has experienced the use of unclaimed bodies for multiple funeral claims as a common modus operandi.
The best weapon in the fight against insurance crime remains the Mark 1 eyeball belonging to the experienced investigator, who gets a hunch that something is just not right. For fraud investigators it means shoe leather, heading out to the scene of the crime.
Kerford has walked cemeteries looking for the graves of the supposed dead. “Sometimes you have cases where you can see a gravesite is very old, whereas the claim says the person died only three weeks ago. Then you go and make inquiries in the community and they say: ‘Oh, no, that grave, that guy, he died three years ago.’”
Once the crime has been uncovered, according to Kerford, it can get hair-raising. The community and criminals involved in the scheme often resort to intimidation, he says. Sometimes they even head to court.
Kerford worked a case that involved a R30m death claim where the syndicate behind the fraud sued a crematorium. These syndicates can be highly organised. Van Niekerk knows of internet cafés in some Joburg suburbs where false IDs and even forged payslips and bank statements can be bought.
“It goes to the extent where if a person wants to use this false payslip to apply for a loan, they can use a pseudo call centre. Some of the banks would phone the ‘employer’ to confirm employment and confirm the income and earnings. They have somebody sitting and waiting for those calls from the banks and they pretend to be the employer of that specific individual.”
Nearly a century separates the original black widow Daisy de Melker and Rosemary Ndlovu. De Melker killed two husbands and her son. The two husbands were murdered for life insurance payouts. Ndlovu’s tally was six. What the two women have in common is that it took a human to raise a red flag. In both instances, tip-offs to the police led to an investigation.
“That’s why I say you cannot replace a good human in the forensic space with AI, you can teach AI to sweat data and to sweat huge amounts of data in a very short period, but the human has to tell that system what it means,” says De Klerk.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.