Suspect arrested for R1.2 million speedpoint machine fraud! A 41-year-old man has been apprehended by the Hawks’ Serious Commercial Crime Investigation Unit as the second suspect in a sophisticated point-of-sale (POS) fraud scheme involving speedpoint machines.
The accused, arrested in East London, is set to face charges of fraud before the Mthatha Specialised Commercial Crimes Court on Monday.
Details of the Fraud Scheme: Targeting a Local Business
The investigation began when a hotel owner in Tsomo, Eastern Cape, reported discrepancies in their business transactions. The scheme, allegedly orchestrated by the suspects, involved the sale of fraudulent speedpoint machines—point-of-sale devices that appeared to function normally but instead diverted transactions into unauthorized accounts.
Hawks provincial spokesperson Ndiphiwe Mhlakuvana explained, “The hotel owner realized that sales from the POS machines were not reaching the business’s bank account.” The scheme is believed to have defrauded the business of approximately R1.2 million over a three-month period from July to September 2023.
The Deception: False Identity and Bogus Equipment
The suspects allegedly approached the hotel owner under the guise of being representatives of Yoco Technology (Pty) Ltd, a legitimate company known for providing POS solutions. Persuading the hotel owner of their authenticity, they sold three speedpoint machines for a total of R3,500. This ruse allowed the suspects to carry out a series of fraudulent transactions, siphoning funds away from the business into private accounts.
Once the hotel owner noticed the inconsistency in funds, he reported the case to the Hawks, which launched an investigation into the fraudulent transactions. By then, losses had already mounted to R1.2 million.
Arrest of the First Suspect: Dylan Buzz Strydom
The first suspect in the scheme, 27-year-old Dylan Buzz Strydom, was detained by the Hawks on September 23. Strydom, who allegedly worked with the recently apprehended suspect, appeared in the Mthatha Regional Court two days later and was granted bail of R500.
Following his release, the investigation into his involvement in the fraud continued, leading to the recent arrest of his alleged accomplice.
Authorities are now building a case to establish the level of coordination between Strydom and the 41-year-old suspect, as they believe the two worked in tandem to defraud the hotel owner.
How the Scheme Was Uncovered: Financial Red Flags
After the hotel owner reported the suspicious transactions, the Hawks conducted a forensic audit, which revealed that the POS transactions had been diverted to a separate bank account controlled by the 41-year-old suspect.
Hawks spokesperson Mhlakuvana confirmed the discovery, noting, “Funds from the hotel’s POS transactions were being redirected to a personal account, suggesting deliberate collusion.”
The investigation also uncovered evidence indicating that the two suspects had colluded to design and execute the fraud scheme, with Strydom allegedly playing a pivotal role in selling the fraudulent machines and ensuring that funds bypassed the hotel owner’s account.
The Role of the Hawks in Exposing the Fraud
The Hawks’ Eastern Cape head, Major-General Mboiki Obed Ngwenya, commended the swift action taken by the team in uncovering the fraudulent operation.
He praised their “swift response and proper utilization of expert investigation skills,” which enabled them to trace the financial trail and apprehend both suspects.
The Hawks’ Commercial Crimes Unit has established a reputation for handling sophisticated financial crimes involving banking systems, fraudulent transactions, and illicit financial flows.
This case, involving technological fraud, is part of their broader mandate to target economic crimes that affect small business owners and other individuals.
Next Steps: Preparing for Court
The arrested suspect, currently held in East London, is scheduled to be transported to Mthatha for his first court appearance at the Specialised Commercial Crimes Court.
Mhlakuvana confirmed that he is considered “a prisoner in transit” and will face charges alongside Strydom. Prosecutors are expected to present evidence of the financial manipulation and the role each suspect allegedly played in the scheme.
Implications for Small Business Owners
The case highlights the vulnerability of small businesses to sophisticated fraud schemes involving POS machines. Business owners are urged to verify the authenticity of devices and service providers, especially in situations where sales transactions could potentially be compromised.
Financial experts recommend that business owners conduct regular audits and verify all transactions, especially with third-party providers.
For businesses in the Eastern Cape, the fraudulent scheme serves as a cautionary tale. As POS technology advances, so too do fraudulent techniques, putting unassuming business owners at risk.
This case, once resolved, may encourage other business owners to increase vigilance and invest in more secure financial systems.
Ongoing Investigation and Community Support
The Hawks have assured the public that the investigation is ongoing and that additional suspects or fraudulent POS schemes will be targeted.
They encourage individuals who may have encountered similar fraudulent activities to come forward and report to the authorities.
Major-General Ngwenya concluded, “This investigation is a testament to our commitment to tackling economic crimes and safeguarding the financial interests of our community members.
We will continue to pursue justice in cases like these, ensuring that those responsible are held accountable.”
The arrests mark a step forward in combating fraud, providing a measure of justice to those affected and a warning to others engaging in illegal schemes.
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