For South Africa’s prosecuting authorities, used to operating in something approaching geological time, the conviction of Sam Bankman-Fried for fraud relating to a failed crypto exchange must have seemed like a “blink and you’ll miss it” event.
Last week, Bankman-Fried was found guilty on seven counts of fraud related to the collapse of crypto exchange FTX, once one of the most trusted names in digital assets. Bankman-Fried formed FTX only in 2019, and his wealth soared to $23bn at one point.
A year ago, FTX tumbled into bankruptcy. Bankman-Fried was arrested on December 12 in the Bahamas, extradited to the US, and went on trial on October 3. Last week, after 15 days of testimony, he was found guilty, and will be sentenced in March.
This is rapid, but not a wild exception. In June 2020, payments company Wirecard admitted €1.9bn was “missing”, and within days, former CEO Markus Braun was arrested “on suspicion of accounting fraud”. His trial began last December.
Yet South Africa, a country which was placed on the Financial Action Task Force’s greylist in March partly because of the inability of our criminal authorities to hold white-collar criminals to account, isn’t even on the scoreboard.
In the case of Steinhoff, the retailer which imploded in December 2017 amid revelations of “accounting irregularities” of R106bn, there have been no arrests in South Africa, specifically of former CEO Markus Jooste. It’s a different story in Germany, where prosecutors in Oldenburg can at least point to the fact that Steinhoff’s former European finance head, Dirk Schreiber, has been sentenced to 2½ years in jail, while its former European CEO, Siegmar Schmidt, got a one-year suspended sentence. Here at home, where the fraud hit hardest, nada.
As veteran investor Piet Viljoen pointed out, Bankman-Fried “has gone from intern, to multibillionaire, to convicted criminal, to jail, all while Markus Jooste has been kicking back in Hermanus”.
This is a thin excuse for the fact that the NPA can point to precious few successes
This underscores the confusion in our criminal justice authorities when it comes to prosecutions strategy, a lack of skill in our police service to unravel complicated white-collar crime, and our prosecutors displaying a lack of faith in their ability to succeed.
Nor does this seem, inherently, to be a cash flow problem. This year, the National Prosecuting Authority (NPA) was allocated R5.4bn by the government. If this isn’t going into ensuring priority cases are handled properly, and the right people appointed, this looks more like a management issue than a resources problem.
Last month, NPA head Shamila Batohi told South Africans that the narrative of NPA failure is wrong. “We are one of the few prosecuting authorities across the world where we can say we are prosecuting former ministers, the former secretary-general of the ruling party, the former president of the country and also some of the most powerful CEOs,” she said.
Which CEOs, though? Not Jooste, obviously.
Batohi said the NPA “cannot and will not be rushed due to public or media pressure”.
This is a thin excuse for the fact that the NPA can point to precious few successes. The need for accountability can’t be summarily dismissed, as Batohi does, as some sort of reactionary, overzealous desire for punishment. In a society where people have become resigned to a lack of accountability for everything from shoddy service delivery to outright theft, shaming those who want justice seems a cynical attempt to evade responsibility.
Especially when it’s an imperative that global money-laundering authorities want to see as well, since it has challenged South Africa to “demonstrate a sustained increase in investigations and prosecutions of serious and complex money laundering.”
After all, if everyone else is doing it, why can’t we?
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