Commercial Crime Manual

DIPLOMA IN POLICE STUDIES
COMMERCIAL CRIME
TRAINING MANUAL
[DPS 111]
COMMERCIAL CRIME TRAINING MANUAL ZIMBABWE REPUBLIC POLICE ACADEMY
Compiled by
Musikavanhu Charles
Mwatipedza Blessing
Shayanewako Langton
Chiangwa Nyaradzo
Typesetting by
Rutanha Takuranashe
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TABLE OF CONTENTS
.........................................................................................................i
TABLE OF CONTENTS...........................................................................ii
MODULE OVERVIEW............................................................................iv
UNIT ONE..........................................................................................1
ZIMBABWEAN LAW AND COMMERCIAL CRIME.........................................1
1.0. INTRODUCTION......................................................................1
1.1. Definition of concepts..............................................................2
Commercial crime............................................................................2
White Collar Crime...........................................................................2
Crime 3
1.2. Elements of a Crime.....................Error! Bookmark not defined.
1.3. Forms of Commercial Crime.....................................................3
1.4. Characteristics of White Collar Crime.........................................4
1.5. IMPACTS OF WHITE COLLAR CRIME...........................................5
1.6. Efforts That Are In Place to Curb White Collar Crime In Zimbabwe. 6
1.7. Personality Traits of White Collar Criminals.................................6
1.8. Criminological Perspective of Commercial Crime..........................7
1.9. ZIMBABWEAN LAW................................................................14
1.10. Sources of Zimbabwean Law...................................................15
1.11. The Role of Courts In Dealing With Commercial Crime................19
UNIT TWO........................................................................................21
PRIMARY COMMERCIAL CRIMES..........................................................21
2.0 INTRODUCTION........................................................................21
2.1 Fraud and fraud management.................................................22
2.2 Characteristics of Fraud..........................................................22
2.3 Techniques of Fraudsters........................................................24
2.4 Motivators of Fraud...............................................................24
2.5 Types of Fraudsters...............................................................24
2.6 Theories of Fraud..................................................................25
2.7 TYPES OF FRAUD..................................................................36
2.8 FRAUD PREVENTION..............................................................41
2.9 Fraud detection.....................................................................47
2.10 INDICATORS AND WARNINGS OF FRAUD..................................48
2.11 Relevancy of Red Flags in Fraud Investigations..........................53
2.12 THEFT.................................................................................54
2.13 COUNTERFEIT CURRENCY.......................................................56
Methods used to print counterfeit currency............................................57
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2.14 ELECTRONIC CARD FRAUD.....................................................57

How Are Electronic Cards Forged or Counterfeited?................................59
2.15 INTERNET BASED FRAUDS.....................................................63
2.16 Conspiracy...........................................................................68
2.17 Money Laundering.................................................................69
Methods of washing dirty money.......................................................72
Criminalizing Money Laundering.......................................................74
The role of financial institutions........................................................74
UNIT THREE.....................................................................................79
OTHER COMMERCIAL CRIMES.............................................................79
3 INTRODUCTION.........................................................................79
3.1 Stock Market Manipulation and other securities related offences...80
3.2 Criminal Breach of trust.........................................................86
3.3 CUSTOM AND EXERCISE OFFENCES.........................................87
3.4 SECRET COMMISSIONS..........................................................97
3.5 PLANNED BANKRUPTCY........................................................102
Types of Bankruptcy Fraud.............................................................103
i. Concealment of Assets.........................................................103
2. Petition Mills.......................................................................103
3. Multiple Filings....................................................................103
3.6 DEALING WITH PROPERTY OBTAINED THROUGH CRIME............104
3.7 INVESTMENTS SCAMS..........................................................104
3.8 ADVANCE FEE FRAUD...........................................................107
UNIT FOUR.....................................................................................115
CYBER (ELECTRONIC) FRAUD............................................................115
4.0 INTRODUCTION.....................................................................115
4.1 DEFINITION OF CYBER CRIME...............................................115
4.2 TYPOLOGY OF CYBER CRIMES...............................................116
4.3 CYBER CRIME SCENE ATTENDANCE AND SECURING.................144
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MODULE OVERVIEW
The world is continually moving towards a commercial economy, the
one in which every walk of life is going digital. Commercial crime, in its
various forms, is one of the dangerous enemies of economic
development in most states and corporations. It is on the increase and
the cost to society is also increasing, not only in money and property
stolen by criminals but also in terms of loss in confidence and respect
by public at large in both public and private institutions. Commercial
crime investigators need to be aware of the nature of commercial
crimes so that they may be able to investigate and detect commercial
crime cases successfully.
Unit one covers the sources of Zimbabwean law in relation to

commercial crime. It clearly defines white collar crime as a form of
Commercial Crime. It identifies offences that form up commercial
crime including the characteristics of commercial crime. It goes on to
explain some efforts that are in place to curb Commercial Crime. The
unit also identifies the role of courts in commercial crime and discusses
the theoretical perspective in commercial crime.
Unit two covers some primary commercial crimes namely, fraud, theft,
counterfeit currency, credit and debit card offences, conspiracy and
money laundering. It also spells the legal way of dealing with the
specific crimes and fraud management.
Unit three covers other commercial crimes like Stock market

manipulation and other security related offences, criminal breach of
trust, custom and excise offences, secret commissions, planned
bankruptcy and possession of goods obtained by crime.
Unit four covers computer related commercial crimes namely hacking,

fraud, paedophiliac rings, online child sexual abuse investigation,
defamation, immigration fraud, narcotics trafficking, credit card
cloning, software piracy and others.
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UNIT ONE
ZIMBABWEAN LAW AND COMMERCIAL CRIME

1.0. INTRODUCTION
Commercial crime, in its various forms, is one of the dangerous

enemies of economic development in most states and corporations.
Commercial crime is on the increase and the cost to society is also
increasing, not only in money and property stolen by criminals but also
in terms of loss in confidence and respect by public at large in both
public and private institutions. Commercial crime investigators need to
be aware of the nature of commercial crimes so that they may be able
to investigate and detect commercial crimes cases successfully.
OBJECTIVES
At the end of this unit, trainees should be able:
1. Define Commercial Crime and White Collar Crime.
2. Identify offences that form up Commercial Crime.
3. Describe characteristics of commercial crime.
4. Identify and explain any efforts that are in place to curb Commercial
Crime.
5. State and explain any sources of Zimbabwean law in relation to
commercial crime.
6. Identify the role of courts in Commercial Crime
7. Discuss the theoretical perspective in Commercial Crime
1.1. DEFINITION OF CONCEPTS
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Commercial Crime
It covers crime such as fraud which is deceiving a person or a

company to get goods and money through forgery. It is caused by
greed, common criminality and uncertainly about employment
(Peacock 2013). Several terms have been used to describe various
offences which take place in the business environment. However the
widely used term is white collar crime hence the term will be used for
this course. In the 1940s, Edwin Sutherland wrote an important work
about white-collar crime, a term he coined. Sutherland noted that
these crimes were deliberate, repeated, extensive and harmful.
White Collar Crime
It is the crimes committed by a person of respectability and high social

status in the cause of high status in the cause of his occupation
(Peacock 2013). Sutherland (1940), defined white-collar crime as:
“crime committed by a person of respectability and high social status
in the course of his occupation”. Sutherland wished to challenge the
overwhelming criminological and law enforcement focus upon ‘street
crimes’ and other offences committed by those from lower socio-
economic groups. Over the years, Sutherland’s definition of white-
collar crime has been criticised.
Radzinowicz & Wolgang (1977), in their book Criminology say; “White

collar crimes are illegal acts characterised by guile, deceit and
concealment and are not dependent upon the application of physical
force or violence or threats of violence thereof. They may be
committed by individuals acting independently or by those who are
part of a well- planned conspiracy.
Weisburd and Waring (2001), define white-collar crime as economic

offenses that are achieved through some combination of fraud,
deception, or collusion.
While societal status may still determine access to wealth and

property, it can be argued that the term should be broader in
scope and should include virtually all nonviolent acts committed for
financial gain regardless of one’s social status. Given the complexity of
white-collar crime, many substitute terms have been proposed over
the years.
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Clinard and Quinney (1973) and Rosoff et al (1998), categorised

white-collar crime into corporate crime and occupational crime.
Corporate crime is criminal activity on behalf of a business
organisation committed during the course of fulfilling the legitimate
role of the corporation and in the name of corporate profit and growth
Occupational crime is committed by individuals in the course of their
employment and manifests through stealing, defrauding, and cheating,
both in and out of an occupational context
Crime
According to Bartol (2008), crime is an action or omission which

constitutes an offence and is punishable by law.
Victim
It is a person who is harmed, injured or murdered as a result of crime

(Shapland 2007).
1.2. Forms of Commercial Crime
White-collar crime is a crime committed by persons who, often by

virtue of their occupations, exploit social, economic, or technological
power for personal or corporate gain. The term, coined in 1949 by the
American criminologist Edwin Sutherland, drew attention to the typical
attire of the perpetrators, who were generally businesspeople, high-
ranking professionals, and politicians. Since Sutherland’s time,
however, such crimes have ceased to be the exclusive domain of these
groups. Moreover, developments in commerce and technology have
broadened the scope of white-collar crime to include cybercrime
(computer crime), health-care fraud, and intellectual property crimes,
in addition to more-traditional crimes involving embezzlement, bribery,
conspiracy, obstruction of justice, perjury, money laundering, antitrust
violations, tax crimes, and regulatory violations.
Specific examples of activities that constitute white-collar crimes

include price collusion (conspiring with other corporations to fix the
prices of goods or services as a means of obtaining artificially high
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profits or driving a competitor out of the market), falsifying reports of

tests on pharmaceutical products to obtain manufacturing licenses,
and substituting cheap, defective materials for costlier components
specified in the construction of roads or buildings but charging the
customer for the full cost of the specified materials. At times such
activities can be attributed to individual employees or executives
acting on their own initiative, but it is often the case that they
represent a collective and organized effort by a corporation to increase
its profits at any cost.
NB-Commercial crime however includes other crimes that do not fall

into the category of white collar crime, e.g. Robbery, Unlawful entry,
Theft and Extortion.
1.3. Characteristics of White Collar Crime
Although white-collar crimes are quite varied, most have several

characteristics in common:
a. First, they involve the use of deceit and concealment, rather

than the application of force or violence, for the illegitimate gain
of money, property, or services. A defendant convicted of
making false statements in order to obtain a government
contract, for example, is considered a white-collar criminal. It is
deceitful- People involved in white collar crime tend to cheat, lie,
conceal, and manipulate the truth.
b. Next, white-collar crimes typically involve abuse of positions of
trust and power. Public officials who solicit and accept bribes, or
corporate officers who fix prices to drive competitors out of
business, are engaging in such abuse of their positions.
c. White-collar crime is also often more difficult to detect than

other types of crime, in part because losses may not be
immediately apparent to victims but also because the crimes can
involve sophisticated schemes and cover-ups. Many white-collar
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crimes require concerted criminal activity by coconspirators. For

example, a case of real-estate fraud may involve the knowing
participation of an escrow officer, a buyer, an appraiser, and a
bank officer, all of whom were willing to sign false documents to
perpetrate a fraud for personal gain.
d. The monetary sums that are involved tend to be large.

e. It is intentional- Does not result from simple error or neglect but
involves purposeful attempt to illegally gain an advantage.
f. White collar crime is rarely prosecuted and criminals are rarely
convicted.
g. White collar crime tends to be intermingled with legitimate
behaviour.
h. Evidence that they have taken place is not as clear as with street
crime.
i. Corporate criminals are not heavily stigmatised- They do not
acquire criminal identities.
a. White collar crime tends to be made up of sophisticated and
relatively technical actions.
b. Harm is usually spread out over a substantial number of victims.
The intention to do harm to the victim is usually absent.
1.4. IMPACTS OF WHITE COLLAR CRIME
 Direct losses- loss of tangible assets such as inventory and cash.

 Costs of preventing white collar crime expenditure to white collar
crime prevention entities, precautionary behaviour.
 Costs of responding to white collar crime costs to the criminal
justice system, expenditure through internal or outsourced
investigations.
 Loss of competitive advantage.
 Reduced ability to meet customer demands.
 Reputation impairment.
 Disruption of business operations.
 Collapse of businesses.
 Lowered employee morale due to increased security measures.
1.5. Efforts That Are In Place to Curb White Collar Crime In

Zimbabwe
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Due to a rampant increase in commercially related crimes, the

Government of Zimbabwe managed to establish various bodies, acts
and units that are specifically meant to thwart the offences. However,
although there are various efforts that are being implemented, the
rate of conviction is still generally very low compared to the number of
arrests that are being made. The efforts include;
 The Zimbabwe Anti-corruption Commission (ZACC),
 The Commercial Crime Court,
 The Commercial Crime Division (CCD),
 The Police Anticorruption Unit (PACU), etc.
The Strategies of overcome Commercial Crimes and White

Collar Crime.
Commercial Crime
Most of the commercial crimes are physical crimes. Unlawful entry is

one of those crimes and it can be prevented by installing alarms in
one’s property or hire private security. The use of armed respondents
it is also advised to be considered by business Organisations. These
armed respondents will respond to where the alarm has triggered and
they can arrest criminals while on act of committing a crime.
Robbery or armed robbery to be precisely is another crime that

businesses encounter mostly because there are many valuables things
can get their hands on like money, expensive machines and even the
personal belongings to the staff. This robbery can be prevented by
placing security guards at every entrance of the premise to control the
accesses into the property. The company can also install gates that will
require fingerprints of the staff to open, in that way criminals will have
no access to enter into the property.
1.6. Personality Traits of White Collar Criminals.
 Weak sense of ethics- An employee whose behaviour clearly

indicates a lack of respect for the basic standard of doing the
right thing.
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 Risk taking- people who act in ways that could lead them into
trouble like gambling, living beyond means.
 Refusal to take time off.
 Refusing promotion for fear of losing the opportunity to commit

fraud and for fear of detection.
 Coming in early or staying late.
 Employee lifestyle changes.
 Abuse of drugs and alcohol.
 Borrowing from co-workers.
 Creditors or debt collectors appearing at work place.
 Easily annoyed by reasonable questioning.
 Carrying unusually large sums of money.
1.7. Criminological Perspective of Commercial Crime.
Criminological theories attempt to explain the reasons why crime takes

place. A theory is a set of logically interconnected propositions
explaining how phenomena are related and from which a number of
hypotheses can be tested.
Theories should provide coherent explanations of the phenomena they

address, they should correspond with the relevant empirical facts, and
they should provide practical guidance for researchers looking for
further facts (Walsh & Hemmens, 2012). Within criminology, there is
little agreement about the nature of phenomena of study so there are
many theories.
One of Sutherland’s professional goals in writing about white collar

crime was to reform criminological theory. In the 1930s, when
Sutherland began working in this area, criminological theory was
dominated by the view that crime was concentrated in the lower social
classes and caused by the personal and social pathologies that
accompany poverty.
1.9.1 Theory of White Collar Crime
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Sutherland first penned the term White Collar Crime in 1940 in an

attempt to challenge what he considered to be in equalities and
classist nature of the attribution of criminal behavior – arguing that
actions of the well to do could also be classified as criminal. His
definition now thought restrictive and gives a platform of debate
states:
“White Collar Crime is/are crime(s) committed by a person of

respectability and high social status in the course of his occupation.
Sutherland’s work was based on the dealings of several large USA

corporations and distinguished individuals. His study attempted to do
basically 2 things:
1. To present evidence that members of upper social class commit

many crimes and that these crimes should be included within
the general theories of criminal behavior.
2. To present an hypothesis that explained all criminal behavior-

namely that of differential association: “that criminal behavior is
learned in association with those who define criminal behavior
favorably and & in isolation from those who define it unfavorably
and that a person in an appropriate situation engages in such
criminal behaviour, if & only if the weight of the favorable
definitions exceeds the unfavourable definitions. In giving further
evidence, Sutherland stated that social disorganization maybe
either of 2 ways i.e. (1) Anomie & (2) Conflict of standards etc.
1.9.2 Differential Association Theory
Propounded by Edwin Sutherland (1949). In keeping with his objective

of reforming criminological theory, Sutherland theorized that the same
general processes that cause other sorts of crime also cause white-
collar crime. He argued that individual involvement in white-collar
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crime comes about as a result of a process called differential

association. The theory of differential association postulates that
“criminal behavior is learned in association with those who define such
criminal behavior favorably and in isolation from those who define it
unfavorably, and that a person in an appropriate situation engages in
white-collar crime if, and only if, the weight of definitions favorable
exceeds the weight of the unfavorable definitions.”
Sutherland thought that attitudes and cultural orientations that define

illegal business behavior in favorable terms are pervasive throughout
the business world. Newcomers to the world of business are socialized
to accept these attitudes and orientations. They learn how to commit
certain types of offenses and how to rationalize these offenses so that,
in the offender’s mind, they are seen as acceptable, ordinary, and
necessary business practices. Thus, a white-collar criminal culture
permeates the world of business and is passed from one generation of
executives and employees to the next.
Sutherland had many examples of how young people new to the world
of business are socialized into the self-serving morality of the
marketplace by their bosses. For example, a manager of a shoe store
explained the rules of the game to a new employee this way
(Sutherland, 1983:243).
1.9.3 The Economic Model (Utility Theory) [Gary Becker 1968]
A standard model of decision making where individuals choose

between criminal activity and legal activity on the basis of expected
utility from those acts.
Individuals are assumed to be rational decision makers who engage in

either legal or illegal activities according to the expected utility from
each activity.
Among the factors that influence an individual’s decision to engage in

criminal activities are:
1. The expected gains from crime relative to earnings from legal work
2. The chance of being caught and convicted,
3. The extent of punishment, and
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4. The opportunities in legal activities.
1.9.4 Anomie Theory
The concept of anomie has a long history in sociology and criminology.

It was most famously proposed by Durkheim as an important factor in
suicide (Durkheim, 1951). For Durkheim, anomie referred to a sense
of normlessness or lack of regulation in society. With respect to
criminology, anomie theory was originally developed by Robert Merton.
For Merton, anomie referred not only to a sense of normlessness, as

Durkheim proposed, but to a distinctive feature of American society
(Merton, 1938). According to Merton, American society strongly
emphasizes the desirability of material success and individual
achievement. These goals are promoted as worthwhile—indeed,
essential—objectives that everyone should pursue. At the same time,
however, access to legitimate opportunities to achieve these goals is
not equally available to everyone, and less emphasis is placed on
achieving these objectives through legitimate means. The strong
emphasis placed on the goals of individual material success coupled
with the limited access to and emphasis on legitimate means of
achievement meant that goal-seeking behaviour is not well-regulated
or channelled in American society. Hence, people look for other ways
to get ahead and sometimes resort to criminal means. Merton used
anomie to explain why some societies have higher crime rates than
others and why crime is concentrated in the lower social classes
(Merton, 1938).
In a thoughtful effort to extend Merton’s anomie theory to corporate

deviance, Nikkos Passas argues that societies based on capitalistic
economic principles have cultural and structural contradictions that
promote widespread corporate deviance (Passas, 1990). Passas argues
that a cultural emphasis on wealth and material success permeates all
levels of the class structure and shapes both individual and corporate
behaviour. Although business corporations can have multiple goals, in
capitalist economies the dominant goal is always profit maximization
(Vaughan, 1983). Corporations compete with one another to maximize
profits in a game that is never ending. There is no obvious stopping
point at which enough is enough. Weak competitors may fall by the
wayside, but new ones emerge to take their place. So, even
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companies that are leaders in their industries must always worry about
potential competition. Hence, because of the competitive structure of
capitalist economies, corporations are continually under pressure to do
better. Coupled with the cultural themes of success and endless
striving are a cultural uncertainty and confusion about where the line
between acceptable and unacceptable business behaviour should be
drawn. In this anomic environment, there is strong and constant
pressure to engage in corporate deviance to achieve profit goals, and
corporations often succumb to this pressure. In Passas’s view,
corporate crime and deviance are the unavoidable by-products of
capitalistic economies. Edward Gross takes a similar view of corporate
deviance, but he focuses more on the culture and structure of
organizations than on that of society as a whole (Gross, 1978). Gross
argues that organizations are inherently criminogenic, because they
are goal-directed entities, and their performance is evaluated
according to their effectiveness in achieving their goals. Hence, they
are continually under pressure to achieve. Further, organizations
always confront competition and uncertainty in
working toward their goals. The emphasis on performance combined
with competition and uncertainty creates pressure to break rules and
to achieve goals at all costs.
Gross hypothesizes that variation in organizational crime results from

several sources. First, the degree of accountability of an organization
or an organizational subunit is directly related to the likelihood of rule
breaking. Organizations that are held accountable to specific criteria by
which success in goal attainment can be judged are under greater
pressure to perform than organizations whose success in goal
attainment is not as strictly judged. Second, pressure to engage in
organizational crime is directly related to the objectivity of
performance measures.
1.9.5 Strain Theory
In general, strain theory focuses on the way stresses and strains

contribute to offending. The source of strain varies across types of
strain theory. Some theories point to the social and economic
structures as a source of strain, others point to the individual and
others point to the organisation. In terms of white collar crime, three
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types of strain theories warrant discussion, namely classical strain

theory, institutional anomie theory and general anomie theory.
General strain theory by Robert Agnew, used psychological approach

to explain how crime is an adaptation to stress and frustration. Agnew
highlighted three sources of strain that could lead to crime. These are
the failure achieve positively valued goals, the removal or unexpected
removal of positively valued stimuli and confronting or expecting to
confront negative stimuli. Agnew argued that stresses leads to crime if
the stress leads to negative effective status, such as anger.
First, the failure to achieve positively valued goals could lead to strain.
In terms of white collar crime, not being promoted, given pay raises or
paid fairly could result in offending. White collar workers direct a great
deal of effort to meet organisational goals. If the organisation meet
meets its goals but the worker is not rewarded for his or her efforts in
working towards those goals, strains occur and this strain could result
in offending.
Second, the removal or expected removal of positively valued stimuli

results in strain because individuals must confront loosing something
they find valuable. With regard to white collar crime individuals who
have invested so much in their careers and moved up organisational
ladders, might face stress in maintaining that status. Donald Cressey’s
(1953), classic study of embezzling found that embezzlers engage in
offending because they developed a non-sharable financial problem.
Third, confronting or expecting to confront negative stimuli refers to

instances where individuals confront negative events in their lives.
Those who experience unpleasant work setting, for example would be
more prone to commit misconduct from this perspective.
1.9.6 Control Theory
Another avenue of approach toward explaining white-collar crime takes

control theory as its starting point (Hirschi, 1969). There are several
variants of control theory, but all share in common the idea that
deviance is natural and must be controlled by external social forces or
internal predispositions. Travis Hirschi’s social bond theory is the most
well-known version of control theory. Social bond theory starts with
the premise that delinquent acts are more likely to occur when an
12
individual’s bond to society is weak or broken. The social bond is

composed of four interrelated elements: attachment to others,
commitment to conventional lines of action, involvement in
conventional activities, and belief in society’s common value system.
To the extent that these elements are strong, they restrain individuals
from involvement in criminal behavior. But if they are weak, then the
individual is free to engage in crime. Although control theory is most
often applied in the context of juvenile delinquency or ordinary street
offending, it can also be used to explain white-collar crime by
corporate executives. To do so requires that the elements of the social
bond be reconceptualized within the context of the corporation and its
executives. It is the strength of the executive’s bond to the
corporation, as opposed to society in general, that regulates
involvement in executive white-collar crime. James R. Lasley proposes
four theorems regarding executive white-collar crime, which are
straightforward translations of Hirschi’s basic propositions regarding
juvenile delinquency and the social bond (Lasley, 1988). First, the
more strongly an executive is attached to other executives, coworkers,
and the corporation, the less likely the executive is to commit white-
collar crime. Second, the more strongly an executive is committed to
corporate lines of action, the lower the frequency of executive white-
collar crime. Third, the more strongly an executive is involved in
corporate activity, the lower the frequency of white-collar offending.
Fourth, the more strongly an executive believes in the rules of the
corporation, the lower the frequency of white-collar offending.
1.9.7 Rational Choice Theory
Another theoretical perspective that has been applied to white-collar

crime is rational choice theory. Rational choice theory assumes that all
actors are self-interested and make decisions about whether to engage
in criminal or conventional behavior according to an assessment of
costs and benefits. In simplified terms, the theory posits that rational
actors will choose to engage in crime rather than non-crime when the
perceived net benefits of crime (i.e., benefits minus costs) are larger
than the perceived net benefits of non-crime. Both benefits and costs
have subjective and objective dimensions.
A subjective cost of crime might be feelings of guilt or fear of

apprehension, while a subjective benefit of crime would be the thrill
13
and excitement of getting away with something illegal. An objective

cost of crime would be formal punishment by the criminal justice
system, while an objective benefit would be the gains made from the
illegal act.
Hence, rational choice theory is aimed at individual decision makers

rather than the corporation as a whole. According to their theory, the
individual’s decision to commit a corporate crime or violate a
regulatory rule involves a series of factors. To calculate the potential
costs of corporate crime, actors subjectively estimate the certainty and
severity of formal legal sanctions, the certainty and severity of
informal sanctions, and the certainty and importance of loss of self-
respect. Actors also consider the benefits of corporate crime, which
include the perceived benefits of noncompliance (i.e., higher profits,
greater market share, or some other organizationally relevant goal)
and the perceived cost of rule compliance (i.e., expenses associated
with complying with regulatory standards).
Rational choice is the one most compatible with our opportunity

perspective. It explicitly recognizes opportunity as an important cause
and necessary ingredient of crime. It suggests that in order to
understand patterns in white-collar crime we need to pay attention to
how changes in the organization and functioning of the legitimate
business world can affect opportunities for white-collar crime. New
opportunities for fraud and embezzlement have emerged over the past
few decades because of the expansion of government programs, the
revolution in financial services, the growth of communications
technology, and the rise of the global economy.
1.10 ZIMBABWEAN LAW
Zimbabwe has a hybrid or plural, legal system in the sense that the
law currently in force was adopted from foreign jurisdictions and
imposed into the country by settlers during the colonial era.
Zimbabwe’s law after several years of independence still exposes
residual traits of the process of transplantation of historical
disempowerment and colonial takeover.
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Zimbabwe’s Legal system consists of the Common law (non statutory

or unwritten Anglo Roman Dutch Law), Legislation, Case Law
(Precedent) and Customary Law. With the exception of Criminal Law,
which has recently been reformed and codified, Zimbabwe’s law is not
codified. The Constitution of Zimbabwe is the Supreme Law of the
country and it is the parent act of any other legislation.
1.10.1 SOURCES OF ZIMBABWEAN LAW
With the exception of Criminal Law, Zimbabwe’s law is mainly

uncodified. There is no one single source of law in Zimbabwe, the law
is derived from various sources and has various sources and has
various origins. The Criminal Law of Zimbabwe was recently codified
and the Criminal Law [Codification and Reform] Act came into effect on
the 1st of July 2006. Even though the criminal law has recently been
codified it is still scattered and can be found in other statutes apart
from the code. As it is, the code is still an experiment and its
constitutionality is yet to be tested.
The following are sources of Zimbabwean law:
 Legislation
 Precedent / Case law / Court Decisions
 Customary Law
 Common Law
 Authoritative texts
The Legislature (Bicameral System)
Legislation refers to the law validly enacted by the legislative authority

of Zimbabwe and assented to by the President of Zimbabwe. In
Zimbabwe the legislative authority of Zimbabwe vests in the President
and parliament of Zimbabwe which is the Primary Legislation states as
follows:
a. Legislative Authority
15
The Legislative authority of Zimbabwe shall vest in the Legislative

which shall consist of the President and Parliament. The provisions of
subsection (1) shall not be construed as preventing the legislature
from conferring legislative functions and any person or authority.
The Legislature of Zimbabwe can confer powers on any authority to

create binding laws. Currently the Legislature of Zimbabwe is a
bicameral system consisting of a Lower House (Parliament) and an
upper House (Senate). Legislation brought through parliament has to
be scrutinized by the Senate before it goes for assent to the executive
President. The senate was recently ushered in through Constitutional
Amendment Number 17 of 2005. It appears that currently the purpose
is to slow down undesirable proposed legislation or to frustrate it if it
comes from members of the opposition. At the same time it expedites
legislation brought in by members of the ruling party.
The method of passing legislation is entrenched in Section 511 of the

Constitution. All legislation in Zimbabwe is styled Acts of Parliament or
Statutes. Other authorities such as the President, acting unilaterally,
and Ministries can pass legislation known as Statutory Instruments, or
Subsidiary Legislation. Subsidiary or Subordinate Legislation consists
of the following:
 Regulations made by a Minister for purposes specified in the

Enabling Act of Parliament.
 Bye-Laws created by specified local authorities such as Urban or

Rural Councils, acting under powers given to them by the
relevant Acts of Parliament.
 Proclamations issued by the President for purposes such as

dissolving Parliament.
 Rules of the superior Courts to facilitate procedure and their

operations.
 Regulations made by the President under the Presidential Powers

Temporary Measures Act.
Case Law / Precedent
16
Precedent refers to past decisions of the superior courts. Precedents

establish the legal position of cases tried in the courts and establish
the reasoning for decisions made by the judges in each particular
case. Conversely, precedents therefore guide the courts in making
future decisions in similar cases brought before them. Zimbabwe relied
on precedents of South African origin or those of any jurisdiction in
which English law and Roman-Dutch law is applied and the precedents
of Rhodesia.
The maxim Stare Decisi at non queta movere best sums up the use of

case law in Zimbabwe. The maxim means to stand by old decisions
and not disturb settled points. Supreme Court decisions in Zimbabwe
are binding on all interior courts. High court ruling also binds the lower
courts such as the Magistrates courts.
The advantage of Precedents is that they ensure informality and

consistency in the application of the law and they maintain certainty
and equality of the law in similar circumstances.
Customary Law
The customary law of Zimbabwe is generally Unwritten.
Customary law refers to the fixed customs and practices of the tribes
of Zimbabwe which were in practice since time immemorial. The
customs must be certain, reasonable and must had attained the
recognition of formal law. For example the criminalization of incest, in
the sexual offences Act and the Criminal Law (Codification and
Reform) Act is the recognition of customary law which prohibits incest
or sexual relationship with certain degrees of blood affinity.
The constitution entrenches the recognition of African Customary Law.

Section 89 of the Constitution of Zimbabwe in imposing the law to be
administered, sets up African customary law as part of the law to be
administered. Other Legislation, such as the:
 Customary Marriages Act.
 Administration of Deceased Estates Act.
 Customary Law and Local Courts Act.
17
The acts also establish the application of Customary Law in certain

respect. The Customary Law of Zimbabwe is limited in scope in its
application. It has no criminal Jurisdiction whatsoever and it governs
some areas of Marriage, Inheritance and Guardianship only.
Common Law
Common law of Zimbabwe refers to the unwritten law or non-

statutory law. Common law excludes the African customary Law. The
common law of Zimbabwe is primarily the Roman-Dutch Law as
applied at the Cape of Good Hope on the 10th of June 1891 as per the
provisions of Section 89 of the Constitution of Zimbabwe. The
Common Law was transplanted from the Cape and imposed to
Zimbabwe. However, the common law at the Cape in 1891 had been
heavily influenced by English Law, hence the common law of
Zimbabwe must be said to be Anglo-Roman-Dutch Law.
A recent development in Zimbabwe ousts the application of Common

Law. The recent Codification of Zimbabwe’s Criminal Law through the
Criminal Law (Codification and Reform) Act jeopardizes the application
of Common Criminal law Section 3 of the Act states unequivocally that
Roman-Dutch Criminal Law no longer to apply.
Authoritative Texts
One cannot safely assert that authoritative text from acclaimed legal
authors form part of Zimbabwe’s law. However textbooks on law have
persuasive authority upon which reliance can be had in making judicial
decisions. The few authoritative legal authors in Zimbabwe rely on old
Roman Dutch writers. They mainly write commentaries and guides to
the law of Zimbabwe. Professor Geoff Feltoe has several Guides to the
Laws of Zimbabwe which are widely used and referred to in litigation.
His comments and assertions form persuasive grounds upon which
cases can be decided.
Constitution of Zimbabwe
The constitution of Zimbabwe is the Supreme law of the land and any
other law which is inconsistent with it is deemed void to the extent of
that inconsistence. Therefore Zimbabwe has Constitutional Supremacy
instead of parliamentary Supremacy. The current constitution of
18
Zimbabwe is the result of a settlement agreement done at Lancaster

House in England in the year 1979. It sets out the State Structure,
the Bill of Rights the Judiciary the Legislature and other administrative
organs such as the public service commission. Currently there is an
ongoing struggle being waged by Zimbabwean citizens who are
agitating and pressing for a series of seventeen amendments, all of
which cannot be said to be in the interest of Zimbabweans, but instead
in the interest of the current ruling party. The constitution is the
parent Act of every other Legislation. Therefore all Acts of parliament
subordinate to it must be intra vires the constitution or within the
confines of constitutionality.
1.11 The Role of Courts in Dealing with Commercial Crime
It goes without saying that the prevention and control of crime are two
of the primary objectives and functions of the criminal justice system.
Like other types of offenders, white-collar criminals can be pursued
through the process of criminal prosecution. The criminal law is used
to punish violators and to convey the message that the behavior in
question is harmful, morally repugnant, and not to be tolerated. Legal
philosophers long have argued that law and punishment are part of the
social contract in which individuals surrender a degree of freedom in
exchange for protection against harm and the enjoyment of peace and
safety (Beccaria, 1983).
From this perspective, when individuals violate the law, they are acting
against the common good or common interest, and society has both a
need and a responsibility to punish them. Punishment for legal
transgressions is necessary to preserve and protect society, but it will
operate effectively only within the context of a “reasoned” system of
justice, that is, a system that is fair and not subject to abuse
(Bentham, 1948).
Courts have been constitutionally established to address issues of

disputes, management of affairs of government and that of individual
towards another individual or organisations towards its neighbour so
that there is peaceful co-existence of the parties. Courts’ role even
extends extra territorially where there are multi-lateral and bilateral
agreements between and among member countries. People resort to
courts where there is need for recourse in order to address the
19
convoluted state of affairs. The courts will assist through both criminal
means and civil means. The criminal means empowers the police to
arrest an accused and bring him to court for prosecution whereby he
may be given sentence of imprisonment or payment of fine. The civil
means empowers the courts to order for redress of the plaintiff
through specific performance; rescission; payment of damages
(restitution) and even civil imprisonment.
ACTIVITY 1.1
1. Define Commercial Crime.

2. Identify offences that form up Commercial Crime.
3. Identify and explain any efforts that are in place to curb Commercial
Crime.
4. State and explain any sources of Zimbabwean Law in relation to
commercial crime.
5. Identify the role of courts in Commercial Crime.
6. Analyse the theoretical perspective in Commercial Crime.
20
UNIT TWO
PRIMARY COMMERCIAL CRIMES

2.0 INTRODUCTION
The chapter will cover the primary Commercial Crimes namely, fraud
and fraud management, Theft, counterfeit currency, Credit and Debit
card offences, Conspiracy and Money laundering. It will also spell the
legal way of dealing with these crimes.
OBJECTIVES
1. Define and explain Fraud and fraud management techniques.
2. Explain Theft and its essential elements.
3. Describe Counterfeit currency.
4. Descried and explain Credit and Debit card offences
5. Explain Internet based frauds.
6. Describe Conspiracy.
7. Describe and explain Money laundering.
21
2.1 FRAUD AND FRAUD MANAGEMENT
Fraud Defined
Criminologists, just like their legal counterparts have found in

constantly challenging to define in its purest form and sample the
constituents (Singleton; 2006) because of its ever-changing colour
modus operandi and texture divergence views. Fraud situates itself as
a generic term which embraces all multifarious means in which human
ingenuity can device, that are resorted by one individual to get
advantage over another by false pretences (Michigan criminal law
code). The roots of fraud historically could be traced to the Latin word
‘fraus’ which to Laventi (2001), carry a wide range of meaning
clustered around assertion harm wrong doing and deceit.
The united stated of fraud examiners (1999), identifies fraud as “the

fraudulent conversion obtainment of money or property of false
pretences; included are larcenies by bailee and bad cheque”. The
defunct Zimbabwe common law defined fraud as “unlawful making
with intend to defraud a misrepresentation which causes actual
prejudice or which is potential prejudicial to another”. In this instance
misrepresentation manifests itself in words, conduct or failure to
disclose.
The Zimbabwe Codification and Reform Act chapter 9:23, does not
depart from this definition when it defines fraud as:
(a) Making a misrepresentation intending to deceive another person

or realising that there is real risk or possibility of deceiving another
person and
(b) Intending to cause another person to act upon the

misrepresentation to his or her prejudice or realising that there is real
risk or possibility that another person may act upon the
misrepresentation.
2.2 Characteristics of Fraud
Fraud encompasses an array of irregularities and illegal acts

characterised by intentional deception. It can be perpetrated for the
22
benefit of or to the detriment of the organisation and by persons

outside as well as inside the organisation.
Fraud designed to benefit the organisation generally produces such

benefits by exploiting an unfair or dishonest advantage that also may
deceive an outside party. Perpetrators of such frauds usually benefit
indirectly, since personal benefit usually accrues when the organisation
is aided by the act.
Fraud that benefits the organisation:
a. Improper payment such illegal political contributions, as bribes,

kickbacks and pay offs to government official, intermediaries of
government official, customers.
b. Intentional, improper transfer pricing (e.g. valuation of goods

exchanged between related entities.) by purposely structuring
pricing techniques improperly; management can improve the
operating results of an organisation involved in the transaction to
the detriment of the other organisation.
c. Intentional, improper related party transaction in which one party

receives some benefits not obtainable in an arm’s length
transaction.
d. Intentional failure to record or disclose significant information to

improve the financial picture of the organisation to outside parties.
e. Prohibited business activities such as those that violate government

statutes, rules, regulations or contracts.
Fraud perpetrated to the detriment of the organisation:

generally is for the direct or indirect benefit of an employee, outside
individual or another firm. Some examples are;
a. Acceptance of bribes or kickbacks
b. Diversion to an employee or outsider of a potential profitable

transaction that would normally generate profits for the
organisation.
23
c. Embezzlement, as typified by the misappropriation of money or

property, and falsification of financial records to cover up the
act, thus making detection difficult.
d. Intentional concealment or misrepresentation of events or data.
e. Claims submitted for services or goods not actually provided to

the organisation.
2.3 Techniques of Fraudsters.
Fraudster employee deceitful means through technology and mass

communication and relies on ignorance and greed of the victims.
Modern technology has increased fraudsters’ ability to further conceal
and disguise these crimes. Of note is that the likely hood of fraudster
can particular be computer related to be caught as minimum.
2.4 Motivators of Fraud
1. Living beyond means.
2. Overwhelming desire for personal gain.
3. High personal debt.
4. Close association with customers.
5. Pay not commensurate with job.
6. Wheeler-dealer.
7. Strong challenge to beat system.
8. Excessive gambling.
9. Family/peer pressure.
2.5 Types of Fraudsters.
Fraudsters usually fall into one of three categories:
1. Pre-planned fraudsters, who start out from the beginning

intending to commit fraud. These can be short-term players, like
many who use stolen credit cards or false social security numbers;
24
or can be longer-term, like bankruptcy fraudsters and those who

execute complex money laundering schemes.
2. Intermediate fraudsters, who start off honest but turn to fraud

when times get hard or when life events, such as irritation at being
passed over for promotion or the need to pay for care for a family
member, change the normal mode.
3. Slippery-slope fraudsters, who simply carry on trading even

when, objectively, they are not in a position to pay their debts. This
can apply to ordinary traders or to major business people.
2.6 Theories of Fraud.
a. The Fraud Triangle
A common model that brings together a number of these aspects is

the Fraud Triangle. This model is built on the premise that fraud is
likely to result from a combination of three factors: motivation,
opportunity and rationalisation. The fraud triangle theory has three
factors each represented by the leg of a triangle namely pressure (a
perception of non-sharable financial need), the opportunity (a
perceived chance to secretly resolve the financial need) and
rationalization (the ability to justify the illegal conduct).
Propounded by Donald Cressey (1919-1987). According to Cressey,

most people who commit fraud against their employers are not career
criminals. The vast majority are trusted employees who have no
criminal history and who do not consider themselves as law breakers.
The best and widely accepted model for explaining why good people
commit fraud is the fraud triangle.
25
Pressure
The employee has a non-sharable financial need which he is unable

to solve through legitimate means, so he begins to consider
committing an illegal act. The identification of pressures will vary
with the primary classification of fraud. Pressure is associated with
financial reasons. For example, pressures are evident in financial
reporting in order to meet investors’ and shareholders’ expectations
of more income and profits, leading to asset misappropriations, a
primary fraud classification. Issues that may also put pressure on
individuals may include the urge for better lifestyle, settling debts,
peer pressure, extra marital affairs. Examples include the ENG saga,
the collapse of banks in Zimbabwe.
Examples of pressures that commonly lead to fraud include;
 Inability to pay one’s bills
 Drug or gambling addiction
 Need to sustain earnings to build investor confidence
 Need to meet productivity targets at work
26
 Desire for status symbols such as bigger house, nicer cars etc.
Opportunity
Opportunity is an individual’s ability to commit a fraud scenario and

his/her related experiences in committing the scenario. Opportunity
correlates to one’s experience in committing the fraud scenario. The
higher the opportunity, the higher the likelihood of committing fraud.
These are the circumstances which allow an employee to carry out the
fraudulent activities. The person must see some way in which he can
abuse his position of trust to solve his financial problem. Employees
have access to assets, books of accounts, people and computer
systems and this access presents them with opportunities to commit
fraud.
Rationalisation
This is a frame of mind that allows employees to intentionally

misappropriate cash or other organisational assets and justify their
dishonest actions. Because the fraudster does not see himself as a
criminal, he must justify the crime to himself in a way that makes it an
acceptable or justifiable act. Common rationalisations are;
 I was only borrowing money
 I was entitled to the money
 I had to steal to provide for my family
 I was underpaid/ my employer had cheated me
 Necessary– especially when done for the business
 Harmless – because the victim is large enough to absorb the impact
 Justified – because ‘the victim deserved it’ or ‘because I was

mistreated’.
Premise of the Fraud Triangle
The body of knowledge surrounding the fraud triangle is critical to a

commercial crime investigator. The triangle as a whole is critical in
planning phase for the recognition of the manifestation of fraud within
the core business system. The designing of the methodology for the
27
data mining, audit procedures and evidence consideration relies on the

fraud opportunity.
Comer (2003), developed four theories of fraud which are important

for commercial crime investigator to understand in order to determine
the motives of the fraudster and possibly prevent fraud at workplace.
b. The Fraud Diamond Theory
The Fraud Diamond Theory was first presented by Wolfe and

Hermanson, in 2004. It is viewed as an expanded version of the
Fraud Triangle Theory. In this theory, an element named capability
has been added to the three initial fraud components of the Fraud
Triangle Theory. Wolfe and Hermanson (2004), argued that although
perceived pressure might coexist with an opportunity and a
rationalization, it is unlikely for fraud to take place unless the fourth
element (i.e., capability) is also present. In other words, the potential
perpetrator must have the skills and ability to commit fraud.
Pressure
Opportunity Rationalisation
Capabilitycc
Wolfe and Hermanson (2004), maintained that opportunity opens the

doorway to fraud, and incentive (i.e. pressure) and rationalization lead
a person toward the door. However, capability enables the person to
28
recognize the open doorway as an opportunity and to take advantage

of it by walking through repeatedly.
Capability
This is a situation of having the necessary traits or skills and abilities
for the person to commit fraud. It is where the fraudster recognized
the particular fraud opportunity and ability to turn it into reality.
Position, intelligence, ego, coercion, deceit, and stress, are the
supporting elements of capability (Wolfe and Hermanson 2004).
Mackevicius and Giriunas (2013), not every person who possessed
motivation, opportunities, and realization may commit fraud due to the
lack of the capability to carry it out or to conceal it. Albrecht, Williams,
and Wernz (1995) opine that this element is of particular importance
when it concerns a large-scale or long-term fraud. Furthermore,
Albrecht et al. (1995) believe that only the person who has an
extremely high capacity will be able to understand the existing internal
control, to identify its weaknesses and to use them in planning the
implementation of fraud. Similarly, Wilson (2004) discloses that
rationalization and capability are all inter-related, and the strength of
each element influences the others.
Position/Function
The initial factor to enable the fraudster to have the capability to
commit fraud is the function or position holding in an organization.
Wolfe and Hermanson (2004), state that position and role owned by
the employee may perfect his way to breach the organizational trust.
Intelligence/Creativity and Ego
The fraudster is someone who understands and capable of exploiting

internal control weaknesses and using the position; function or
authorized access to the greatest advantage (Abdullahi and Mansor,
2015b). Intelligent, experienced, creative people with a solid grasp of
controls and vulnerabilities, commit many of today’s largest frauds.
This knowledge is used to influence the individual's concern for
authorize access to systems or assets (Wolfe and Hermanson, 2004).
Coercion, Deceit and Stress
A successful fraudster can coerce others to commit or conceal fraud

Rudewicz (2011). A person with a very persuasive personality may be
29
able to convince others to go along with a fraud or to simply look the

other way. In addition it is noted that, a common personality type
among fraudsters is the "bully," who "makes unusual and significant
demands of those who work for him or her, cultivates fear rather than
respect and consequently avoids being subject to the same rules and
procedures as others" (Wolfe and Hermanson 2004:41).
Many financial reporting frauds are committed by subordinates

reacting to an edict from above to "make your numbers at all costs, or
else."(Wolfe and Hermanson 2004:40). According to Wolfe and
Hermanson (2004) and Rudewicz, (2011) a successful fraudster must
also lie effectively and consistently. To avoid detection, the fraudster
must look at the auditors, investors, and others right in the eye and
convincingly tell them lies. Thus, the fraudster should also possess the
skill to keep track of the lies, so that the overall story remains
consistent. In the Phai-Mor fraud, the auditors claimed that Phar-Mor
had formed a team of fraudsters made-up of executives and former
auditors whose function is to ensure they are working continuously to
hide evidence of frauds.
Among other, the auditors claimed that the fraud team not only lying
but also forged documents and 'scrubbed' everything the auditors saw
to hide any indications of malfeasance (Cottrell and Glover, 1997 in
Wolfe and Hermanson 2004). Another strong characteristic of
fraudsters is their ability to handle stress (Wolfe and Hermanson,
2004). Committing frauds require and managing the frauds over a long
period of time and can be stressful. There is the risk of detection, with
its personal ramifications, as well as the constant need to conceal the
fraud on a daily basis. The individual must be able to control their
stress, as committing the fraudulent act and keeping it concealed can
be extremely stressful (Rudewicz, 2011).
30
c. Theory of Differential Opportunity
Definition of opportunity
This is the availability of a chance, an opening that one can use to

commit a crime. This theory was developed by Richard Cloward and
Lloyd Ohlin in Delinquency and Opportunity (1960). The theory of
opportunity states that there is always an opportunity to commit fraud
available to anyone if not everyone. In general organisations are
protected to a larger extent by the fact that most people are honest
rather than the sophistication of their control system.
Therefore it is always important that the organisation is alert as to

where the danger is coming from, i.e. their employer, their supplier,
3rd parties and the state.
Important elements of the theory
1. An individual occupies position in both legitimate and illegitimate

opportunity structures.
2. Relative availability of legitimate opportunity affects the resolution

of an individual’s adjustments to problems.
3. Faced with limitations on legitimate avenue of access to goals and

unable to revise one’s aspirations downward, they experience
frustrations, resulting in the exploration of non-conformist
alternatives.
4. Solving adjustment problems thus depends upon relative access to

these systems. If in a given social structure, a person has little or
no access to illegal or criminal means, they would not be expected
to adopt criminal means to solve his problems
However the likelihood and the severity of the opportunity to

commit fraud depends on various factors which are;
1. ACCESS – accessibility of the perpetrator to accounts, assets,

premises and computer systems.
Employees with access to key valuables of an organisation must be

monitored as they may abuse these privileges of having access to
company assets to commit fraud.
31
Access levels vary from physical such as keys to offices and

electronic like passwords to computers and programs
2. SKILL – a skill is required to identify such an opportunity exist

and how to use it
Highly skilled employees such as programmers and other experts

are a threat. They may use their expertise to commit fraud. Eg in
financial institutions; programmers cannot be accountants as this
would present an opportunity for them to manipulate the system or
figures in financial statements thereby committing fraud.
3. TIME – the availability of sufficient time to plan and execute the

fraud.
Employees who have opportunity and have ample time at their

disposal easily commit fraud. For instance some employees prefer
to continue working after hours when other employees and
management have knocked off duty, not for the love of the job but
to commit fraud undetected in the absence of other employees and
supervisors.
4. POSITION
Those in position of authority may also abuse their authority

granted by their positions to commit fraud. They may authorise
transactions which are non-existence in order to commit fraud or
outrageous payments.
E.g. the Air Zimbabwe Insurance Fraud, where the company’s

secretary Grace Pfumbidzayi allegedly authorised payment of
excessive insurance cover to the tune of 10 million dollars to
Navistar Insurance Brokers over a period of four years.
Most corporate fraud occurs through breach of trust by employees

and simple access system. The main failure is the recruitment and
control system. The elimination of risk at the point of entry reduces
the likelihood of fraud occurring.
Sutherland stated nine basic tenets of his differential association

theory which are here condensed to four as follows;
32
1. Criminal behaviour is learned in interaction with other persons in a

process of communication.
2. That learning takes place primarily in intimate personal groups and

includes not only the techniques of committing crime but the
motives, rationalizations, and attitudes which accompany crime.
3. Differential associations may vary in frequency, duration, priority,

and intensity, and a person becomes delinquent because of an
excess of definitions favorable to violation of law over definitions
unfavorable to violation of law.
4. The learning process involves the same mechanisms whether a

person is learning criminality or conformity.
Mitigation/Remedy
1. Background checks should be thoroughly made on recruitment of

employees to avoid employing criminals
2. job rotation reduces the time spent on a specific work station

thereby also reducing the opportunity to commit fraud
3. Effective and efficient Fraud policy in place to be known by all

employees.
4. Proper segregation of duties to close all gaps of opportunity to

commit fraud.
5. A timely detection of fraud incidents will go a long way in containing

the losses and improving the chances of recovery. It is high time for
organisations to ensure that their fraud risk management
strategies are revised to ensure that there are in line with current
fraud trends and adequate to take care of future growth besides
increasing ways of detecting fraud proactively.
33
ACTIVITY 2.1
1. The theory of differential opportunity fully explains the causes of fraud

in an organisation. Explain (20)
2. Collusion is the commercial crime investigator’s worst enemy. Discuss.

(20)
Theory of Collusion
Collusion is the commercial crime investigator’s worst enemy. The best

defense is to know where the key dangers are.
Assumptions
The theory of collusion assumes that at the top echelon of the

organisation, there is minimum collusion but there is big loss to the
organisation. Those at the top may act alone but it involves a lot of
money. There is involvement of a lot of skill from perpetrators. In the
lower echelon there is minimum skill but high collusion resulting in
minimum losses. It is not a danger zone. At times fraud becomes
institutionalised.
Generally what it means is that serious fraud cases are perpetrated by

individuals within the senior management position. Though top
management is a minority, the fraud is costly for the organisation and
harmful even to third parties. Knowledge of this will assist the Forensic
accountant to narrow his focus. It will also show the instruments or
gadgets used in the commission of crime and narrowing on particular
language and techniques.
34
Theory of Concealment
It assumes that fraud felon conceal their illegal practices through

various means. They only commit if they feel confident that they will
be able to conceal it. If it works, they will do it again and again. Most
fraudsters conceal their crime for reasons of self-preservation so that
they are able to strike again at a later stage. The two principle
methods of concealment are manipulation and manipulation of records
and misrepresentation of assets e.g. accounting manipulation where
fraudsters remove one box and manipulate account records. The key
points to note are:
 Manipulation- making books agree to stock
 Misrepresentation- making stock agree to books e.g. the Enron

case;
Theory of Deviation
It is a derivation of the sociological school, which posits that fraud is as

a result of deviant behaviour. It assumes that fraudsters have limited
opportunities in life. So limitations such as internal audits and spot
checks often results in plausible deviation from acceptable pattern of
behaviour and deviation from norms is the first sign to watch for. It is
important therefore to investigators to remember that any changes to
35
a person’s normal behaviour pattern could be early warning (red

flags). In terms of this theory the fraudster must have the knowledge,
motive and opportunity.
It should be noted further that the theory accedes that any

organisation has set down codes of conduct and any person who
breaches the rules is accountable to his action. Most corporate fraud is
committed by insiders in collusion with outsiders.
Reasons for deviation from standard
 The thought of easy money
 Ease of perpetration
 Very low detection and recovery rate
 Low prosecution rate
ACTIVITY 2.2
Explain the major differences between public and private sector fraud. Cite
relevant and contemporary examples to add value to your write-up. (25)
1.
2.7 TYPES OF FRAUD
Fraud cases can be categorized in terms of sectors that is public sector

and private sector, corporate and non-corporate. Private sector fraud
entails all fraud related crimes committed in private and public
companies and financial institutions whereas public sector fraud relates
to those crimes committed in Government departments, quasi-
governmental organisations and corporate bodies whose major
stakeholders are the ordinary citizens.
a. Private Sector Fraud
The following could be categorised as private sector fraud:
36
 Bankruptcy fraud
 Securities fraud
 Money laundering
 Computer fraud
 Bank fraud
 Insurance fraud
b. Public sector fraud
This encompasses the following:
 Tax evasion
 Under invoicing
 Embezzlement of public funds
 Payment of non-existing services and goods
 Tender system and crimes associated with it
 Computer fraud
 Money laundering
Fraud can also be categorised under the broad spectrum of corporate

fraud which can further be delineated into various situations:
TYPE OF OBJECTIVE LOSERS

FRAUD
Management Falsify company results. Overstating Shareholders/
of company attributes e.g. Creditors/Fisc
performance. Falsify information to us
directors and shareholders e.g.
omitting to acquit CD 14 to the
Reserve Bank
37
Fraudulent Obtain funds to continue trading. Shareholders/

Trading Misrepresenting either the books or Creditors/Fisc
assets of organisation with the us
objective of continuing trading when
the company is technically insolvent.
Inside Dealing Take advantage of price sensitive Shareholders/
and Market information in securities market Creditors/Fisc
Manipulation us
Long term Obtain assets without payment. Assets owners
fraud Ownership is transferred without the
knowledge of the owner.
Contract fraud Misrepresentation Contractee
c. Bank Fraud
Skalahetal (2001), managed to identify two species of bank frauds;

those that are committed by insiders and those committed outside
fraud felons. Those emanating from within include; rogue traders,
wire fraud, forged documents, and theft of identity, discounting fraud,
fraudulent insider loans, cheque fraud and accounting fraud. Those
that are exogenous encompasses; forgery and altered cheques,
cheque fraud, booster cheques, stolen payment card, application or
skimming of information, fraudulent loan applicant, impersonation of
identity, cheque kitting, use of real time gross system and advance
fee fraud and money laundering.
Fraud from Within the Bank
i. Rogue traders:
It is argued that a rogue trader is highly placed trader who

normally is authorised to invest sizeable funds on behalf of the
bank. The trader secretly makes progressively more aggressive
and risky investments using the bank’s money, which when one
goes bad, he engages in further market speculation in the hope
of a quick profit which would hide or cover losses. Unfortunately
when one investment loss is piled on to another, the costs of the
bank reach millions of dollars.
ii. Wire fraud:
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It makes use of the wire transfer network such as SWIFT or the

RTGs interbank funds transfer system. This when activated in
difficult or impossible to reverse. Insiders may attempt to use
fraudulently forged documents which claim to request a
depositor’s money wired to another bank, often offshore
account.
iii. Forged or fraudulent cheques:
Occurs where an employee issues a cheque without proper

authorization. Criminals may steal a cheque, endorse it and
present it for payment at a retail location. Forged documents are
often used to conceal the thefts. Cheque fraud may be due to
counterfeiting through desktop publishing facility, which may be
copied in order to create duplicate on actual documents. The
technique of altering information may be done through use of
chemical alterations by use of acetone, brake fluid, bleach to
remove or modify handwriting (Skalahetal; 2005).
iv. Accounting fraud:
In order to hide serious financial problems, some banks have

been known to inflate the worth of the organisation’s assets or
state a profit when it is operating at a loss. These tampered
records are then used to seek investments in the organisation’s
securities, bonds in an attempt to obtain more funds to delay
collapse of an unprofitable or mismanaged organisation. This
could be used to conceal theft in the company.
Fraud from Outside the Bank
i. Cheque fraud:
Some fraudsters obtain access to facilities handling large

amounts of cheques, such as mailrooms, post offices of tax
authorities or a corporate payroll or social veteran’s benefit
(issuing many cheques) or intercepting cheques on mail.
Accounts are then opened under assumed names and cheques
(often altered or tempered in some way) deposited so that the
fraudsters can withdraw the money.
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ii. Stolen payment card:
Often the first indication that a victim’s wallet has been stolen is
a ‘phone call from a credit card issuer asking if the owner has
gone on a spending spree’. The simplest form of this fraud
involves stealing the card itself and copies the credit number and
use the card reader to copy magnetic storage facility in the card.
Data extracted will be used to develop duplicate cards which
could be used at ATM.
iii. Cheque kitting:
This involves the opening of accounts at two or more institutions

and using ‘float time’ of available funds to create fraudulent
balances. It exploits a system in which, when a cheque is
deposited to a bank account on which the cheque is drawn until
the cheque actually clear. Some perpetrators have swapped
cheques between various banks on daily basis, using each to
recover the shortfall for the previous cheque (Hassibi; 2000).
iv. Use of the RTGS:
This involves criminals who create counterfeit RTGs purporting to

be from particular bank. They conduct business transactions with
unsuspecting victims whom they engaged as if genuine
customers and pay the goods and services by use of these RTGs.
With some knowledge of the banking system, the criminals will
complete forms using false accounts and particulars and endorse
a forged bank date stamp authenticating the transfer of money.
The unwitting victim when given a duplicate copy which purports
that money has been deposited in his account. When goods are
transferred to the criminal, he disappears. In Zimbabwe, this
type of fraud had been rampant during the financial turmoil.
v. Advance fee fraud:
This refers to an upfront payment by a victim to fraudster; to

allow the victim to take part in a much larger financial
transaction which he believes will either bring him profit or
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results in credit being advanced to him (Smith etal; 1999). The

characteristic of this type of fraud usually entails that services of
the prospective victims are enlisted to assist in an activity of
questionable legality, thus providing assurance that the victim
when defrauded, would be unlikely to report the matter to
police.
2.8 FRAUD PREVENTION
Given the prevalence of fraud and the negative consequences

associated with it, there is a compelling argument that organisations
should invest time and resources towards tackling fraud. There is,
however, sometimes debate as to whether these resources should be
committed to fraud prevention or fraud detection.
Based on the earlier discussion around why people commit fraud, it

would seem that one of the most effective ways to deal with the
problem of fraud is to adopt methods that will decrease motive,
restrict opportunity and limit the ability for potential fraudsters to
rationalise their actions. In the case of deliberate acts of fraud, the aim
of preventative controls is to reduce opportunity and remove
temptation from potential offenders. Prevention techniques include the
introduction of policies, procedures and controls, and activities such as
training and fraud awareness to stop fraud from occurring.
It is profitable to prevent losses, and fraud prevention activities can

help to ensure the stability and continued existence of a business.
However, based on recent surveys, many organisations do not have a
formal approach to fraud prevention. Once a fraud has already
occurred, the likelihood of recovering stolen funds from the perpetrator
or through insurance is often relatively low. According to KPMG’s
survey in 2007, only 16% of organisations profit led were able to
recover their losses. A number of others are still trying to recover
stolen assets, but the process is often difficult and lengthy. At least
half of the organisations have been unable to recover any assets at all.
As such, it is preferable to try to prevent the loss from occurring in the
first place and the old adage ‘prevention is better than cure’ certainly
applies to fraud. It is worth bearing in mind though, that fraud
prevention techniques, while worth investing in, cannot provide 100%
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protection. It is difficult, if not impossible, to remove all opportunities

for perpetrating fraud.
FRAUD PREVENTION MODELS
COSO MODEL
Some business organizations and government departments across the

globe are in constant danger of losing profits and revenue through
illegal undertakings by personnel, chief amongst them, fraud. It
encompasses any crime that uses deception and trickery as its modus
operandi, for personal gain.
The model is exhortatory of an Internal Control System which revolves

around 5 considerations. These are:
a. The control environment
b. Control activities
c. Risk assessment
d. Information and Communication system
e. Monitoring system
a. Control Environment
Control environment factors include the integrity, ethical values,

management's operating style, delegation of authority systems, as well
as the processes for managing and developing people in the
organization, OR
The basis of the control system is the philosophy of the business and
people who are controlling it. Consider the environment before
designing the controls with bias towards:
 Management style
 Audit functions
 Employee policies
 Management style
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Organisation’s lead style is on top-down basis. So business ethics and

philosophy assume a descending order from the directors to
management, and down to employees who should respond to that
style and behave ethically.
The model asks the following questions about the Management;
i. Does the management manipulate performance measures so that they

read favourably?
ii.Whether the management is open and honest with employees about

performance results.
However, so many questions can be raised depending on the nature

and type of business.
Audit Function
These could be external or internal audits. How best to use the audit
function can be achieved by asking ‘what if’ questions such as;
 What if the auditing was a daily occurrence?
 What if employees from one area conducts peer audits of another

area of the business?
The place of the auditor in the control environment.
Again questions may vary depending on the nature and type of the
business.
Employee Policies
In as much as employees are an indispensable feature in the business,

owners need to consider how to deal with them. Since they observe
the lead of the management they should enlightened as to what is
expected of them and what is not.
Considering that the employees are the ones involved in fraud, the
management develop an employee policy which may articulate the
following areas;
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Hiring: It deeps into the recruiting procedure. Management should

ensure proper background checks and screening. Restrict access to
sensitive areas of the organisation or computer systems.
Firing: Involves terminating employment services of an employee.

Casualties should be distanced from sensitive areas, e.g from
computers, lest an employee may sabotage operations or copy
sensitive data before leaving.
Training: Is of importance to the business. Areas of concern are

security measurements, fraud awareness etc
b. Control Activities
These are the policies and procedures that help ensure management
directives are carried out.
There are 5 major control activities which are:
 Proper authorisation process
 Segregation of duties
 Adequate documentation of transaction
 Physical controls over assets and records
 Independent internal checks
Proper authorisation process
The top management cannot do everything by themselves. So they

delegate and set levels of authority for employees and policies on who
may authorize what. Authorizations may include the power to incur
costs below a certain level or from an approved supplier, granting
discounts to a certain level, or writing off debtors accounts below a
certain level.
Authorization policies must be detailed and published. Employees must

know where their authority begins and ends. Transactions that exceed
the level of authorization may then be classified as suspicious and
examined.
Segregation of duties
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Having fewer people involved in the transaction, the greater the

opportunity for fraud. Small businesses may find separating duties
difficult because of the limited number of employees. One trusted
person may perform a number of asset transactions resulting in
him/her tempted to commit fraud.
There are 4 basic parts in a transaction and are:
(i) Authorizing the transaction - giving the order or making

the sale;
(ii) Recording the transaction in the books;
(iii) Receiving or sending the goods; and
(iv) Making or receiving the payment.
If all these transactions are made by one or few persons, the business
is at high risk of getting defrauded. Therefore introducing computers to
articulate much of the business transactions may reduce the risk of
impropriety or error.
Adequate documentation of transaction
Ensure full documentation of a transaction ensuring that the paper trail

should contain sufficient information for every person associated to a
transaction to prove that they conducted their part properly with the
required authorization.
Physical Controls over assets
Physical security protect assets from third parties. The following are
some of the physical controls a business may maintain;
(i) Maintain an asset register of all physical assets;
(ii) Maintain regular backups of all electronic information;
(iii) Separate recording and handling duties involving assets other than
stock;
(iv) Restrict access to physical assets to employees with proper

authorization and a need to deal with those assets.
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Independent Internal checks
Employees outside the immediate work area may be made to conduct

checks on transactions to ensure completeness. (peer auditing). The
following areas are checkable;
a. reconciling two separately maintained records (bank account to

bank records
b. To spot check on certain transactions to verify and confirm

correctness
The list of performable tasks is not exhaustive.
c. Risk Assessment
Every business faces differing risks from external and internal sources
that must be assessed. A precondition to risk assessment is
establishment of objectives. Risk assessment is the identification and
analysis of relevant risks to the achievement of assigned objectives.
Risk assessment is a prerequisite for determining how the risks should
be managed.
d. Information and communication systems
Communication is key part of the system as they produce reports,

including operational, financial and compliance-related information that
make it possible to run and control the business. Information must be
stored in a way that it can be used to audit and review transactions,
but it must be available to the appropriate people at the appropriate
times. In a broader sense, effective communication must ensure
information flows down, across and up the organization. There has to
be a line of communication of external parties, e.g customers and
suppliers about related policy positions
e. Monitoring the system
This is a process that assesses the quality of the system's performance

over time. Business owners must consider the control activities and
consider the information and communication procedures needed to
make those controls work. They can then create a worthwhile fraud
control system. This is accomplished through ongoing monitoring
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activities or separate evaluations. Internal control deficiencies detected

through these monitoring activities should be reported upstream and
corrective actions should be taken to ensure continuous improvement
of the system.
2.9 FRAUD DETECTION
As fraud prevention techniques may not stop all potential perpetrators,

organisations should ensure that systems are in place that will
highlight occurrences of fraud in a timely manner. This is achieved
through fraud detection.
A fraud detection strategy should involve use of analytical and other

procedures to highlight anomalies, and the introduction of reporting
mechanisms that provide for communication of suspected fraudulent
acts. Key elements of a comprehensive fraud detection system would
include exception reporting, data mining, trend analysis and ongoing
risk assessment.
Fraud detection may highlight ongoing frauds that are taking place or
offences that have already happened. Such schemes may not be
affected by the introduction of prevention techniques and, even if the
fraudsters are hindered in the future, recovery of historical losses will
only be possible through fraud detection. Potential recovery of losses is
not the only objective of a detection programme though, and
fraudulent behaviour should not be ignored just because there may be
no recovery of losses. Fraud detection also allows for the improvement
of internal systems and controls. Many frauds exploit deficiencies in
control systems. Through detection of such frauds, controls can be
tightened making it more difficult for potential perpetrators to act.
Fraud prevention and fraud detection both have a role to play and it is
unlikely that either will fully succeed without the other. Therefore, it is
important that organisations consider both fraud prevention and fraud
detection in designing an effective strategy to manage the risk of
fraud.
Hindsight is a wonderful thing! Fraud is always obvious to the

fraudster’s colleagues after the event. Their statements, and those of
internal auditors, when taken by the police or other investigatory
bodies, frequently highlight all the more common fraud indicators.
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However, the mistake is always the same – fraud was never

considered a possibility. No matter how innocent an action may be, or
how plausible an explanation maybe, fraud is always a possibility!
NB-Fraud can be detected through:

1. Whistleblowing hotline
2. Internal tip-off
3. By accident
4. External tip-off
5. Law enforcement investigation
6. Change of personnel/duties
7. Internal audit
8. External audit
9. Corporate security
10. Risk management
2.10 INDICATORS AND WARNINGS OF FRAUD
It will never be possible to eliminate all fraud. No system is completely

fraud proof, since many fraudsters are able to bypass control systems
put in place to stop them. However, greater attention paid to some of
the most common indicators can provide early warning that something
is not quite right and increase the likelihood that the fraudster will be
is covered. With that in mind, this section provides details of some of
the more common indicators of fraud.
Fraud indicators fall into two categories:
 warning signs
 Fraud alerts.
Warning signs
Warning signs have been described as organisational indicators of

fraud risk and some examples are set out below. For convenience
these have been subdivided into business risk, financial risk,
environmental risk and IT and data risk.
a. Business risk
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This has been subdivided into cultural issues, management issues,

employee issues, process issues and transaction issues.
Cultural issues:
 Absence of an anti-fraud policy and culture.
 Failure of management to implement a sound system of internal

control and/or to demonstrate commitment to it at all times.
Management issues:
 Lack of financial management expertise and professionalism in key

accounting principles, review of judgements made in management
reports and the review of significant cost estimates.
 A history of legal or regulatory violations within the organisation

and/or claims alleging such violations.
 Strained relationships within the organisation between management

and internal or external auditors.
 Lack of management supervision of staff.
 Lack of clear management control of responsibilities, authorities,

delegation, etc.
 Bonus schemes linked to ambitious targets or directly to financial

results.
Employee issues:
 Inadequate recruitment processes and absence of screening.
 Unusually close relationships – internal and external.
 Potential or actual labour force reductions or redundancies.
 Dissatisfied employees who have access to desirable assets.
 Unusual staff behaviour patterns.
 Personal financial pressures on key staff.
 Low salary levels of key staff.
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 Poor dissemination of internal controls.
 Employees working unsocial hours unsupervised.
 Employees not taking annual leave requirements.
 Unwillingness to share duties.
Process issues:
 Lack of job segregation and independent checking of key

transactions.
 Lack of identification of the asset.
 Poor management accountability and reporting systems.
 Poor physical security of assets.
 Poor access controls to physical assets and IT security systems.
 Lack of and/or inadequacy of internal controls.
 Poor documentation of internal controls.
Transaction issues
 Poor documentary support for specific transactions such as rebates

and credit notes.
 Large cash transactions.
 Susceptibility of assets to misappropriation.
Financial risk:
 Management compensation highly dependent on meeting

aggressive performance targets.
 Significant pressures on management to obtain additional finance.
 Extensive use of tax havens without clear business justification.
 Complex transactions.
 Use of complex financial products.
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 Complex legal ownership and/or organisational structures.
 Rapid changes in profitability.
 Existence of personal or corporate guarantees.
Environmental risk
 The introduction of new accounting or other regulatory

requirements, including health and safety or environmental
legislation, which could significantly alter reported results.
 Highly competitive market conditions and decreasing profitability

levels within the organisation.
 The organisation operating in a declining business sector and/or

facing prospects of business failure.
 Rapid technological changes which may increase potential for

product obsolescence.
 Significant changes in customer demand.
IT and data risk
 Unauthorised access to systems by employees or external

attackers.
 The wealth of malicious codes and tools available to attackers.
 Rapid changes in information technology.
 Users not adopting good computer security practices, e.g. sharing

or displaying passwords.
 Unauthorised electronic transfer of funds or other assets.
Fraud alerts/ Red Flags
Fraud alerts have been described as specific events or red flags,

which may be indicative of fraud. A list of possible fraud alerts is
provided below. This should not be considered an exhaustive list, as
alerts will appear in many different guises according to
circumstances.
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d. Symptoms of Fraud
The Red Flags
Red flags of fraud are fraud related variables or forces that

influence the decision to commit fraud. In their epistle “How to
Detect and Prevent Business Fraud”, Albrecht et al, catagorised red
flags as:
 Situational
 Opportunity
 Personal characteristics
Fraud for personal benefit – situational red flags
 High personal debts or losses
 Living beyond one’s means
 Gambling or speculation
 Illicit involvement with members of the opposite sex
 Excessive use of alcohol
Fraud for personal benefit – opportunity red flags
 Close association with suppliers and key people
 Dominant top management
 Too much trust in key employees
 Dishonest or unethical management
 Familiarity with operations and position of trust
Company situations encouraging fraud on its behalf:
 Heavy investment or losses
 Urgent for need for favourable earnings
 Temporary bad situation
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 Revoked or imperilled licences
Opportunity for fraud on behalf of the company:
 Related party transactions
 Poor accounting records
 Poor internal controls or weak enforcement
 Atypical or hot
Personal characteristics red flags include:
 Low moral character
 Wheeler-dealer
 Rationaliser of contradictory behaviour
 Poor credit rating or financial status.
2.11 Relevancy of Red Flags in Fraud Investigations.
Red flags are used to trigger an investigation of fraud.
 Anonymous emails/letters/telephone calls.
 Emails sent at unusual times, with unnecessary attachments, or to

unusual destinations.
 Discrepancy between earnings and lifestyle.
 Unusual, irrational, or inconsistent behaviour.
 Alteration of documents and records.
 Extensive use of correction fluid and unusual erasures.
 Photocopies of documents in place of originals.
 Rubber Stamp signatures instead of originals.
 Signature or handwriting discrepancies.
 Missing approvals or authorisation signatures.
 Transactions initiated without the appropriate authority.
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 Unexplained fluctuations in stock account balances, inventory

variances and turnover rates.
 Inventory adjustments.
 Subsidiary ledgers, which do not reconcile with control accounts.
 Extensive use of ‘suspense’ accounts.
 Inappropriate or unusual journal entries.
 Confirmation letters not returned.
 Supplies purchased in excess of need.
 Higher than average number of failed login attempts.
 Systems being accessed outside of normal work hours or from

outside the normal work area.
 Controls or audit logs being switched off.
2.12 THEFT
According to Milton (2018), theft is defined as the unlawful and

intentional appropriation of moveable corporeal property which
belongs and is in possession of another. Only certain specified
categories of theft maybe regarded as white collar crime or
commercial crimes. For example it is obvious that that the person who
steals laundry from a washing line or steal a motor vehicles cannot be
classified as a white collar criminal. The white collar criminal referred
to is the person who steals money by, for instance altering the share
register of a company reflecting his or her principal as a shareholder
so as to misrepresent himself or herself, or his or her own company as
the shareholder (Milton 2013).
Gottshalk (2009) defines theft as “...the illegal taking of another

person’s, group’s or organisation’s property without the victim’s
consent”. Section 113 of the Code provides that; “Any person who
takes property capable of being stolen;
1. Knowing that another person is entitled to own, possess or

control the property or realizing that there is a real risk or
possibility that another person may be so entitled; and
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2. Intending to deprive the other person permanently of his

or her ownership, possession or control or realizing that
there is a real risk or possibility that he or she may so
deprive the other person of his or her ownership, possession
or control; shall be guilty of theft…”
Sentencing in light of a conviction for theft shall be either or both

of the following
i. a fine not exceeding level fourteen or twice the value of the

stolen property, whichever is the greater; or
ii. imprisonment for a period not exceeding twenty-five years; or

both:
Provided that a court may suspend the whole or any part of a

sentence of imprisonment imposed for theft on condition that the
convicted person restores any property stolen by him or her to the
person deprived of it or compensates such person for its loss.
A person shall also be guilty of theft if he or she holds trust

property and, in breach of the terms under which it is so held, he or
she intentionally
a. omits to account or accounts incorrectly for the property; or
b. hands the property or part of it over to a person other than the

person to whom he or she is obliged to hand it over; or
c. uses the property or part of it for a purpose other than the purpose
for which he or she is obliged to use it; or
d. Converts the property or part of it to his or her own use.
The above shall not apply if 
a. the person holding or receiving the property has properly and

transparently accounted for the property in accordance with the
terms of the trust; or
b. The person disposing of the property retains the equivalent value

thereof for delivery to the person entitled thereto, unless the terms
55
under which he or she holds or receives the property require him or

her to hold and deliver back the specific property.
Where a person, by means of a misrepresentation takes any

property capable of being stolen, intending to deprive another
person of the ownership, possession or control of the property, the
competent charge is fraud and not theft.
2.13 COUNTERFEIT CURRENCY
Counterfeit money is currency produced without the legal sanction of

the State or government, usually in a deliberate attempt to imitate
that currency and so as to deceive its recipient. Producing or using
counterfeit money is a form of fraud or forgery, and is illegal.
Counterfeiting:- is the ability to make and imitate something valuable
exactly so as to deceive or cheat people. In general terms,
counterfeiting is fraudulent imitation of a genuine document with the
intention of deceiving another.
Counterfeiting is one example of fraud that can have extremely serious

consequences. Technology is ever improving, making it easier for
counterfeiters to produce realistic looking packaging and fool
legitimate wholesalers and retailers. Counterfeiting is a potentially
lucrative business for the fraudster, with possibilities of large
commercial profits.
Security documents: - refers to those documents which are

themselves of a security nature and are wholly owned by a particular
country e.g currency, travel documents, national identification cards
and driver’s licenses.
Hologram: - a photographic pattern that gives a three dimensional

image when illuminated by coherent light. eg the inscription 20 or 100
found on US $20-00 and US 100-00 respectively.
Most currencies in the world share the same paper and bear security
features in the form of watermarks, which vary from country to
country. Every security document can be compared to a human body,
which consists of the head, abdomen and legs. As such security
document must fulfill three [3] fundamental features namely.
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1. External layer: - which consists of the surface security features

which can be in the form of holograms, kinegrams and coatings.
2. Middle layer: - consists of the printing and include the methods,
process, design and type of ink to be used.
3. This is the interior design which consists of water marks, security
threads and security fibers.
Each government of a particular country enter into a contractual
obligation with specific companies to process security documents eg
typo crafters who used to make cheques, fidelity printers etc. a special
type of paper manufactured from 100% cotton is used in the
production of security documents inclusive of currency. The company
is given instruction on the features expected on the particular security
document.
Methods used to print counterfeit currency.
 Letter press printing: - relates to raised printing normally with

ink and can be felt.
 Lithography printing: - the process of printing from a flat metal
surface treated so as to repel ink except where it is required for
printing.
 Screen printing: - the process of forcing ink onto A SURFACE
through a screen of fine material so as to create a picture or
pattern.
 Blind intaglio: - screen printed with no ink but can be felt. The
intaglio is raised at the front and depressed at the back.
 Typographic/ press printing:- normally used to print serial
numbers
 Offset Printing: - used to print the background of a security
document and forms the security grid normally in rainbow colours.
 Optical variable ink: - normally used to create holograms as
security features in currency, passports, visas and electronic
payment cards. The colour used changes as you shift the document
and can be printed by either intaglio or screen print.
2.14 ELECTRONIC CARD FRAUD
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Occurs when an individual uses another person’s credit or debit card

for personal reasons while the owner of the card and the card issuer
are not aware of the fact that the card is being used.
Electronic Card Payment Systems
a. Debit Card
The money for payment of a service or purchased items comes

direct directly out of the holder’s account (called a demand deposit
account).
b. Credit Card
A credit card provides the holder with credit to make purchases up

to a limit fixed by the card issuer. Holders are charged high
interest on their unpaid balances.
c. Smart cards
A smart card is an electronic card containing an embedded

microchip that enables predetermined operations (the addition,
deletion or manipulation of information) on the card. The
embedded chip may be a micro-processor combined with a
memory chip or just a memory chip with non-programmable logic.
The programmes and data on the micro-chip must be downloaded
and activated by some device (such as an ATM machine).
d. Stored value cards
A stored value card is an electronic card that has a monetary value

loaded onto it and the card is usually rechargeable. From a
physical and technical standpoint, a stored value card is
indistinguishable from a regular credit or debit card. The monetary
value of the card is stored in the magnetic stripe. Stored value
cards can also be used to make purchases, in the same way that
credit and debit cards are used-relying on the same networks,
encrypted communications and electronic banking protocols.
Stored value cards come in two varieties; closed and open

loop:
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Closed loop or single purpose cards
Are issued by a specific merchant and can only be used to make

purchases from that merchant. Mall cards (Jaggers, OK, Borne
Marche and ZUPCO Tap cards) and prepaid telephone cards are
examples.
Open loop or multipurpose card
Can be used for other purposes such as receiving direct deposits

or withdrawing cash from ATM machines. Some open-loop cards
are issued by financial institutions with card association branding
such as Visa and Master card.
How Are Electronic Cards Forged or Counterfeited?
The most common phenomenon is whereby fraudsters get a

genuine card using forged document. Procedurally before a bank
issues the card to the client, they Ask for documents to verify
whether the client is trustworthy or not. Normally fraudsters
tender forged documents and are allowed to open or have credit
cards, which they use to defraud the bank. However sophisticated
fraudsters take the following steps to forge a card.
 They operate in syndicates and at times they employ the

services of a barman in a club or hotel who after receiving a
client’s card swipes it on a skimmer. The skimmer is capable of
reading and storing data from the electronic card.
 The skimmer is then given to the next person who connects it to
a machine called MSR60 which will be connected to a computer.
The personal identification data will then reflect on the computer
were it will be stored.
 Thereafter the fraudster copies the information on a counterfeit
card.
 The card is endorsed with 16 bank digits as well as the name of
the bank using a printing type called INTEGLIO, you can feel the
print if you move your fingers on top of it.
 After that, the counterfeit card is complete and ready for use
either by the fraudster himself or other who buy counterfeits for
use.
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Modus Operandi Electronic Card Payment Systems
a. Wireless identity theft.
Wireless identity theft is the act of compromising on individual’s

identifying information using wireless (radiofrequency) mechanisms.
Payment card data is stolen using special radio scanners (also known
as skimmers), without the cards being physically touched or removed
from their owners’ pockets, purses or handbags.
These payment cards have a magnetic strip which responds

to certain radio frequencies. When the magnetic strip comes
into contact with radio waves, they respond with a slightly altered
signal. The response can confirm encoded personal identifying
information, including the card holder’s name, address, phone
number and pertinent account or employment information.
b. Application Fraud
Application fraud occurs when criminals use stolen or fake documents

to open an account in someone else’s name. For identification
purposes, criminals may try to steal documents such as utility bills and
bank statements to build up useful personal information
Fraudsters may also tender forged documents which include; forged

identity, forged employment details, forged business details and false
contact details. They are then given credit cards which they eventually
use to defraud the bank.
c. Card swapping scams
Fraudsters work in connivance with employees of card accepting

shops, bars and hotels. After having a service, the victim gives out
his credit card for payment. The employee will then process the
payment but instead of returning the true card, the employee returns
another different card to an unsuspecting victim. The fraudsters will
then use the card to make fraudulent payments. The victim may
discover the fraud after some days.
d. Card trapping devices
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A device is inserted into an ATM’s card slot, which retains the card
inside the cash machine. The criminal tricks the victim into re-
entering their PIN while the criminal watches. After the cardholder
gives up and leaves the device, the fraudster will remove the card
and withdraw cash.
e. Credit card fraud
Credit card fraud, by definition, is the fraudulent use of a credit card

done so through the theft of the cardholder’s personal details. Thanks
to the invention of the internet and the endless supply of e-
Commerce sites that came with it, credit card scammers now have an
easier time than ever pinching your details. In simpler times – before
the internet exploded into society – you might’ve visualised credit
card fraud as a man dressed in all black stealing your card from your
wallet. But these days’ scammers have an arsenal of tricks to swipe
from your credit card, and most don’t even need your physical card to
do it at all. Here are the five most common types of credit card fraud
out there, as well as how you can spot them and what you can do if
you’re caught by one.
The five key types of credit card fraud are:
 Card-not-present (CNP) fraud
 Counterfeit and skimming fraud
 Lost and stolen card fraud
 Card-never arrived-fraud
 False application fraud
f. Other methods
 Use of fake business sites
 Manufacturing of fake cards but with genuine credit card numbers

Stealing of credit and debit cards and then making fraudulent
transactions
 Using a debit card or credit card belonging to a trusted person for

fraudulent purposes
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Prevention and Precautionary Measures
1. Buyers should never respond to emails that request for credit

information for credit card information and they should also not
respond to emails that ask them to go to a website to verify
personal information.
2. Buyers and merchants need to be wary of emails with a sense of

urgency which attempts to rush buyers into action. For example,
“Update now or we will close your account...”
3. Buyers and merchants must not open emails from unknown

senders.
4. Buyers must never send account information, such as account

numbers or PIN in an e-mail as it may be intercepted.
5. People should never throw away ATM receipts, credit statements,

credit cards, or bank statements in a usable form.
6. Reconcile bank account monthly, and notify your bank of

discrepancies immediately
7. Quickly report loss or theft of your wallet and credit cards.
8. Report unauthorized financial transaction to your bank,

credit card Company, and the police as soon as you detect them.
9. If you spot anything unusual about the ATM, or there are signs of
tampering, do not use it.
10. Destroy personal financial information by tearing; shredding or

burning when such information is no longer required.
11. Make it difficult for strangers to access your personal or financial

information.
12. Do not disclose personal information when asked to do so by mail.
13. Do not carry unnecessary information in your wallet or purse.
14. Avoid writing down your pin numbers and passwords.
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15. Type the website address into your internet browser

rather than clicking on a hyperlink in the email.
16. Use up- to- date anti-virus software and install a firewall.
17. Ensure your browser is set to the highest level of security

notification and monitoring. The safety options are not always
activated by default when you install your computer.
18. If you are not sure, contact your bank instantly over the
phone.
19. Beware of unusually long websites.
ACTIVITY
1. Identify the types of payment cards.
2. State and explain any four modus operandi for electronic

card fraud.
3. List any four modus operandi for identity theft.
List and explain any six precautionary measure for

preventing electronic card fraud.
2.15 INTERNET BASED FRAUDS
Internet fraud takes a number of forms with the responsible

individuals changing tactics rapidly to avoid detection. The
perpetrators rely on telemarketing, emails, as well as presenting
themselves personally to unsuspecting people. The evolution of
internet marketing as well as ecommerce and the ease of connectivity
create increasing opportunities for fraudsters while at the same time
placing more unsuspecting internet users at risk of falling prey to
these schemes. There exists a thriving economy online with large
sums of money changing hands online. It is therefore important for
any internet user to easily identify when they are exposed to internet
fraud schemes and as such avoid being a victim.
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Internet Uses
The internet is important as it provides an avenue as well as a

backbone for electronic commerce, research, communication, and
education. It provides information ranging from full books to journals,
all of which are important to teachers and students. Research for
instance can be very difficult if the information present in online
databases was not available. Apart from educational use, students as
well as teachers participate in communication through social networks,
electronic mail, as well as voice communication such as Skype.
Risks of Using Internet
Use of the internet may expose both teachers and students to many
risks ranging from identity theft, fraud, and exposure to malware. The
possibility of falling victim to fraud is always high especially if one is
unaware of the existence of internet fraud. Many international students
and teachers are more susceptible to online fraud, as some have had
little access to unlimited connectivity prior to joining schools overseas.
Some international students and teachers may not know that the
internet can be used to deceive and swindle them out of their money
or even steal personal information. Many users use the service without
taking any precautions, especially on unsecured
Forms of Internet Fraud
Internet fraud takes a number of forms with perpetrators currently

relying on telemarketing, emails, and presenting themselves
personally to unsuspecting people met in online chat rooms or social
networks. The evolution of internet marketing as well as e-commerce
has increased opportunities for fraudsters. There exists a thriving
economy online for these scammers, making it a necessity for
international students and teachers to have skills for early detection of
fraud. Unfortunately, this detection happens when it is too late. This is
due to lack of proper training on safe use of the internet (Brown,
2011).
The most common form of online fraud occurs through sale or

advertisements of goods and services that do not exist. International
students are more likely to fall prey as they have a desperate need for
many products not sold locally. They end up giving away their credit
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card information to buy those products. Most of the time however,

goods and services paid for are not delivered to the buyer. This
common occurrence has seen many students and teachers lose money
to fraudsters. Early detection is possible and can result in the
reimbursement of funds if reported immediately to the bank issuing
the credit or debit card.
Other online sellers create false statements about their goods and
services with products delivered. Generally, fraudsters make online
auctions look legitimate and tailor them to attract foreign students
who are yet to learn how online fraud happens. All information
provided by the seller is assumed true in online trade, as a buyer
cannot physically see or inspect the goods. Online traders all over the
world are however flouting this rule (Roddel, 2008).
INTERNET BASED FRAUDS MODUS OPERANDI
a. Phishing
In the advent of covid-19 pandemic, most Zimbabweans shift from

normal way of conducting business to the new normal, ‘Phishing
scams’ have found fertile ground. In The Chronicle newspaper 2 March
2021, The Postal and Telecommunications Regulatory Authority of
Zimbabwe (POTRAZ) issued out a warning to the public against rising
phishing scams mainly committed via “e-mails and SMS” which were
threatening the digital economic revolution.
Phishing is where you get emails pretending to come from a genuine

company. They often look like they come from your bank and request
personal information where you type in your password or personal
details by following a link. The email will request the victim to click
onto a link on the email to update personal details. Once clicked, the
link will divert the victim’s information to a fraudster’s website. The
result is that fraudsters use the phished information to commit fraud
or effect an illegal transaction prejudicial to a customer.
Ways in which one can protect self from phishing scams
 Do not reply to a link in a spam email that threatens to remove

one from their mailing list eg Dear customer. According to the
terms of service, you will have to confirm your email by following
65
link or your account will be suspended within 24 hours for

security reasons. Spam is the term commonly used to describe
the abundance of unsolicited bulk email which plagues the
mailboxes of Internet users worldwide. The statistics vary over
time, but suggest that over 70% of email traffic currently falls
into this category.
 Immediately delete email if you are not sure where it come
from.
 Avoid disclosing your personal details/data to companies you are
unfamiliar with on the internet.
 When conducting an online business transaction, avoid or
minimise using public internet café.
 Regularly change your password and always ensure to sign out
your account once you finish your business on the internet.
 If anything look suspicious on the internet immediately stop your
transaction.
b. Malware
Consists of computer viruses that can be installed in a computer

without the user’s knowledge. Malware can also be used in
conjunction with phishing emails. Victims are asked to click on a
link in an unsolicited email, or they may be asked to download
infected software. The virus will capture passwords, financial
information or other personal details.
Reasons for creating Malware
According to Aycock (2006), attributing the motivation to write

malware to a single factor is a gross oversimplification. In fact, not
all driving forces behind the creation of malware may even be
conscious motivations. Malware may be written for a variety of
reasons, including:
a. Fascination with technology.

Exploring technology underpins hacker culture, and the same
ideas apply to creating malware. Creating malware, like writing
any software, poses an intellectual challenge. In fact, since the
anti-virus community acts as an opponent, writing malware may
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even have a greater draw from a game-playing point of view

than other forms of software development.
b. Fame.
Virus writers are known to form informal groups to exchange
information and communicate with like-minded people. As with
any group, people may want to achieve fame within their
community which would mean creating cleverly-written malware
with impact. Having a creation appear on the "top ten" lists of
malware that many anti-virus companies maintain for their
customers' information can result in prestige for the creator.
c. Graffiti.
Malware writing can serve as a form of expression in much the
same
way that graffiti does in the physical world. Arguably, this is a
malicious act, but one not specifically targeted to any one person
or group.
d. Revenge.
Malware can be used to exact revenge for some real or imagined
slight, by a disgruntled employee or ex-spouse, for instance.
e. Ideology.
Ideological motivations are difficult to assess unless the malware
writer is found, because what appears to be political or religious
motivation may just be a red herring. Having said that, there
have been some instances which suggest this underlying cause.
One version of the Code Red worm attempted a DDoS on the
White House web site, for instance.' The Cager Trojan horse may
have been religiously-motivated, because it tried to prevent
infected machines from viewing adult web sites - an offender
would be presented with a quote from the Qur'an in Arabic,
English, and Persian, followed by advice in Persian on how to
atone for looking at naughty pictures on the internet.
f. Commercial sabotage.
Malware can be hard to target accurately, but some attempts at
sabotaging a single company have been seen. This may tie in to
schemes for revenge, or possibly financial gain for a malware
writer who hopes to take advantage of lower stock prices.
g. Extortion.
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On occasion, malware has been used on a large scale to try and

extort money from people.
h. Warfare and espionage.
Malware can be used for military or intelligence purposes, or as a
complement to traditional forms of warfare. Such malware can
be employed by both established armies as well as terrorist
groups.
i. Malware battles.
A relatively recent development, malware writers can have their
creations fight one another using the Internet as their
battleground.
j. Commercial gain.
Malware skills may be leveraged in various ways by others,
resulting in malware authors being paid for their wares. For
example, use of worm-constructed botnets may be sold to
spammers. Again, humans are complicated, and their
motivations may not be simple.
2.16 CONSPIRACY
According to the Criminal Law (Codification and reform Act Section 188
Conspiracy occurs when,
1. Any person who enters into an agreement with one or more

other persons for the commission of a crime, whether in terms of
this Code or any other enactment
a. intending by the agreement to bring about the commission of

the crime; or
b. realising that there is a real risk or possibility that the agreement

may bring about the
c. Commission of the crime; shall be guilty of conspiracy to commit

the crime concerned.
2. For an agreement to constitute a conspiracy
a. it shall not be necessary for the parties
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i. to agree upon the time, manner and circumstances in which

the crime which is the subject of the conspiracy is to be
committed; or
ii. to know the identity of every other party to the conspiracy;
b. it shall be immaterial that
i. the crime which is the subject of the conspiracy is to be

committed by one, both or all of the parties to the agreement;
ii. One or more of the parties to the conspiracy, other than the
accused, did not know that the subject-matter of the
agreement was the commission of a crime.
2.17 MONEY LAUNDERING
Money laundering is the process by which criminals hide, disguise and

legitimize their ill-gotten gains (Maras 2015). The definition of money
laundering, according to HM Revenue and Customs, is quite simple.
Yet, the act in itself is much more complex: “…Exchanging money or
assets that were obtained criminally for money or other assets that are
‘clean’.” Money laundering is a serious type of criminal fraud whereby
illegal money is acquired and turned into legal tender. It is the attempt
to make money from criminal activity appears legitimate, by disguising
its original source. It covers any activity by which the apparent source
and ownership of money representing the proceeds of income are
changed so that the money appears to have been obtained
legitimately. Money laundering is a crime that is against the interests
of the state, and it is associated with drug and people trafficking in
particular and with organised crime in general.
The criminal practice of filtering ill-gotten gains or dirty money through

a series of transactions, so that the funds are cleaned to look like
proceeds from legal activities.
Stages in money laundering
Money laundering often occurs in three steps: first, cash is introduced

into the financial system by some means (“placement”), the second
involves carrying out complex financial transactions in order to
camouflage the illegal source (“layering”), and the final step entails
69
acquiring wealth generated from the transactions of the illicit funds

(“integration”). Some of these steps may be omitted, depending on
the circumstances; for example, non-cash proceeds that are already in
the financial system would have no need for placement (Peter 2004).
a. Placement
The first stage of money laundering is known as ‘placement’, whereby

‘dirty’ money is placed into the legal, financial systems. After getting
hold of illegally acquired funds through theft, bribery and corruption,
financial criminals move the cash from its source. This is where the
criminal money is ‘washed’ and disguised by being placed into a
legitimate financial system, such as in offshore accounts.
This is the initial disposal of the proceeds of the initial illegal activity
into apparently legitimate business activity or property. This is the first
stage where the launderer removes the cash from the location of
acquisition so as to avoid detection from the authorities. The goal at
this stage will be to deposit the criminal proceeds into the financial
system.
Placement takes place in the following ways:
 Direct cash deposit. This may be possible through collusion

with bank staff. The proceeds may also be mixed with proceeds
of legitimate business.
 Smurfing/structuring. Cash is broken into smaller deposits of

money to defeat suspicion of money laundering and to avoid
anti- laundering reporting requirements.
 Change of currency
 Cash is used to buy high value goods, property or business

assets.
 Transportation of cash
b. Layering
The second stage in the money laundering process is referred to as

‘layering’. This is a complex web of transactions to move money into
the financial system, usually via offshore techniques.
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Once the funds have been placed into the financial system, the
criminals make it difficult for authorities to detect laundering activity.
They do this by obscuring the audit trail through the strategic
layering of financial transactions and fraudulent bookkeeping.
Layering is a significantly intricate element of the money laundering

process. Its purpose is to create multiple financial transactions to
conceal the original source and ownership of the illegal funds.
This involves the transfer of monies from business to business or

place to place to conceal the original source.
This stage entails an attempt to conceal or disguise the source of the

ownership of the funds. The purpose of layering is to disassociate the
illegal money from the source of the crime by purposely creating a
complex web of financial transactions aimed at concealing any audit
trail as well as the source and ownership of funds.
Layering stage takes place in the following ways:
 Electronic transfers
 Depositing cash in overseas banking system
 Withdrawal of cash
 Multiple deposits
 Sale of assets
c. Integration
The third of the stages of money laundering is ‘integration’. The ‘dirty’

money is now absorbed into the economy, for instance via real
estate. Once the ‘dirty’ money has been placed and layered, the
funds will be integrated back into the legitimate financial system as
‘legal’ tender. Integration is done very carefully from legitimate
sources to create a plausible explanation for where the money has
come from. This money is then reunited with the criminal with what
appears to be a legitimate source. At this stage, it is very difficult to
distinguish between legal and illegal wealth. The launderer can use
the money without getting caught. It is extremely challenging to
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catch the criminal if there is no documentation to use as evidence

from the previous stages.
It is important to note that, in reality, there is often an overlap in

these three stages of money laundering. As in some cases of financial
crimes, there is no requirement for the illegal funds to even be
‘placed’. Having been layered, the money has the appearance of
legitimate funds.
It is the stage at which the money is integrated into the legitimate

economic and financial system and is assimilated with all other assets
in the system.
Integration of the “cleared” money into the economy is accomplished

when the launderer makes it appear to have been legally earned. By
this stage it is difficult to distinguish legal and illegal wealth.
Integration takes place in the following ways;
 Consumption: day to day expenditure, lifestyle, jewellery,

vehicles
 Fabricating a loan
 Fabricating a rise in net-worth buying and selling real estate and

other items, fabricating casino winnings, lottery prices,
inheritance, etc
 Investments- bank accounts, real estates, shares, funding of

legal and illegal business activities.
Methods of washing dirty money
 Structuring: Often known as "smurfing," it is a method of

placement by which cash is broken into smaller deposits of money,
used to defeat suspicion of money laundering and to avoid anti-
money laundering reporting requirements. A sub-component of this
is to use smaller amounts of cash to purchase bearer instruments,
such as money orders, and then ultimately deposit those, again in
small amounts.
 Bulk cash smuggling: Physically smuggling cash to another

jurisdiction, where it will be deposited in a financial institution, such
72
as an offshore bank, with greater bank secrecy or less rigorous

money laundering enforcement.
 Cash-intensive businesses: A business typically involved in

receiving cash will use its accounts to deposit both legitimate and
criminally derived cash, claiming all of it as legitimate earnings.
Often, the business will have no legitimate activity.
 Over purchasing: This is where a launderer buys an item from a

private seller, pays with an excess check, and is paid back the
overflow. This remainder can be claimed as legal spending, and be
used however the launderer likes. Ex. - "I would like to buy your
product at $300. However, I would like to pay with a $2000 check,
and for you to send me back the $1700".
 Trade-based laundering: Under- or over-valuing invoices in order to

disguise the movement of money.
 Shell companies and trusts: Trusts and shell companies disguise the
true owner of money. Trusts and corporate vehicles, depending on
the jurisdiction, need not disclose their true, beneficial, owner.
 Bank capture: Money launderers or criminals buy a controlling

interest in a bank, preferably in a jurisdiction with weak money
laundering controls, and then move money through the bank
without scrutiny.
 Casinos: An individual will walk into a casino or a horse race track

with cash and buy chips, play for a while and then cash in his chips,
for which he will be issued a cheque. The money launderer will then
be able to deposit the cheque into his bank account, and claim it as
gambling winnings. If the casino is controlled by organized crime
and the money launderer works for them, the launderer will lose
the illegally obtained money on purpose in the casino and be paid
with other funds by the criminal organization.
 Real estate: Real estate may be purchased with illegal proceeds,

then sold. The proceeds from the sale appear to outsiders to be
legitimate income. Alternatively, the price of the property is
manipulated; the seller will agree to a contract that under-
represents the value of the property, and will receive criminal
proceeds to make up the difference.
73
 Black salaries: Companies might have unregistered employees

without a written contract who are given cash salaries. Black cash
might be used to pay them.
Criminalizing Money Laundering
The elements of the crime of money laundering are set forth in the
United Nations Convention Against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances and Convention against Transnational
Organized Crime. It is knowingly engaging in a financial transaction
with the proceeds of a crime for the purpose of concealing or
disguising the illicit origin of the property.
The Role of Financial Institutions
Today, most financial institutions globally, and many non-financial

institutions, are required to identify and report transactions of a
suspicious nature to the financial intelligence unit in the respective
country. For example, a bank must verify a customer's identity and, if
necessary, monitor transactions for suspicious activity. This is often
termed as KYC – "know your customer." This means, to begin with,
knowing the identity of the customers, and further, understanding the
kinds of transactions in which the customer is likely to engage. By
knowing one's customers, financial institutions will often be able to
identify unusual or suspicious behavior, termed anomalies, which may
be an indication of money laundering.
Bank employees, such as tellers and customer account

representatives, are trained in anti-money laundering and are
instructed to report activities that they deem suspicious. Additionally,
anti-money laundering software filters customer data, classifies it
according to level of suspicion, and inspects it for anomalies. Such
anomalies would include any sudden and substantial increase in funds,
a large withdrawal, or moving money to a bank secrecy jurisdiction.
Smaller transactions that meet certain criteria may be also be flagged
as suspicious. For example, structuring can lead to flagged
transactions. The software will also flag names that have been placed
on government "blacklists" and transactions involving countries that
are thought to be hostile to the host nation. Once the software has
mined data and flagged suspect transactions, it alerts bank
74
management, who must then determine whether to file a report with

the government.
Effects of money laundering on the economy
If funds from criminal activities can be easily processed through a

particular institution, the institution could be drawn into active
complicity with criminals and become part of the criminal network.
This will have a damaging effect on the attitudes of its customers and
other stakeholders.
 Inexplicable changes in money demand, contamination on legal

financial transactions and volatility of international capital flows and
exchanges rates due to unanticipated cross border asset transfers.
 It damages the integrity of the whole society and undermines

democracy and the rule of law.
The influence of money laundering on economic development
 Economies with growing or developing financial centers, but

inadequate controls are particularly vulnerable as established
financial center countries implement comprehensive anti- money
laundering regimes.
 Differences between national anti- money laundering systems will
be exploited by launderers, who tend to move their networks to
countries and financial systems with weak or ineffective
countermeasures.
 Damages the integrity of an individual financial institution, as well
as a damping effect of foreign direct investment when a country’s
commercial and financial sectors are perceived to be subject to the
control and influence of organized crime.
Measures to counter money laundering
 Increasing awareness of the phenomenon- both within the

governments and the private business sector.
 Provision of the necessary legal or regulatory tools to the
authorities charged with combating the problem.
 Development of an all-stakeholder anti-money laundering
programme
Legislations Used Against Money Laundering
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1. Bank use promotion and Suppression of Money Laundering Act

Ch.24:24.
2. Serious offences [Confiscation and Profits] Act Ch.9:17
3. Anti-Money Laundering and Combating the financing of
Terrorism [RBZ] Regulating Instrument.
4. Anti-Corruption and Anti-Monopolies Act.
Investigation, Prosecution and Trial of Money Laundering
In Zimbabwe, the police are constitutionally mandated to investigate

all criminal matters and bring the case before the courts for
prosecution.
When investigating money laundering, the police involve other

specialized units, ie Central Bank (Reserve Bank of Zimbabwe),
Forensic Scientists, Investigators from Zimbabwe Revenue Authority
and Auditor General.
Police work hand in glove with financial institutions when investigating

money laundering because proceeds from the crime are usually
deposited within the financial houses and also they are directly or
indirectly involved.
Money laundering trial takes place in the Magistrate or High courts

depending on the magnitude or value of the amounts involved.
Magistrates and judges who provide over these economic crimes
receive financial training.
Classification of Proceeds and Assets Derived from crimes

(unexplained wealth), forfeiture, freezing systems and
collection of the value of the proceeds.
The Bank Use Promotion and Suppression of Money Laundering Act,

Chapter 24:24, empower the police to recover proceeds of crime in
whatever form (cash or assets).
When freezing money, the police apply for a subpoena through the
courts and court issues a subpoena instructing the bank or finance
76
house to freeze the money involved. The assets are kept by the police
until the case is finalised by the courts.
The court usually makes determination on how to dispose of the assets

or money. Assets out-flowed to foreign countries are recovered under
the terms of Mutual Assistance Act.
The Money Laundering Regulations (2007), require organisations to

establish internal systems and procedures which are designed to deter
criminals from using the organisation to launder money or finance
terrorism. Such systems also assist in detecting the crime and
prosecuting the perpetrators. These regulations apply to all ‘relevant
persons’, a term which covers a wide range of organisations, including
banking and investment businesses, accountants and auditors, tax
advisers, lawyers, estate agents and casinos.
As each organisation is different, systems should be designed which

are appropriate and tailored to each business. These include:
a. Internal reporting procedures. These should include appointing a

Money Laundering Reporting Officer (MLRO) to receive internal
reports of suspected money laundering and, where appropriate, to
report them to SOCA.
b. Customer due diligence measures. These should include identifying

and verifying customers and monitoring the business relationship
according to the level of risk of money laundering.
c. Record-keeping procedures. Such procedures may include, for

example, retaining copies of customer identity details such as
passports. These procedures are important in proving compliance
with the regulations.
d. Ensuring that employees are educated. Employees should receive

appropriate training concerning the law relating to money
laundering and the business's policies and procedures in dealing
with it.
Should a business fail to implement these measures a criminal offence,

punishable with a maximum sentence of two years' imprisonment
and/or an unlimited fine, is committed irrespective of whether money
laundering has taken place. Civil penalties may also be imposed.
77
Money laundering legislation has been influenced on a number of

different Acts of Parliament:
1. Drug Trafficking Offences Act 1986
2. Criminal Justice Act 1993
3. Terrorism Act 2000
4. Anti-terrorism Crime and Security Act 2001
5. Proceeds of Crime Act 2002
6. Money Laundering Regulations 2007.
ACTIVITY 2.3
1. Define and explain Fraud and fraud management techniques.

2. Briefly outline types of fraud that are prevalent in Zimbabwe since the
turn of the millennium. Suggest possible solutions to this vice.
3. Explain Theft and its essential elements.
4. Describe Counterfeit currency.
5. Descried and explain Credit and Debit card offences
6. Explain Internet based frauds.
7. Describe Conspiracy.
8. Describe and explain Money laundering.
REFERENCES
74 ISSN-2162-3104 Fall 2011 Vol.1 Issue 2 Journal of International

Students
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UNIT THREE
OTHER COMMERCIAL CRIMES

3.0 INTRODUCTION
This unit will cover other commercial crimes like Stock market
manipulation and other securities related offences, Criminal breach of
trust, Custom and excise offences, Secret commissions, planned
bankruptcy and possession of goods obtained by crime.
OBJECTIVES
1. Describe stock market manipulation and other securities related
offences.
2. Explain the criminal breach of trust.
3. Identify custom and excise offences.
4. Explain secret commissions.
5. Identify planned bankruptcy.
6. Analyse the possession of goods obtained by crime.
7. Analyse investment fraud.
8. Procurement process and offences
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3.1 Stock Market Manipulation and other securities related

offences.
Public confidence in the fairness of markets enhances their liquidity

and efficiency. Market manipulation harms the integrity of, and
thereby undermines public confidence in, securities and derivatives
markets by distorting prices, harming the hedging functions of these
markets and creating an artificial appearance of market activity.
Accordingly, authorities need to have adequate systems in place to
detect, investigate and prosecute market manipulation.
While the character and harmful market effects of market manipulation

are well known, the incentives, means and opportunities for carrying
manipulative schemes continue to evolve. As new products and new
technologies are developed, as new market participants undertake
trading activity, and as trading on global and interconnected markets
continues to grow, the risk of cross-border and cross market
manipulation increases.
Types of Manipulative Conduct
Types of manipulative conduct maybe categorised according to the

methods used, the objectives of the underlying activity and the parties
involved.
A. Methods
A number of methods used include:
Pumping and dumping.
Insiders or promoters obtain ownership or control of a significant block

of stock of selected issuer. Can use their own accounts or nominees.
Then they start hyping the stock to the public to generate artificial
interest in stock and cause price to rise. Often use internet, spam
email and faxes.
The pump: False Press Releases-company or promoter puts out

press release announcing some form of market moving news that is
not true or without legitimate basis.eg claim to an invention, patent,
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new product or license for certain technology or false or baseless

financial claims, i.e. record earnings, revenue or sales.
The pump: paid promoters-purportedly independent adviser or

analyst publishes a recommendation or analysis regarding company
recommending stock as a “bargain”, “must buy” or “hot buy”. In
reality, this recommendation or analysis has been paid for by insiders
or promoter but this payment is not disclosed. Don’t typically call
themselves promoters-might appear as consultant. Common
promotion methods are newsletters, website coverages, public
relations, online ads and cyber manipulation.
The pump: Social media- manipulators have found the internet to be

a great tool for manipulating stocks. Use e-mail spam campaigns to
create a “buzz” or public interest in a particular stock.
The pump: Boiler rooms- in the “good old days” of market

manipulation before the internet but boilers rooms are making a
comeback. A small army of dishonest salesmen who make cold calls to
as many investors as possible. Use high pressure sales tactics to
convince customers to buy stocks that have been manipulated. May
make outlandish promises of sure quick profits coupled with
misrepresentations about the issuer.
The dump: Time to sell- once the manipulators have been successful
in driving up the price of the companies stock through these various
means, they will “dump” or sell their own shares to the unsuspecting
public and walk away with the profits. Investors are left holding largely
worthless stock. Can be highly profitable for manipulators.
Buying activity at increasingly higher price. Securities are sold in the

market (often to retail customers) at the higher prices.
Pumping-company or promoter puts out press release announcing

some form of marketing news that is not true or without legitimate
basis.
Painting the tape.
Painting the tape is a reference to the days when stock trades would
print out on ticker tape. It is an action meant to provide a false signal
of heavy activity on one side of the market. In reality, the player has
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an accomplice who is conducting offsetting trades elsewhere. This is

also called “marking the close” when it occurs at the end of the trading
day. Engaging in a series of transactions that are reported on public
display facility to give the impression of activity or price movement in
a security.
Wash sales/ Wash trades.
A person places simultaneous orders to buy and sell quantities of the

same security in transactions involving no change of beneficial
ownership of the stock. Improper transactions in which there is no
genuine change in actual ownership of security or derivative contract.
Offsetting trades that are placed for the purpose of misleading the
market rather than actually acquiring or liquidating stock. Wash sales
can occur by the same player through two different brokers or as a
collusion between a trader and a broker.
Matched Orders
A person or persons places buy or sell orders for a security with the
knowledge that sell or buy orders of substantially the same size and
price will be placed simultaneously. Engaged in for the purpose of
creating a false appearance of active trading in the market for a
security. May be done at successfully higher and higher prices to move
market price of security upwards.
Advancing the bid.
Increasing the bid for a security or derivative to increase its price.
Marking the close
Repeatedly upping the bid at or near close of the market or purchasing

the stock at or near the close of the market at an uptick. This is done
to send positive signal to the market. Closed market prices is viewed
by market professionals and investors as a guide to the trend of the
market. Buying or selling securities contracts at the close of the
market in an effort to alter the closing price of the security contract.
Squeeze
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Taking advantage of a shortage in an asset by controlling the

demands-side and exploiting market congestion during such shortage
in such a way as to create artificial prices.
Layering
Trader places orders with no intention of having them executed but

rather to trick others into buying or selling a stock at an artificial price
driven by the orders that trader later cancels.
B. Objectives
The objectives of manipulative conduct will be normally to make

money either directly through transactions, or by other means. Some
examples of how this motive is achieved include:
Influencing the price or value of security contract, so that the

manipulator can-
 Buy at a lower price

 Sell at a higher price
 Influence takeover bids or other large transactions
 Influencing the impression of financial advice or placements.
C. Parties involved
Those in a position to effect a manipulation include:
Issuers of securities
Participants in the security market
Market intermediaries and
Any combination of the above acting in cooperation with one another.
Tools for Preventing Market Manipulation
There is a wide range of tools that are used to prevent and deter
manipulative conduct in securities. The rules attempt to ensure that a
price is set by the unimpeded collective judgement of buyers and
sellers.
Short selling rules
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A short sale is defined as the sale of a security that the seller does not
own or that the seller owns but does not deliver to the purchaser. In
order to deliver the security to the purchaser, the short seller will
borrow the security, typically from a broker or an institutional investor.
The short seller later closes out the position by returning the security
to the lender, usually by making a purchase on the open market.
Rules limiting participation during offerings
Security offerings present special opportunities and incentives for

manipulation. Around the time of an offering, manipulative activities
can be used to increase offering proceeds by increasing the market
price on which the offering will be priced, or stabilizing the market
price to avoid a failed offering.
Methods for calculating index.
There are several methods for calculation of an index, including:

capitalization-weighting calculation, modified capitalization-weighting,
equal-currency-weighting, and modified equal-currency-weighting.
Tools for Detecting Market Manipulation
A. Market Surveillance
The goal of surveillance is to spot adverse situations in the market and

to pursue appropriate preventative actions to avoid disruptions to the
market. Surveillance systems include tracking of changes in price or
volume of a particular security contract as well as changes in price or
volume of related securities and underlying asset. Also, identifying
concentration of ownership and potential collusive activity by market
participants. Conducting financial surveillance to identify potentially
large market losses or gains incurred by firms trading for their own
accounts. Surveillance systems should be designed to keep pace with
technological and market evolution.
B. Internet and other media surveillance
Surveillance of information provided to the public should include media

(newspapers, television, newsletters and analysts research reports
etc). In addition, on the securities side in particular, the internet may
also require specific attention and surveillance skills because of its
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characteristics, including ability to reach vast numbers of people

instantaneously. The speed with which information disseminated over
the internet can be changed creates challenges for regulators in
identifying and preserving evidence.
Investigating Market Manipulation.
A. Investigating an artificial price or price effect
If a security appears to increase suddenly in price or volume of

trading, or both, such that manipulative activity is suspected, the
investigator should perform some analysis of the market for the
security and why the price or volume or both, may be changing
suddenly. The investigator should examine how the securities were
introduced and traded in the market.
B. Investigating the possible distortion of the laws of supply

and demand
As an early step in the investigation of a possible manipulation of the

market a security, it is necessary to establish the available supply,
how much of that supply is publicly traded and whether the security is
owned broadly by many different market participants.
C. Proving intent
The challenges in taking enforcement action against

manipulation.
A. Standards of proof
In many jurisdictions, there is different standard of proof for civil
and criminal actions, with the highest standard of proof required for
criminal proceedings. It will often be difficult for the regulatory
authority or prosecutor to obtain direct evidence- either through
documents or testimony of manipulation. More commonly, however,
the manipulation case will have to be based on circumstantial or
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indirect evidence. Such inferences may be based on the patterns of

conduct, the fact that the accused person has a pecuniary interest
in a given security, the accused’s having taken steps to effect a rise
in its price and the trading patterns or patterns that emerge from
an analysis of the trading data.
B. Voluminous Data Management and Analysis.
If all of the relevant trading records are obtained, as well as bank
records, corporate documents, and other records, the volume of
data and documents may become significant. As a method of
organising the evidence, and in order to demonstrate the likely
manipulation. As a method of organising the evidence, and in order
to demonstrate the likely manipulation, it may be useful to prepare
charts showing price and volume history for the applicable period
for the relevant security.
C. Use of expert testimony
Expert testimony, either delivered by outside experts or by experts
from within the relevant securities, may be useful to explain to the
trier of fact what the patterns of trading are and why they are
indicative of manipulation. Also, depending on the rules of the
particular jurisdiction, the expert may be used as a short cut way of
getting the trading data into evidence or before the trier of fact as
material relied on by the expert in reaching his opinion.
2.18 Criminal Breach of trust.
Breach of trust is an act (or failure to act) by a trustee that is not

authorised either by the trust document or by law. The obligation of
mutual trust implies that the employer must no behave arbitrary or
unreasonably or so as to destroy necessary basis of mutual
confidence. The effect of the obligation requires that a balance be
struck between an employer’s interest in managing his business as he
sees fit and the employee’s interest in not being unfairly and
improperly exploited. For example a breach of trust can occur if a
trustee:
 Distributes trust assets to a beneficiary who is not entitled to

them under the terms of the trust document.
 Invests the trust fund in a way not permitted by his express or
statutory powers of investment.
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 Breaches a fiduciary duty such as the duty not to profit from the
trust, for examples by selling one of his own assets to the trust.
 Breaches the common law or statutory duty of care, for
example, by exercising the power of investment without
exercising such skill a care as is reasonable in the circumstances.
2.19 CUSTOM AND EXERCISE OFFENCES
CUSTOMS AND EXCISE ACT, Chapter 23:02
False statements by persons arriving in or departing from Zimbabwe
(1) Any person who—
(a) on or after arriving in Zimbabwe or being on a railway train

destined for Zimbabwe; or
(b) on departing from Zimbabwe or being on a railway train leaving

Zimbabwe;
is questioned by an officer as to whether he has upon his person or in

his possession any goods, whether dutiable or otherwise, or goods the
importation or exportation of which is prohibited, restricted or
controlled and who denies that he has any such goods upon his person
or in his possession or fails to mention any dutiable, prohibited or
restricted goods which he has upon his person or in his possession
shall be guilty of an offence if such goods are discovered to be or, at
the time of the denial or of the statement, to have been upon his
person or in his possession.
(1a) Any person who is guilty of an offence in terms of subsection (1)

shall be liable to a fine not exceeding level seven or to imprisonment
for a period not exceeding one year or to both such fine and such
imprisonment.
(2) In subsection (1)—
“goods” includes Zimbabwean and foreign currency.
Sec 174 False invoices, false representation and forgery
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(a) produces any false invoice or an invoice framed so as to deceive

or makes any false representation in regard to the nature, the quantity
or the value of any goods or the country in which such goods are
grown, produced or manufactured; or
(b) forges any document required under this Act or any law relating to
customs or excise; or
(c) under false pretences or with intent to defraud or to evade the

provisions of this Act or any law relating to customs or excise or by
making any false statement, affidavit or declaration, procures or
attempts to procure any document required under this Act or any law
relating to customs and excise which is incorrect in any material
particular; or
(d) being required to make or render any report, statement,

document, bill of entry, declaration or return or to supply any
information demanded or asked for or to answer any question,
neglects or refuses to do so or makes or renders any untrue or false
report, statement, document, bill of entry, representation, declaration,
return or answer or conceals or makes away with any goods required
to be accounted for by this Act or any law relating to customs or
excise; or
(e) imports or attempts to import or assists in or is accessory to or

connives at the importation or attempted importation of any goods
illegally or without payment of the duty thereon; or
(f) deals with or assists in dealing with any goods contrary to this Act
or any law relating to customs or excise;
shall be guilty of an offence so, however, that nothing in this Act shall
be taken to require any person who has acted as counsel or attorney
for any person to disclose any privileged communication made to him
in that capacity.
(a) uses or attempts to use any document which has been forged with
intent to defeat this Act or any law relating to customs or excise; or
(b) otherwise than in accordance with this Act, buys or receives or has
in his possession any goods required to be accounted for by this Act or
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any law relating to customs or excise before they have been so

accounted for; or
(c) otherwise than in accordance with this Act, has in his possession
any goods liable to forfeiture under this Act or any law relating to
customs or excise;
shall be guilty of an offence, unless he produces evidence to show that

he did not know—
(i) that the document was forged; or
(ii) that duty on the goods had not been paid or secured or that the
goods had not been accounted for in terms of this Act or any law
relating to customs or excise; or
(iii) that the goods were liable to forfeiture; as the case may be.
(2a) Any person who is guilty of an offence in terms of subsection (1)

or (2) shall be liable to—
(a) a fine not exceeding level twelve or3x times the duty-paid value of
the goods concerned, whichever is the greater; or
(b) imprisonment for a period not exceeding 5 years;
or to both such fine and such imprisonment.
(3) For the purposes of this section, the forgery of a document is the

making of a false document, knowing it to be false, with the intention
that it shall in any way be used or acted upon as genuine, whether
within Zimbabwe or not, and making a false document includes
making any material alteration in a genuine document, whether by
addition, insertion, obliteration, erasure, removal or otherwise.
Sec 175 Importation and possession of blank invoices
Any person, other than a visitor, who imports or possesses any blank
or incomplete invoice or other similar document capable of being
completed and used as an invoice for goods from outside Zimbabwe
shall be guilty of an offence and liable to a fine not exceeding level
seven or to imprisonment for a period not exceeding one year or to
both such fine and such imprisonment.
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Sec 175A Manufacture, use or possession of customs date

stamps
Any person who unlawfully makes, uses or possesses a customs date

stamp or a stamp capable of being used as a customs date stamp shall
be guilty of an offence.
Sec 176 Obstruction of officers
Any person who assaults, resists, hinders, obstructs, threatens, abuses

or does any act that is likely to undermine the authority of—
(a) an officer in the course of his duties; or
(b) any person aiding or assisting an officer in carrying out his duties;

Sec 177 Removing, altering or defacing marks or seals
Any person who wilfully removes any customs seal from any ship,
aircraft, vehicle or package without the authority of an officer or in
accordance with the regulations, or who wilfully alters, defaces,
obliterates or imitates any mark placed by an officer on any package
Sec 178 Certain responsibilities of master, pilot or person in

charge of vehicle
(1) Whenever any lock, mark or seal has been placed by an officer

upon any goods on board any ship, aircraft or vehicle, or when the
hatchways of a ship have been fastened down by an officer, the
master of the ship, the pilot of the aircraft or the person in charge of
the vehicle, as the case may be, shall ensure that—
(a) the lock, mark or seal is not opened, altered or broken; and
(b) such goods are not secretly removed; and
(c) such hatchways are not opened without the consent of an officer;
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and if he fails so to ensure the master of the ship, the pilot of

aircraft or the person in charge of the vehicle, as the case may be,
shall be guilty of an offence, unless he proves that he took all
reasonable precautions to prevent any such act.
(2) Whenever any lock, mark or seal has been placed by an officer

upon any valve, meter or other appliance or apparatus used to control
or record the flow of goods through or from a pipeline, the operator of
the pipeline shall ensure that the lock, mark or seal is not opened,
altered or broken without the prior authority of an officer, and if he
fails so to ensure the operator of the pipeline shall be guilty of an
offence, unless he proves that he took all reasonable precautions to
prevent any such act.
(3) Any person who contravenes section (1) or (2) shall be guilty of an
offence and liable to a fine not exceeding level seven or to
imprisonment for a period not exceeding one year or to both such fine
and such imprisonment.
Sec 179 Removing or breaking locks placed on warehouse
(1) Any person who removes or breaks any lock placed on a

warehouse by an officer in terms of section seventy-nine shall be
guilty of an offence and any person who removes any goods from a
warehouse without the permission of the officer shall be guilty of an
offence.
(2) Any person who is guilty of an offence in terms of subsection (1)

shall be liable to—
(a) a fine not exceeding level twelve or 3x times the duty-paid value
of the spirits or wine concerned, whichever is the greater; or
(b) imprisonment for a period not exceeding five years;
Sec 180 Failure to make full declaration of sealable goods
If, when required by an officer to make a declaration of sealable goods

in terms of this Act—
(a) the master of a ship, the pilot of an aircraft or the person in

charge of a vehicle fails to make a full disclosure of any sealable goods
91
which are the unconsumed stores of the said ship, aircraft or vehicle;
or
(b) the master of a ship, the pilot of an aircraft, the person in charge
of a vehicle or any member of the crew of such ship, aircraft or
vehicle, fails to make a full disclosure of any sealable goods which are
the property of or in the possession of such master, pilot, person or
member of the crew, as the case may be;
such master, pilot, person or member of the crew aforesaid shall be

guilty of an offence and liable to a fine not exceeding level seven or to
imprisonment for a period not exceeding one year or to both such fine
and such imprisonment.
Sec 181 Bribery and collusion

Bribery involves the giving of something of value in exchange for an
official’s exercise of power. According to Customs and Exercises Act,
section 181-
(1) If any officer—
(a) directly or indirectly asks for or takes, in connection with any of

his duties in terms of this Act, any payment or other reward
whatsoever, whether pecuniary or otherwise, not being a payment or
reward that he is lawfully entitled to claim or receive; or
(b) enters into or acquiesces in any agreement to do, abstain from

doing, permit, conceal or connive at any act or thing whereby the
State is or may be defrauded or which is otherwise unlawful, being an
act or thing relating to the administration of this Act;
he shall be guilty of an offence.
(2) If any person—
(a) directly or indirectly offers or gives to any officer any payment or

other reward whatsoever, whether pecuniary or otherwise; or
(b) proposes or enters into any agreement with any officer;
in order to induce him to do, abstain from doing, permit, conceal or

connive at any act, omission or thing, as the case may be, whereby
the State is or may be defrauded or which is otherwise unlawful, being
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an act, omission or thing relating to the administration of this Act, or

otherwise to take any course contrary to his duty, he shall be guilty of
an offence.

or (2) shall be liable to
(a) a fine not exceeding level fourteen or 3x times the value of the
payment or reward concerned, whichever is the greater; or
(4) The court convicting a person of an offence in terms of subsection

(1) or (2) may order the forfeiture to the State of any payment or
reward that forms the subject of the offence.
[
Sec 182 Smuggling
Smuggling is defined as unlawful and secret import and exports of

goods, especially without paying duties imposed by the law. The legal
definition differs in each country and organisation. The Customs and
Exercises Act considers smuggling an offence.
Drivers of smuggling
In the economy, smuggling is in competition with locally produced

goods that can be legally imported. It can be considered an import
substituting activity that diverts resources from the government to the
illegal private sector. Selection of smuggling over other money driven
crimes is influenced by the factors given below:
 Import quotas or bans.

 Demand for illegal goods.
 Complicated/Inconsistent legal regulation.
 High corruption or poor law enforcement.
 Low living standards in neighbouring countries.
 Industry reputation and self-regulation
Mechanisms of smuggling
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While most common method of smuggling may be conducted by

concealing smuggled goods or transporting them through a relatively
unprotected border area, criminal organisations utilize optional
methods to transport different types of goods.
Smuggle mode Definition

Contraband Concealment of goods or persons
and avoidance of official customs
control. This may include usage of
mules.
Relabelling/ Camouflage of high tariff products
reclassification as low tariff products to reduce
tax liability or misdirection of
country of origin to take
advantage of favourable economic
conditions.
Underreporting Intentional marked down invoicing
of goods by importer or lower
recording of quantity, possibly in
collusion with customs.
Falsification Tampering of documents
pertaining to goods or faking of
passports to smuggle migrants.
Shortlanding transit Grey channel leakage of transit
goods goods or bonded imports not
meant for consumption in
domestic market.
According to Customs and Exercises Act, section 182-
(1) Any person who smuggles any goods shall be guilty of an offence
and liable to—
of the goods, whichever is the greater; or
(2) If the smuggling of goods referred to in subsection (1) was

discovered by the use of any mechanical scanning device, the person
smuggling the goods shall be liable, in addition to any other penalty to
94
which he or she may be liable under this Act, to pay a civil penalty
equivalent to the value of goods in question,
(3) The Commissioner General may, by action in any court of

competent jurisdiction, recover from a person smuggling the goods
referred to in subsection (2) the penalty there provided, and such
penalty, once recovered, shall form part of the funds of the Zimbabwe
Revenue Authority and be used for the purpose of maintaining
mechanical scanning devices used by the Authority to detect
smuggling.
Sec 183 Importation of prohibited or restricted thing to be an

offence
If any thing is imported in contravention of section forty-seven or

forty-eight, the person importing it shall be guilty of an offence and
liable to—
(a) a fine not exceeding level twelve or 3x the duty-paid value of the
goods, whichever is the greater; or
Sec 184 Miscellaneous offences
Any person who—
(a) supplies the means or materials for or assists in establishing or

repairing, maintaining or working any still the keeping and using of
which has not been authorized in terms of this Act, knowing at the
time when he so supplies or assists that it was such a still; or
(b) has upon his premises or in his custody or under his control or
purchases, sells or otherwise disposes of any goods liable to excise
duty or surtax which have been manufactured in breach of this Act,
unless such person proves that he was unaware that such goods were
so manufactured; or
(c) is found without lawful excuse in any place where the illegal
manufacture of goods liable to excise duty or surtax is being carried
out; or
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(d) without lawful authority, imports any goods liable to excise duty
or surtax after they have been exported from Zimbabwe; or
(e) not being a person licensed to manufacture goods liable to excise

duty or surtax, has, without lawful authority, in his possession,
custody or control any manufactured or partly manufactured goods
liable to excise duty or surtax upon which such duty or surtax has not
been paid; or
(f) falsely holds himself out to be an officer; or
(g) fraudulently claims a refund, rebate, remission or drawback to

which he is not entitled; or
(h) makes improper use of any licence, permit or document issued

under this Act or any other law relating to customs or excise; or
(i) damages, destroys or disposes of any goods in order to prevent

the seizure thereof by an officer or any other person authorized to
seize them; or
(j) in order to prevent the securing of any goods seized under this
Act, rescues, damages or destroys such goods; or
(k) rescues any person apprehended for any offence under this Act or
prevents any such apprehension; or
(l) imports any goods in pursuance of a bill of entry in which a false

declaration has been made;
(n) breaks or tampers with a seal or fails to observe an embargo on

or an order to examine containers or packages or any other order in
connection with the movement or unpacking of containers;
shall be guilty of an offence and liable to—
of the goods that are the subject of the offence, whichever is the
greater; or
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Sec 185 Warehousing irregularities
(1) If any goods entered for warehousing—
(a) are not carried into and deposited in the warehouse; or
(b) after deposit in the warehouse, are taken out of the warehouse
without entry and clearance; or
(c) having been entered and cleared for exportation, are not duly
exported;
the owner of such goods, or the proprietor or occupier of the

warehouse, or the person responsible for the handling of the goods,
shall be guilty of an offence, unless he proves that he took all
reasonable precautions to prevent the act which constituted the
offence.

shall be liable to a fine not exceeding level seven or to imprisonment
for a period not exceeding one year or to both such fine and such
imprisonment.
(3) Any goods that are the subject of an offence in terms of

subsection (1) shall be liable to forfeiture.
2.20 SECRET COMMISSIONS
Secret commission:
is any benefit received by the agent which compromises the

interests of the principal, whether it’s taking a positive step or failing
to act when the agent should have acted. It is a benefit bestowed on
an agent, and which is over and above what the principal knows about
or has agreed to pay the agent. When the principal does not know
about the benefit, the agent colludes with others and undermines the
integrity of their relationship with their principal. For example, if the
seller was prepared to sell a property for $210, and a secret
commission of $10 was paid, it must be quite likely that, in the
absence of such commission, the vendor would have been prepared to
sell for less than $200.
2.20.1 Definition of key terms
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Principal: Means the employer or other person for whom an agent acts
and, in relation to
a. a trustee, assignee, liquidator, executor or legal representative

referred to in the definition of “agent”, includes:
i. all persons represented by the trustee, assignee, liquidator, executor

or legal representative, as the case may be, or in relation to whom he
or she stands in a position of trust; and
ii. any public officer who is responsible for supervising the activities of
the trustee, assignee, liquidator, executor or legal representative;
b. a public officer who is a Minister and a member of the Cabinet,

includes both the State and the Cabinet;
c. a member of a council, board, committee or authority which is

responsible for administering the affairs or business of a statutory
body, local authority, body corporate or association, includes both such
council, board, committee or authority and the statutory body, local
authority, body corporate or association for whose affairs or business it
is responsible; (Criminal Law [Codification and Reform] Act Chapter
9:23).
Agent: Means a person employed by or acting for another person in

any capacity whatsoever and, without limiting this definition in any
way, includes:
a. a director or secretary of a company;
b. the trustee of an insolvent estate;
c. the assignee of an estate that has been assigned for the benefit or
with the consent of creditors;
d. the liquidator of a company or other body corporate that is being

wound up or dissolved;
e. the executor of the estate of a deceased person;
f. the legal representative of a person who is a minor or of unsound

mind or who is otherwise under legal disability;
g. a public officer;
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h. a member of a board, committee or other authority which is

responsible for administering the affairs or business of a body
corporate or association other than a statutory body or local
authority;
i. a person who voluntarily
ii. manages the affairs or business of another person; or
iii. Takes care of the property of another person; without the

knowledge or consent of that other person ;( Criminal Law
[Codification and Reform] Act Chapter 9:23).
2.20.2 The Illegality of Secret Commissions
Payments of secret commissions are a form of fraud, and are quasi-

criminal acts. They are treated seriously because: an agent's duty of
fidelity is compromised, trust and integrity in commercial transactions
are undermined.
Receiving secret commissions is so serious that agreeing to receive

them usually gives rise to right to terminate the agency relationship,
dismiss the person from employment or any form of punishment by
the criminal courts. Secrets Commissions can manifest themselves in
form of Corruption or Bribery.
a. Corruption
Chitsove (2018) opines that Corruption according to the principal –

agent approach is premised on two assumptions:
i. that there exist conflict of interests between principals and

agents; and,
ii. That the agent has more information than the principals.
In this model corruption occurs when the agent acquires certain

information about the task at hand and opts not to disclose it to
the principal, and betrays the principal's interest by pursuing his
self-interest. Corruption manifests itself in various forms
including: fraud and deceit; embezzlement; nepotism and
influence peddling etc.
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There are several types of corruption. The distinctions can be

useful in designing and developing reform programs and
strategies:
• Petty corruption-practiced by public servants who may be

basically decent and honest individuals but who are grossly
underpaid and depend on small bribes from the public to feed
and educate their families;
• Grand corruption-high-level public officials and politicians

make decisions involving large public contracts or projects
financed by external donors. This corruption is motivated by
personal greed. The money or assets from such corruption
usually is transferred to individuals or political party coffers.
• Episodic corruption-honest behaviour is the norm, corruption

the exception, and the dishonest public servant is disciplined
when detected; and
• Systemic corruption-channels of malfeasance extend

upwards from the bribe collection points, and systems depend on
corruption for their survival;
b. Bribery
Occurs when:
a. agent who obtains or agrees to obtain or solicits or agrees to

accept for himself or herself or any other person any gift or
consideration as an inducement or reward
i. for doing or omitting to do, or having done or omitted to do, any

act in relation to his or her principal’s affairs or business; or
ii. for showing or not showing, or having shown or not shown, any
favour or disfavour to any person or thing in relation to his or
her principal’s affairs or business;
Knowing or realising that there is a real risk or possibility that

such gift or consideration is not due to him or her in terms of
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any agreement or arrangement between himself or herself and

his or her principal; or
b. person who, for himself or herself or any other person, gives or

agrees to give or offers to an agent any gift or consideration as
an inducement or reward
i. for doing or omitting to do, or having done or omitted to do, any

act in relation to his or her principal’s affairs or business; or
ii. for showing or not showing, or having shown or not shown, any
favour or disfavour to any person or thing in relation to his or
her principal’s affairs or business;
Knowing or realising that there is a real risk or possibility that

such gift or consideration is not due to the agent in terms of any
agreement or arrangement between the agent and his or her
principal; (Criminal Law Code)
2.20.3 National Legislations Dealing with Secrets Commissions
Zimbabwe has numerous pieces of legislation dealing with corruption

and Bribery. The primary laws are the Constitution; Prevention of
Corruption Act, (Chapter 9:16); Criminal Law (Codification and
Reform) Act, (Chapter 9:23); Money Laundering and Proceeds of
Crime Act 4/201 and Anti-Corruption Commission Act, (Chapter 9:22).
a. The Constitution of Zimbabwe
The Constitution of Zimbabwe lists good governance as one of the

national objectives that the State and all institutions and agencies of
government must be guided by. Under this national objective, the
State must adopt and implement policies and legislation that foster
efficiency, competence, accountability, transparency, personal integrity
and financial probity in all institutions and agencies of government at
every level and in every public institution. Specifically, all
appointments to public offices must be made primarily on the basis of
merit and measures must be taken to expose, combat and eradicate
all forms of corruption and abuse of power by those holding political
and public offices. This provision applies to all political and public
officials. First, it empowers the Legislature to adopt laws that deal with
corruption and secondly enjoins other organs of the States to adopt
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and implement anti-corruption policies such as Code of conduct.

Section 254, of the Constitution further provides for the establishment
of the Zimbabwe Anti-Corruption Commission, as an independent
body, with a wide array of powers and functions, including
investigating and exposing cases of corruption; combatting corruption,
theft, misappropriation, abuse of power and other improper conduct;
and making recommendations to the Government and other
persons on measures to enhance integrity and accountability and
prevent improper conduct in the public and private sectors. It can even
direct the Commissioner-General of Police to investigate cases of
suspected corruption, and to report to the Commission on the results
of any such investigation, and the former is mandated to comply with
such a directive.
b. Prevention of Corruption Act, (Chapter 9:16)
This Act is the primary legislation that deals with corruption in

Zimbabwe. It is divided into four parts. Part I deals with preliminary
issues, which include definitions. Part II covers the activities that are
considered corrupt, offences committed by public officers in the course
of exercising their duties and competent verdicts. Part III deals with
investigation of claims arising from dishonesty or corruption. Part IV
covers general issues, such as prevention of victimisation.
c. Criminal Law (Codification and Reform) Act, Chapter 9:23
Chapter IX of the Criminal Law (Codification and Reform) Act deals

with bribery and corruption. The principal – agent model is retained in
this Act. Sections 169 – 175 add on to the offences outlined in the
Prevention of Corruption Act. The specific additions include expansion
of the definition of an agent to include a person who voluntarily
manages the affairs or business of another person or takes care of the
property of another person without the knowledge or consent of that
other person.95 Section 174 provides for the crime of criminal abuse
of duty by a public officer. This provision reads like section 4 of the
Prevention of Corruption Act.
2.21 PLANNED BANKRUPTCY
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Bankruptcy, by definition, is when a debtor is declared - either by

creditors or his own account - legally insolvent. His property is
liquidated and divided among his creditors to pay his debts. But when
a debtor falsely claims bankruptcy, attempts to conceal his assets,
launches petition mills or files multiple claims, he is committing
bankruptcy fraud - a federal offense.
Types of Bankruptcy Fraud
Concealment of assets, petition mills, and multiple filings are the most
common types of bankruptcy fraud.
I. CONCEALMENT OF ASSETS
Concealment of assets accounts for nearly 70 percent of all fraudulent

bankruptcy cases filed by individuals. This type of fraud occurs when a
person purposely fails to list every one of his assets on his bankruptcy
claim, knowing that creditors cannot liquidate valuables of which they
are not aware. Similarly, business owners frequently conceal assets
when filing for bankruptcy - they transfer money or properties to their
relatives’ or associates’ names so that the assets cannot be
confiscated.
2. PETITION MILLS
Petition mills - schemes that claim to help keep financially strapped

tenants from eviction - are on the rise, particularly in urban
neighborhoods with high immigrant or poor populations. However,
without informing the tenant, the typing service instead files
bankruptcy in the tenant’s name. It then charges outlandish fees and
drags the case out for months. While the tenant thinks he’s getting
much-needed help, the typing service is draining his savings, ruining
his credit, and merely postponing his inevitable eviction.
3. MULTIPLE FILINGS
Lastly, multiple filings take place when individuals file for bankruptcy
in more than one state, using their real names and information (such
as Social Security numbers), false names and information, or a
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combination of the two to file the claims. The filers tend to list the
same assets on each fraudulent claim but deliberately fail to include
every asset. This, like concealment of assets, fraudulently protects
their valuables from total liquidation when debts are paid.
2.22 DEALING WITH PROPERTY OBTAINED THROUGH CRIME
Zimbabwe has enacted a piece of legislation for dealing with property

obtained through crime that is the Money Laundering and Proceeds of
Crime Act chapter 9:24/2013
This Act provides for the suppression of the abuse of the financial
system and enables the unlawful proceeds of all serious crime and
terrorist acts to be identified, traced, frozen, seized and eventually
confiscated. The Act facilitates obtaining of forfeitures orders on
tainted properties and a pecuniary penalty order against a person in
respect of any benefit derived by the person from the commission of
the offence. This is done through an application by the Attorney
General not later than six months after the conviction of the person.
The Act has extra-territorial application as regards pecuniary penalty
orders, which apply to property that comes into the possession, or
under the control of a person, whether within or outside Zimbabwe
and benefits that accrue to a person whether within or outside
Zimbabwe.
In reference to corruption, this Act is useful in recouping losses

suffered by the principal as a result of the agent's corrupt activities. It
complements the Criminal Code and the Prevention of Corruption Act
by providing for confiscation of not only the property used in the
commission of crime but also benefits derived from the commission of
the crime itself. Proceeds of a crime taken outside the country may
thus be tracked and be subject to forfeiture.
2.23 INVESTMENTS SCAMS
These are fraudulent scams which try to persuade potential investors

to buy financial products with the prospect of high returns. The
unsuspecting victims will then invest in the business but the fraudsters
will disappear after collecting substantial amounts of money. The two
most common investment scams are Ponzi schemes and Pyramid
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schemes. Other investment scams include futures trading fraud, hedge

fund fraud, broker fraud and commodities fraud.
a Ponzi Scheme
A ponzi scheme is a fraudulent investment scam that pays returns to

investors from their own money or from money paid in by subsequent
investors, rather than from any profit it actually makes. Ponzi scheme
organisers often solicit new investors by promising to invest funds in
opportunities claimed to generate high returns with little or no risk.
The schemers may pay returns for a short period of time and this
payment is done to trick new investors and to fool existing investors
into believing their investments are safe and secure. The scheme
generally falls apart when the operator flees with all of the proceeds or
when a sufficient number of new investors cannot be found to allow
continued payment of dividends.
b Pyramid Scheme
A pyramid scheme requires new investors to become involved in

marketing a new product or recruiting other investors. The emphasis
of this scheme is not on the product being marketed, but rather on the
recruitment of new investors. The product is purportedly marketed to
cover up the pyramid scheme. The fees provided by the new entrance
are used to pay those who previously entered the pyramid scheme. A
pyramid scheme is a fraudulent investment scam which pays returns
to investors from money which is paid by subsequent investors. It is
structured in such a way that the initial schemer must recruit other
investors, who in turn will continue to recruit other investors. The
pyramid scam exploits the trust and friendship that exists in groups of
people who have something in common. Because of the close
relationship amongst groups, it can be difficult for regulators or law
enforcement officials to detect a pyramid scam. Victims often fail to
notify authorities or pursue their legal remedies and instead try to
work things out within the group.
Characteristics of investment fraudsters
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1. The swindler wants to be your friend- the pretend to listen to your

problems and to care about you. However the friendship ends soon
after they get your money.
2. They will not fully identify themselves.
3. They use high-pressure sales tactics. If they sense that you will not
be an easy sell, the swindler shifts to hard sell approach. They
question your intelligence or warn you that you will never get rich
without taking a chance.
4. A demand for an immediate decision-they always seem to have an

answer for any question you may have regarding the investment. If
you show any hesitation, swindlers often insist that you should or
must take your decision instantly.
5. They refuse to provide written information or references that you

may contact.
6. They will request personal information such as date of birth, full

name and/your bank account details
2.23.1 Prevention/ Precautionary measures
1. Watch out for warning signs. Be cautious and think twice if you
hear such phrases as, “Your profit is guaranteed, it’s an
amazingly high rate of return, there is no risk, etc”.
2. Check the product. You can check to see if the investment

opportunity is registered by contacting the regulatory
authorities. If your potential investment is not properly
registered, it will be wise not to invest.
3. Avoid high return “risk free” investments. Be extremely careful

of any investment that is said to have no risks because very few
investments are risk free. The greater the potential return from
an investment, the greater your risk of losing money. Promises
of fast and high profits, with little or no risk, are classic warning
signs of fraud.
4. Get it in writing. Be sceptical of any investment opportunity that

is not in writing. Fraudsters often avoid putting things in writing
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but legitimate investments are usually in writing. You should also

be suspicious if you are told to keep the investment opportunity
confidential.
5. Take your time. Do not be pressured or rushed into buying an

investment before you have a chance to think about or
investigate the proposal. Just because someone you know made
money, or claims to have made money, doesn’t mean you will
too.
6. Look on the internet to see what information is available on the

financial institution. Try entering some basic search terms such
as the name of the financial institution or a key manager or
director to see what information you can find.
7. Obtain independent financial advice before making a final

investment decision.
2.24 ADVANCE FEE FRAUD
An advance fee refers to an upfront payment by the victim to the

fraudster, to allow the victim to take part in a much larger
financial transaction which he believes will either bring him a
profit or will result in credit being extended to him.
The victim pays money to someone in anticipation of receiving

something of greater value- such as a loan, contract,
investment, or gift, and then receives little or nothing in return.
2.24.1 Forms of Advance Fee Fraud
a. The Lottery scam
The victim is informed that he has won a lottery prize or legacy.

The scammer then informs the victim that releasing the funds
requires some small fee (for insurance, registration, processing).
Once the victim sends the fee, the scammer invents another fee.
The scammer will eventually disappear after receiving substantial
amounts of money.
b. Bogus scholarships and bogus employment agencies
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Fraudsters advertise in the local media about prospective

scholarships for university students and prospective employment
opportunities in foreign countries. The prospective students or
job seekers are required to pay processing fees into the
fraudsters’ bank accounts. The fraudsters will then disappear
after collecting money from several people.
c. Internet dating
The scammer and the victim meet online, often through internet
dating or employment site. The scammer arranges for a meeting
with the victim. However before the meeting, the scammer
claims to be in a bad situation such as getting involved in an
accident, being arrested, falling prey to robbers and failure to
pay hotel bills. The scammer asks for money to get out of the
bad situation. After receiving the required money, the scammer
will then disappear.
2.24.2 Precautionary measures
a. Know the person whom you are dealing with. Make sure you
fully understand any business agreement that you enter into.
b. Be wary of people who contact you using cell phones rather that
official land lines.
c. Under no circumstances should bank or personal information be

passed to unknown persons.
d. Banks should exercise caution when attending to customers who

produce documents which they claim to have been received from
lottery winnings and prize funds.
e. Reject any proposal to send money to any person/ organisation

which promises large amounts of cash/winnings/funds.
2.25 Procurement Process and Related Offences

Procurement refers to the acquisition by any means of goods
construction work and services. Procurement is one of the areas in
business which is highly prone to criminal activities such as corruption.
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In Zimbabwe, procurement is governed by the Procurement Act

[Chapter 22:14] of 1999 and The Procurement Regulations S.I. 171 of
2002. The Procurement Act provides for the establishment of the
Procurement Board whose functions are:
 To conduct procurement on behalf of procurement entities.

 To supervise procurement proceedings conducted by procuring
entities, in order to ensure proper compliance with this Act.
 To initiate investigations.
Procurement Committees
Section 14 of the Procurement regulations provides for the creation of

procurement committees which are headed by the accounting officer.
The procurement committee shall be responsible for the procurement
of goods and services. The accounting officer shall advise the board of
the composition of the procurement committee and furnish the board
with their specimen signatures.
Types of Tender
Competitive quotations
Is used where a procuring entity requires the supply of goods,
construction works or services the value of which equals or is less than
$10 000. The procurement entity invites tenders or letters of
quotations from likely tenderers through newspaper advertisements
and at least three competitive quotations are required from suppliers.
The letters of quotation will be entered on a comparative schedule
prepared by the accounting officer. The procurement Committee
makes a recommendation which is approved by the Accounting Officer.
The accounting officer will record his decision on the comparative
schedule and the schedule will be retained by the department for audit
purposes. A copy will be forwarded to the Procurement Board.
Informal Tender
gari@buse.ac.zw Friday, 4 November 2016
Occurs where a procuring entity requires goods or services, the value
of which exceeds $10 000 but does not exceed $500 000 for goods
and services and $2 million for construction. The procuring entity
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invites tenders through newspaper advertisements. The Procurement

Committee shall be responsible for adjudicating tenders and making
recommendations to the Accounting Officer. Accounting Officer shall
record his decision on the comparative schedule, retain a copy and
transit another copy to the Board.
Special Formal Tender

The procuring entity seeks approval from the Procurement
Board or the Chairman to approach certain companies for quotations.
The quotations are received by the Procurement Board. However the
tenders will be forwarded to the procuring entity for evaluation.
Special formal tenders may be invited only in the following cases:
 Urgent requirements where time does not permit the invitation of
tenders by advertisement in the government gazette.
 Supplies and services of local interest only
 Requirement of a proprietary nature and where names of likely
suppliers are known
 Formal tenders for which there has been no response and where it
is necessary to re- invite tenders
 Services which in the opinion of the board are of specialist nature
 Services which in the opinion of the board concern national
security.
Formal Tender Procedure
The principal officer calls for tenders, stating the place and the
latest day and time up to which tenders will be received. All notices of
formal tender will be published by the principal officer
in the Government gazette and in such national newspapers as
the board may deem expedient. To enable the Principal Officer to
prepare the tender advertisement, the procuring entity shall supply the
following details:
i. A concise description of the supplies or services required

ii. The designation and full postal address of the officer from
whom tender documents and further particulars are obtainable
iii. The proposed fee payable for tender documents
iv. Suggested closing date for receipt of tenders by the board, and
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v. The names of newspapers in which it is suggested that tenders

should be advertised.
Opening of Formal Tenders
Tenders received will be opened by the Principal Officer in the

presence of the Chairman or any person delegated by the Chairman
and tenderers or their authorised representatives, at the expiry of the
time advertised. Each tender and all price annexures will be
authenticated with the signature and name of the opening officer and
the date of opening. Tenders received either open or without tender
numbers on the cover shall, after the tender reference has been
ascertained, be sealed and a note shall be made on the envelope.
Procedure after opening
After opening, tenders will be forwarded to the head of the

procurement department. The procuring department will then make
some recommendations, stating the reasons for
recommending specific tenders and reasons for rejecting specific
tenders. The head of the procuring entity shall prepare a comparative
schedule in triplicate showing the tender prices, as well as a summary
of recommendations. In evaluating the tenders, the procuring entity
will assess the tenderer’s capability to perform the contract
satisfactorily and considers the following
factors:
a. Capability to supply
b. Personal capabilities
c. Equipment capabilities
d. Financial position
e. Litigation history
Decision to award Tender
All these recommendations will be forwarded to the procurement board

and the Board will direct which tender to accept. The procuring entity
will then be advised of the Board’s decision within 10 working days
after sending the recommendations.
The successful tenderers will be notified in writing by the Board of the
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tender acceptance. Unsuccessful tenders will be advised in writing of

the name of the successful tenderer and the amount
of his/tender by the board.
Offences relating to Procurement
Section 48 of the Procurement Act provides that; if any

supplier or any person acting or purporting to act on
behalf of a supplier
a. Knowingly misrepresents any material fact in a tender

bid or proposal submitted in any procurement
proceedings; or
b. Enters or attempts to enter into collusive agreement or

arrangements, whether enforceable or not, with any
other supplier whereby the prices quoted in their
respective tenders, bids or proposals are or would be,
as the case may be, higher than would have been the
case had there been no collusion between suppliers
concerned, shall be guilty of an offence.
Section 39 provides that Bribery, Fraud or Collusion

in the tender process will result in the procuring
entity rejecting the tender.
Section 40 of the Procurement Act provides that

failure to disclose interest by members of State
procurement Board or Committee will render the
contract void.
Section 35 of the Procurement regulations provides

that any person who contravenes any provisions of
the regulations shall be guilty of an offence.
Challenges With Tackling Procurement Fraud
Difficulty in detecting fraud-The complex and diverse nature of procurement fraud means
it is difficult to detect. This highlights the importance of whistle-blowing as a service for
staff and members of the public to report suspicions of fraud.
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Difficulty in measuring procurement fraud-Given the challenges of detecting

procurement fraud, there can be little confidence that detected cases reflect the true extent
of the threat. In both the public and private sector, accurate losses to procurement fraud
remain unknown. As with other fraud, procurement fraud goes undetected, unreported,
and therefore unmeasured. The challenge remains to gain an accurate measure of
procurement fraud losses in the public sector.
Lack of consistent and proactive risk assessment-Awareness and understanding of the

nature of procurement fraud forms the basis of preventing this type of fraud. Absence of
awareness and understanding amongst procurement specialists as well as the supplier
market. Risks are considered, but these are mainly focused on the ability to deliver the
project to time, cost and quality, rather than specifically identifying and mitigating fraud
risks. A lack of awareness and understanding creates an environment where procurement
fraud can flourish. If public bodies are not considering the risk of fraud before they
embark on procurement, then procurement fraud can go undetected.
Absence of procurement fraud strategy-Where procurement fraud is tackled in

the public sector, it is generally through a traditional enforcement
model of investigation, prosecution and sanction. While it is important
to punish fraudsters, this approach is time consuming, expensive and
often does not result in conviction or recovery of lost funds. What is
required is a consistent and comprehensive strategy involving all
elements of a counter fraud response including prevention, detection,
disruption, investigation and sanction.
By I Mugari, imugari@buse.ac.zw Friday, 4 November 2016
ACTIVITY 3.1
1. Explain Stock market manipulation and other securities related offences

2. Define Criminal breach of trust
3. Outline Custom and excise offences
4. Explain Secret commissions
5. Discuss Planned bankruptcy
6. Possession of goods obtained by crime.
7. Discuss Ponzi Scheme and Pyramid scheme.
8. Critically analyse procurement process and possible offences.
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UNIT FOUR
CYBER (ELECTRONIC) FRAUD

4.0 INTRODUCTION
This unit will computer related commercial crime namely Hacking,

Fraud, Paedophiliac rings, Online Child Sexual Abuse Investigation,
Defamation, Immigration fraud, Narcotics trafficking, Credit card
cloning, Software piracy and others.
OBJECTIVES
1. Define Cyber Crime.
2. Identify and Explain Typologies of Cyber Crime.
3. Describe Cyber Crime Scene Attendance and documentation.
4. Explain interviewing of occupants.
5. Summarise the seizure and seizure principles.
6. Outline the packaging and transporting of electronic evidence.
7. Describe the storage electronic evidence.
8.
The growth of the Internet has improved our economy, medicine and
technology. Unfortunately, it has brought new opportunities for
criminal activity, as well. Often, people think cybercrime simply refers
to hacking, viruses and other intrusion tactics. Cybercrime, however,
threatens more than our businesses, economy or national
infrastructure. Cybercrime affects us individuals, as well.
Reprehensible crimes, such as child pornography and cyber stalking,
terrorize our children and our families.
4.1 DEFINITION OF CYBER CRIME
Cyber-crime is the use of internet, computers and related technologies

in the commission of a crime (Maras 2015).
Wall (2005b), asserts that cybercrimes involves 'computer related',

such as internet scams perpetrated by fraudsters in collusion with
spammers, tend to be relatively minor in individual outcome, but
serious by nature of their volume. 'Computer content' crimes, on the
other hand, mainly tend to be informational and while they are often
extremely personal and/or politically offensive, they are not
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necessarily illegal. But they could contribute subsequently to the

incitement of violence or prejudicial actions against others. In
Zimbabwe Section 164b of the Cyber and Data Protection Act Chapter
17:12 that came into effect in 2021 are used to punish the offenders
of cyberbullying.
4.2 TYPOLOGY OF CYBER CRIMES
4.2.1 Hacking
Hacking is unauthorised intrusion into computers (Maras 2015).

Hacking is an act committed by an intruder by accessing your
computer system without your permission. Hackers (the people doing
the ‘hacking’) are basically computer programmers, who have an
advanced understanding of computers and commonly misuse this
knowledge for devious reasons. They’re usually technology buffs who
have expert-level skills in one particular software program or
language. As for motives, there could be several, but the most
common are pretty simple and can be explained by a human tendency
such as greed, fame, power, etc.
Some people do it purely to show-off their expertise – ranging from

relatively harmless activities such as modifying software (and even
hardware) to carry out tasks that are outside the creator’s intent,
others just want to cause destruction. Greed and sometimes
voyeuristic tendencies may cause a hacker to break into systems to
steal personal banking information, a corporation’s financial data, etc.
They also try and modify systems so that they can execute tasks at
their whims.
Hackers displaying such destructive conduct are also called “Crackers”

at times. They are also called “Black Hat” hackers On the other hand;
there are those who develop an interest in computer hacking just out
of intellectual curiosity. Some companies hire these computer
enthusiasts to find flaws in their security systems and help fix them.
Referred to as “White Hat” hackers, these guys are against the abuse
of computer systems. They attempt to break into network systems
purely to alert the owners of flaws. It’s not always altruistic, though,
because many do this for fame as well, in order to land jobs with top
companies, or just to be termed as security experts. “Grey Hat” is
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another term used to refer to hacking activities that are a cross

between black and white hacking.
Some of the most famous computer geniuses were once hackers who
went on to use their skills for constructive technological development.
Dennis Ritchie and Ken Thompson, the creators of the UNIX operating
system (Linux’s predecessor), were two of them. Shawn Fanning, the
developer of Napster, Mark Zuckerberg of Facebook fame, and many
more are also examples. The first step towards preventing hackers
from gaining access to your systems is to learn how hacking is done.
Of course it is beyond the scope of this Fast Track to go into great
details, but we will cover the various techniques used by hackers to
get to you via the internet.
4.2.2 Fraud
According to section 136 of the Criminal Law (Codification and Reform

Act), Chapter 9:23 any person who makes a representation-
(a) Intending to deceive another person or realising that there is real

risk or possibility of deceiving another person,
(b) intending to cause another to act upon the misrepresentation to his

or her prejudice, or realising that there is a real risk or possibility that
another person may act upon the misrepresentation to his or her
prejudice, shall be guilty of fraud if the misrepresentation causes the
prejudice to another person or creates a real risk of possibility that
another person might be prejudiced.
Fraud is falsely representing a fact, either by conduct or by words or

writing to induce a person to rely on the misrepresentation and
surrender something of value (Maras, 2015).
4.2.3 Paedophiliac Rings
A paedophile is a person with a psychiatric disorder that predisposes

him or her to be exclusively sexually attracted to pre-pubescent
children. However, not all child sexual offenders are paedophiles as
some offenders may abuse children, as they may any other person and
not necessarily because they may not have a psychiatric disorder.
Paedophilia is not a foreign practice.
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Paedophilia and child sexual offences are common in Zimbabwe than

we really know or are honest enough to admit. Indeed, the incidents of
sexual crimes against children are growing because of the huge
numbers of orphans and other vulnerable children in our communities
and the impact of poverty and cramped living conditions. Paedophiles
and child sex offenders have always lived among us anonymously and
even protected. Only when one of them is caught and the story is
published are we publicly shocked all over again and call on the police
and judiciary to do something about it.
Paedophile ring is a group of people who take part in illegal sexual

activity involving children (Collins English dictionary).
Paedophilia is one form of child sexual abuse - a paraphilia, or

compulsive responsiveness to an unusual and personally or socially
unacceptable stimulus. The essential elements of paedophilia,
according to the reputable Diagnostic and Statistical Manual of Mental
Disorders (D.S.M.II) are:
‘the act or fantasy of engaging in sexual activity with pre-pubertal

children as a repeatedly preferred or exclusive method of achieving
sexual excitement... Isolated sexual acts with children do not warrant
the diagnosis of Paedophilia’ (cited in Sturgess, 1985).
According to this definition, the essence of paedophilia is the

recurrence of sexual excitement associated with children. Thus it
would apply to the person who repeatedly uses child pornography to
obtain sexual excitement, but not to the incestuous parent who has
repeated sexual contact with a child as a form of rape of or revenge on
the spouse or partner. It would apply to the person who fantasises in
solitude, but not to the person who occasionally abuses a child
sexually in the course of obtaining material for child prostitution or the
pornography market.
The diagnostic definition, however, has its own limits. Such delineation
may be useful for the psychologist or clinician who is treating an adult
who has been involved in an apparently paedophilic relationship, but
depends too closely on the attitudes and beliefs of the perpetrator to
be particularly useful for child protection.
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The act of paedophilia thus colloquially at least became the art or act
of man-boy sex (Lansdown, 1984). Like the psychological definition,
however, this omits too many aspects of paedophilia to be entirely
adequate for preventative purposes. Paedophilic interests may occur
among post pubescent adolescents as well as adults, either male or
female, though they are rare in women. Paedophile contacts may be
homosexual, heterosexual, or occasionally bisexual, and may involve
real or fantasized contact (Hunter 1990: 3-8; Money 1991:461).
Paedophiles may exhibit a preference for female or male children, or

both. The majority of victims, however, are female in a ratio of 2:1.
Where the contact is heterosexual most victims fall between the ages
of 6 and 12years, peaking at between 8 and 11 years, while the peak
ages of victims of the same sex fall between 12 and 15 years
(Wakefield & Underwager et al 1988:247). Actual sexual penetration is
infrequent. To this extent, paedophilia is no more dangerous, and may
be less traumatic than some other forms of child sexual abuse.
Definitions of paedophilia may or may not include man/post-

pubescent/ adolescent boy relationships, otherwise known as
ephebophilia. Puberty, however, provides a generally accepted
differentiation point for victims which are not reliant on concepts more
difficult to pin down, such as the mental age of the child and the
child's sexual rights at a particular age. The pre-pubescent child has
no real sexual frame of reference within which he or she can interpret
the sexual behaviour of an adult; the adolescent has. The 'social
taboos' also tend to operate more rigorously in the protection of pre-
pubescent children. Pre-pubescent children in our society are generally
not considered able to make an informed choice about sexual matters,
whereas the exploratory sexuality of adolescents, on
the other hand, means that the issues of consent and harm in a
relationship with an adult (See Fierman 1990) are more easily
blurred.
Wilson's book about Clarence Osborne, the homosexual who boasted

some 2500 conquests amongst the young teenagers he favoured
(Wilson 1981), makes the difficulties of dealing with this type of
situation frighteningly clear. Though Osborne was a homosexual
ephebophile rather than a paedophile, the difference between him and
most paedophiles was a matter of skill, not of ethics. Osborne was not
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caught because of any complaint from the young boys with whom he
had a relationship. Many if not most of them appear to have had a
genuine regard for the man and some at least were extremely grateful
for the interest he took in them and the help he gave. Osborne gave,
as well as received, sexual satisfaction - he paid his boys in a coin
certain to bring them back to him. But at the same time he was
constantly trolling for new lovers, dropping them quickly and
mercilessly ('I simply denied them sex') when he tired of them.
Osborne's not inconsiderable skills in this regard would have made him
the perfect go between for organised recruitment of youngsters had he
been less of a ‘loner’; and for this reason alone the Osbornes of this
world cannot be ignored.
Responsible parents for many years have therefore attempted to arm

their children with warnings about 'stranger danger', especially
strangers offering rides, gifts or interesting activities likely to draw the
child away from the safe and familiar. More knowledgeable parents
and, in recent years, educational authorities have instructed children in
protective behaviours such as 'good touch, bad touch' and 'it's all right
to say “no”’. Yet increasingly we are realising that, while few children
today are likely to accept lifts and sweets from strangers, sexual abuse
of children in our society continues to be a problem of apparently
enormous, though relatively uncharted, scope, against which children
appear to have few defences.
One of the main reasons undoubtedly is our propensity to confuse

stereotypes with definitions. Perpetrators of child sexual abuse are not
necessarily dirty old men. Many in fact are relatively young, some in
their teens. They may be apparently respectable and respected
members of the community. Though a very high percentage of
offenders are male, some are female. Much child sexual abuse occurs
in situations in which we assume children are safe - at home, at
school, in care or in an otherwise familiar environment. Clearly, we
need to rethink the techniques on which we have relied for the
protection of our children.
Understanding the motivation for and characteristics of an abusive act

is critically important to society's ability to prevent, contain and control
child abuse of any kind. In particular, our ability to protect our children
requires us to appreciate the different circumstances which may lead a
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child into danger of sexual abuse, and the differences between the
modus operandi of a genuine paedophile and the conditions which may
give rise to other forms of child sexual abuse. In a strictly pedantic
sense, while the word ‘paedophile’ may be used loosely to include any
adult having sexual contact with a child, active paedophiles are an
extreme, compulsive form of child sexual offender: they troll for
victims, they stalk, they become experts in the identification and
attraction of potential victims and they almost invariably feel a need to
move on to new conquests. They may even enter into a marriage, to
gain access to the children. They are found at all levels and in all
classes of society.
Paedophilia is currently recognised as a global problem which police

forces generally are finding extremely difficult to combat. This must be
attributed in some part at least to police and judicial practices, which
are of necessity circumspect and make it difficult to investigate
allegations of paedophilia. The nature of the offence also means that
to obtain sufficient evidence for conviction is often a very time-
consuming and arduous task. The result is that the cases of
paedophilia which come to public attention, and on which the general
public builds its attitudes towards paedophilia, are very few and tend
to be the extreme and often horrific ones. The serious cultural taboos
in many societies against sexual relationships with children,
paradoxically, add to the difficulty of pursuing a case through the
judicial system. Among a large proportion of the population and even
among the most conscientious police, for social and possibly even
subconscious cultural reasons paedophilia may be a hidden problem,
the parameters of which are not well known or, if known, not easily
admitted (Sereny1984,119-25).
Partly, of course, the difficulty of combatting paedophilia also lies in

the nature of young children: their physical and emotional vulnerability
to adult power, their sensitivity to warmth and affection, their intense
loyalty to those they regard as friends and their frequent lack of
certainty about what is right and wrong. Where these intrinsic
components of childhood are exploited by an adult for the satisfaction
of an adult sexual need, beyond the child's experience, the capacity for
long-term damage to the child is enormous. On the other hand, the
actions of some paedophiles are so calculated, repetitive and violent
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oppressively or flagrantly exploitatively towards their young victim or

victims and may cause· their death.
Measures to curb to Paedophiliac Rings
Section 70 of the Criminal Law Codification and Reform Act Chapter

9.23 deals with sexual offences against minors. All the children below
the age of 12 are completely incapable of consenting to sexual acts.
Convicted child sex offenders are imprisoned up to 10 years.
Section 87 penalises adults who expose children to prostitution and

related activities. Parents and guardians are strictly prohibited from
letting their children associate with prostitution or letting them enter
brothels or reside in them.
Establishment of Victim Friendly courts-the courts are not exclusively

for children, adult victims and witnesses equally qualify if the need
arises.
Section 13 of the Censorship and Entertainment Control Act strictly

prohibits the distribution of pornographic material in any form.
4.2.4 Online Child Sexual Abuse
Child exploitation includes the manufacture, possession and

distribution of child pornography, child sexual molestation, child sexual
abuse, enticement of children for sexual acts, child prostitution and
sex tourism.
According to Article 1, Convention on the Rights of the Child (CRC),

United Nations 1989, a child is any human being under the age of 18
years, unless under the law applicable to the child, majority is attained
earlier.
Child sexual abuse includes:
a. Engaging in sexual activities with a child who, according to the

relevant provisions of national law, has not reached the legal age
for sexual activities (this does not apply to consensual sexual
activities between minors), and
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b. engaging in sexual activities with a child where use is made of

coercion, force or threats; or abuse is made of a
recognized position of trust, authority or influence over the child,
including within the family; or abuse is made of a particularly
vulnerable situation of the child, notably because of a mental or
physical disability or a situation of dependence.
Child sexual abuse becomes sexual exploitation when a second party

benefits monetarily, through sexual activity involving a child. It
includes harmful acts such as sexual solicitation and sexual
exploitation of a child or adolescent in prostitution, covers situations in
which a child or other person is given or promised money or other
form of remuneration, payment or consideration in return for the child
engaging in sexual activity, even if the payment/remuneration is not
made. Although the terms are sometimes used interchangeably, what
distinguishes the concept of child sexual exploitation from child sexual
abuse is the underlying notion of exchange.
There is no internationally agreed definition of online child sexual

exploitation and abuse. For the purposes of this document, the term is
used interchangeably with ‘technology-facilitated child sexual
exploitation and abuse’ to refer to child sexual exploitation and abuse
that is partly or entirely facilitated by technology, that is the internet
or other wireless communications. For example, child sexual abuse
takes on an online dimension when, for instance, acts of sexual abuse
are photographed or video-/audio recorded and then uploaded and
made available online, whether for personal use or for sharing with
others. Each repeated viewing and/or sharing of such recorded
material constitutes a new violation of the rights of the child.
Forms of child sexual abuse and exploitation
The terms ‘sexual violence against children’ or ‘child sexual abuse and
exploitation’ include diverse acts of abuse, in different settings and
relationships. This can include situations where a child is:
 Sexually abused by a relative or carer at home,
 Raped by an intimate partner,
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 Made to, or left with no option but to, sell sex in exchange for food,
cash or favours
 Sexually assaulted on the way to, or at, school by an adult, a gang

or a peer living in the community,
 Sexually abused by an adult in a position of trust or authority such

as a pastor, police officer, care worker or sports coach,
 Groomed or sexually exploited online,
 Trafficked within or across borders for the purpose of sexual

exploitation,
 Raped by a combatant or peacekeeper in the context of war,

displacement, or disaster.
4.2.5 Defamation
An offence in which a person damages an individual reputation “by

making public statements that are both false and malicious (Maras
2015). It is an act of injuring person’s reputation by any slanderous
communication, written or oral, the wrong of maliciously injuring the
good name of another. (Oxford Dictionary, 2019), It is an act of
denouncing.
According to Section 96 of the Criminal Law (Codification and Reform

Act Chapter 9.23:
1. Any person who, intending to harm the reputation of another

person, publishes a statement which
a. when he or she published it, he or she knew was false in a

material particular or realised that there was a real risk or
possibility that it might be false in a material particular; and
b. causes serious harm to the reputation of that other person or

creates a real risk or possibility of causing serious harm to that
other person’s reputation;
Shall be guilty of criminal defamation and liable to a fine up to or

exceeding level fourteen or imprisonment for a period not exceeding
two years or both.
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2. In deciding whether the publication of a statement has caused

harm to a person’s reputation that is sufficiently serious to
constitute the crime of criminal defamation, a court shall take
into account the following factors in addition to any others that
are relevant to the particular case
a. the extent to which the accused has persisted with the

allegations made in the statement;
b. the extravagance of any allegations made in the statement;
c. the nature and extent of publication of the statement;
d. Whether and to what extent the interests of the State or any

community have been detrimentally affected by the publication.
3. Subject to subsection (4), a person accused of criminal

defamation arising out of the publication of a statement shall be
entitled to avail himself or herself of any defence that would be
available to him or her in civil proceedings for defamation arising
out of the same publication of the same statement.
4. If it is proved in a prosecution for criminal defamation that the

defamatory statement was made known to any person, it shall
be presumed, unless the contrary is proved, that the person
understood its defamatory significance.
4.2.6 Immigration Fraud
Immigration fraud is generally grouped into two types:
a) Immigration-related document fraud.

b) Immigration benefit/qualification fraud.
Immigration-related document fraud
includes the counterfeiting, sale, and/or use of identity documents or

“breeder documents” (i.e., documents used to confirm identity, such
as birth certificates or Social Security cards), as well as alien
registration documents and stamps, employment authorizations,
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passports, visas, or any documents used to circumvent immigration

laws.
Benefit/qualification fraud
Encompasses the willful misrepresentation of a material fact to qualify

for a status or benefit under immigration law in the absence of lawful
eligibility for that benefit. Examples of benefit fraud include entering
into a sham marriage in order to claim to be the spouse of a
Zimbabwean citizen; or falsely claiming to have been living in
Zimbabwe continuously for the requisite time required for
naturalization.
“benefit fraud” involves misrepresentation of a material fact to

qualify for a specific immigration status or benefit. Some view
immigration fraud as a continuum of events or overlapping crimes
because people may commit document fraud en route to benefit fraud.
The types of fraud investigations range in circumstances and scope.
Many fraud investigations focus on facilitators, i.e., individuals who
sell, distribute, or manufacture counterfeit or altered documents, and
on organizations that broker large scale illegal schemes such as sham
marriage rings (Zimbabweans married Nigerians) or bogus job offers.
Investigations of immigration benefit applications are another major
activity.
The types of fraud investigations range in circumstances and scope.

Many investigations focus on facilitators (i.e., individuals who sell,
distribute, or manufacture counterfeit or altered documents), and on
organized crime syndicates that broker large-scale illegal schemes
such as sham marriage rings or bogus job offers. Investigations of
immigration benefit applications are another major activity.
4.2.7 Narcotics trafficking
Transnational narcotics trafficking is characterized by a high degree of

complexity and a multiplicity of actors all along the commodity chain
from points of cultivation to target markets, and its monumental scale
“…implies complex transnational communications and transport, which

suggests protection (or tolerance) from national- and international-
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level police, military, and transportation authorities” (Bailey and

Godson 2000).
Additionally, the degree to which state actors will be co-opted or

removed is also highly dependent on previous modes of political
organization; in countries with political systems marked by high
degrees of informality, facilitation of criminal enterprises can become
rapidly integrated into the political strategies of elites and office
holders.
It is important to recognize that in many African countries political and

economic power is exercised outside of the formal realm. Political
systems in Africa exhibit high degrees of clientalism, patronage, and
rent-seeking on the part of state actors: acquisition of positions within
the state apparatus is the result of informal patron-client relationships,
and these positions are used primarily to appropriate resources that
can be used to strengthen one’s political and economic power (Medard
2002).Narcotics trafficking also has high social costs outside of the
corruption of the public sphere. Increased distribution and abuse of
narcotics are often seen in both production and transit states, bringing
a host of other problems such as larger domestic criminal groups,
lower economic productivity, and higher rates of drug addiction and
dependence (Williams 1994).
Narcotics that are trafficked through a series of transit states

inevitably affect governance, security, and development, even if these
states are neither narcotics- producing nor narcotics-consuming
countries. Where political and economic power are run through
informal, and sometimes illegal, channels in a resource scarce
environment characterized by intense competition, massive sums of
money from narcotics trafficking may be quickly regarded as an
opportunity for the accumulation of resources, and concurrently,
political power.
Zimbabwe is witnessing an increase in problematic drug use among its

domestic population along with the related public health issues that
accompany certain types of drug use. The substances that are
commonly used in Zimbabwe include alcohol, cannabis, heroin, glue
and cough mixtures such as histalix and broncleer. Cannabis (mbanje)
remains the most popular illicit drug mainly because it is grown locally
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or smuggled in from neighbouring countries like Malawi and

Mozambique. In some societies along the Zambezi, mbanje is grown
and consumed in large quantities as a way of life and therefore the
drug finds their way into other parts of the country.
Drugs also come through Zimbabwe on their way to other countries in

the region the region such as South Africa. Local Zimbabweans are
used to transport these drugs and rather than being paid in cash, they
are usually paid in drugs which enter the local market. “When you
become a transit country, you are immediately also a consumption
country”, Gilberto Gerro of the UN-ODC concluded.
Young people in Zimbabwe have been identified as the most

vulnerable section of the population, especially those from poor or
unstable backgrounds who may be tempted to see drugs as an escape
from life’s troubles.
Zimbabwean drug laws do not adequately address issues surrounding

drug use/misuse-particularly prevention and treatment. The
Dangerous Drugs Act (Chapter 15) in conjunction with the Criminal
Law Codification and Reform Act, Chapter 9:23 has not kept up to date
with current thinking on how to tackle drug-related issues. The
possession, use and trade in drugs is harshly punished in Zimbabwe.
Drug trafficking is also treated harshly. For instance, a case of a South
African woman who was arrested at Harare Airport trying to smuggle
2kg of cocaine from Colombia to Zimbabwe was sentenced to 15 years
in jail.
4.2.8 Credit card cloning
Credit card cloning is a crime in which an individual obtains, uses, sells

or buys another individual’s credit card information (Maras 2015).
Card cloning involves the production of counterfeit bank debit cards by

criminals after fraudulently acquiring bank debit/credit card
information contained in the magnetic strip of the bank debit card. The
cloning of payment instruments poses a formidable challenge to banks
and consumers. The cloning of credit and debit cards is often referred
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to as skimming. Criminals acquire bank debit card information through

gadgets known as skimmers.
Skimming entails that the magnetic strip on the back of a credit card is
copied using a hand held card reader. Magnetic-stripe card technology
is therefore flawed in the sense that the data stored on the stripe can
be altered by a person who has access to the device which records the
information and the magnetic-stripe credit card can be replicated
(cloned) on a personal computer.
The long-awaited and much-anticipated EMV (Euro pay, MasterCard

and Visa) system aimed at combating credit and debit card fraud has
recently been launched. VISA branded debit cards will contain a special
chip and transactions will be verified, using a four-digit personal
identification number, which will be keyed in instead of the signing of
receipts. The introduction of the EMV bank chip smart card system,
which is to replace magnetic stripe cards with microchip cards, is
aimed at eliminating the risks of unauthorised use.
A smart card is a plastic card based on cryptography with a

microcomputer chip in it, which is swiped at a payment terminal, or
smart card reader that verifies the smart card as being genuine by
sending a random code. This code in turn is responded to by the
microchip, which together with a security access code such as a PIN
(Personal Identification Number), acts as a type of secret key. Smart
card technology therefore refers to the microcomputer-embedded
technology linked to the card rather than to the purpose of the card.
4.2.9 Software piracy
Software piracy, the unauthorized copying of computer software,

poses a significant threat to the computer industry. In recent years,
progress has been made to reduce software piracy. However,
computer software is greatly susceptible to theft and software vendors
worldwide lost a staggering $50 billion due.
Software piracy, the unauthorized copying of computer software,

poses a significant threat to the computer industry. Intellectual
property, such as computer software, is highly vulnerable to theft.
Although, progress has been made in recent years to reduce software
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piracy, losses to software vendors grew by more than $5 billion in

2008, with total worldwide loss over $50 billion to piracy in 2020.
4.2.10 Obscene publication
Section 77 of the Criminal Law (Codification and Reform) Act Chapter

9.23,
Public indecency states that:
1. Any person who
a. indecently exposes himself or herself or engages in any other

indecent conduct which causes offence to any other person in or
near a public place, or in or near a private place within the view of
such other person; or
b. knowing or realising that there is a real risk or possibility that he or

she will be heard, utters or makes use of indecent or obscene
language in or near a public place, or in or near a private place
within the hearing of another person; or
c. sings any indecent or obscene song in or near a public place, or in

or near a private place within the hearing of another person,
knowing or realising that there is a real risk or possibility that he or
she will be heard; or
d. writes or draws any indecent or obscene word, figure or

representation in or near a public place, or in or near a private
place in the view of another person, knowing or realising that there
is a real risk or possibility that such writing or drawing will be seen;
Shall be guilty of public indecency and liable to a fine not exceeding

level nine or imprisonment for a period not exceeding six months or
both.
4.2.11 Perjury
Perjury charges “trans-substantive” in commercial crime. You should

expect these offences to be potentially in play any time a subject of an
investigation testifies or speaks and therefore in virtually every
investigation and prosecution no matter what the underlying legal
violation might be. Perjury is also considered white-collar crimes.
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Although the goal is not necessarily to obtain money or services, these

crime is illegal because they interfere with the proper functioning of
the justice system.
Section 183, of the Criminal Law (Codification and Reform) Act

Chapter 9.23. Perjury states that:
Any person who, in the course of or for the purpose of judicial

proceedings, makes a false statement upon oath, whether the
statement is written or oral.
1. knowing that the statement is false; or realising that there is a real

risk or possibility that it may be false; shall be guilty of perjury and
liable to a fine not exceeding level ten or imprisonment for a period
not exceeding five years or both.
2. For the purpose of subsection (1)
a. a statement may be false by reason of the omission of facts as well

as by the assertion of untrue or incorrect facts;
b. it shall be immaterial that
i. the judicial proceedings concerned are held or will be held before

a court that is not properly constituted or that lacks jurisdiction to
entertain the proceedings; or
ii. the person who makes the false statement is not a competent
witness in the judicial proceedings concerned; or
iii. The statement is irrelevant to or inadmissible as evidence in the

judicial proceedings concerned.
3. Where a person who makes a statement upon oath and

thereafter, upon the same or another oath, makes another
statement which is in substantial conflict with the first
statement, it shall be presumed, in any proceedings for perjury
in respect of the statements, that
a. the person made a false statement, whether or not either

statement has actually been proved to have been false; and
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b. The person knew the falsity thereof; unless the person proves
that when he or she made each statement he or she genuinely
believed that it was true.
4.2.12 Forgery
Section 137, of the Criminal Law Codification and Reform Act

Chapter 9.23;
1. Any person who forges any document or item by
a. making a document or signature which purports to be made by a

person who did not make it or authorise it to be made or by a
person who does not exist; or
b. tampering with a document or item by making some material

alteration, erasure or obliteration; with the intention of
defrauding another person or realising that there is a real risk or
possibility of defrauding another person thereby, shall be guilty
of forgery and liable to
i. in a case of forgery of a public document or item, a fine not

exceeding level fourteen or imprisonment for a period not
exceeding twenty years or both; or
ii. In a case of forgery of a document or item other than a public

document or item, a fine not exceeding level thirteen or
imprisonment for a period not exceeding fifteen years or both.
2. In a case where
a. a person delivers or causes to be delivered a forged document or

item to another person with the intention of defrauding that
person or realising that there is a real risk or possibility of
defrauding that person
i. the competent charges shall be fraud and forgery if the

person delivering the forged document or item or causing it to
be delivered also forged it;
ii. the competent charge shall be fraud if the person delivering

the forged document or item or causing it to be delivered did
not forge it;
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b. A banknote issued by the Reserve Bank of Zimbabwe is forged,

the competent charge shall be that specified in section 42 of the
Reserve Bank of Zimbabwe Act [Chapter 22:15].
4.2.13 Sexual harassment
a. Introduction
Sexual Harassment is an important issue that affects everyone in

the workplace. It doesn't matter whether you are a man or a
woman. You need to understand about sexual harassment. This
course will help you recognize sexual harassment when it
happens. It will also help you examine your own behaviours at
work.
b. What Sexual Harassment is:
Unwelcome sexual advances, requests for sexual favours, and

other verbal or physical conduct of sexual nature that affect an
individual’s employment, unreasonably interfere with an
individual’s work performance, or create an intimidating, hostile,
or offensive work environment (Maras 2015). It is not always
easy to know whether a particular behaviour at work is proper or
not.
c. Identifying Sexual Harassment
Actions that constitute sexual harassment include:
1. Someone exposes himself or herself to you
2. Having to listen to “sex” jokes told by co- workers
3. Having unwelcome comments made to you or about your body,

such as, “hey good-looking”, “hi babe", “You look hot
today!” or “You’ve got a great body”.
4. A family member of one of your clients says you should have sex
with him or lose your job
5. A co-worker grabs or touches you in a sexual way
6. A supervisor says, “If you and I get together for the weekend, I
think that it would help your chances of a promotion”.
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7. A co-worker constantly talks about her sex life. She uses language
that is dirty and embarrassing.
8. Someone in power tries to take sexual advantage of someone who

does not have the same level of power.
Sometimes sexual harassment is not as easy to identify. The main

thing is whether or not the attention is unwanted and unwelcome.
For instance, the following actions may or may not be sexual
harassment:
1. Being given a back rub by a co-work
2. Being stared at by a colleague
3. A co-worker hit on me and asked me on a date
People who are victims of sexual harassment may not complain or

report the abuse. Here is a list of reasons:
1. They are too embarrassed.
2. They feel that they have done something to bring on this type of
behaviour
3. They are afraid of being labelled a “trouble maker”
4. They are scared of what the other person may do
5. They feel that it is just part of the job
6. They are afraid they may lose their job
d. Types of Sexual Harassment
Basically there are two types of sexual harassment:
1. Quid Pro Quo
2. Hostile Work Environment.
Quid Pro Quo
Quid Pro Quo is a Latin term that means “this for that”. This type of
harassment is when an employer uses harassing behaviour
as the basis for making employment decisions. This is against the law.
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Employers cannot make employment decisions based on such things

as race, ethnic background, or gender. In addition, employers are not
allowed to make employment decisions on the basis of whether or not
an employee grants or withholds “sexual favours”. Employment
benefits can NEVER be granted, refused, or promised in exchange for
sexual favours or romantic interest.
Hostile Work Environment
A Hostile Work Environment describes a workplace where it is difficult

for employees to concentrate on his or her job because of the open
sexual nature of conversations, pictures, or actions that occur in the
workplace. The following actions can all contribute to such a hostile
environment:
 Insults or threats
 Offensive sexual material, such as pictures or calendars
 Sexual language
 Off-colour jokes or stories
 Unwanted comments about an individual's body
 Unwanted requests for dates or for sexual favours
 Unwanted touching
e. Unwanted and Unwelcome Behaviour
In order for sexual harassment to occur, it must be unwelcome or

unwanted. The purpose of the law is not to prevent people from
entering into personal, mutually acceptable relationships with
people they meet in the workplace. It is designed to prevent
workers from being harassed or embarrassed. Unwelcome
behaviour is usually met with a negative response from the other
person.
What is harassing behaviour to one person may not bother another

person. To avoid sexually harassing another person, it is important
to respect the person's signals that say "no." Each person's right
to refuse unwelcome behaviour must be respected.
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f. The Cost of Sexual Harassment
Sexual Harassment is very costly. It hurts everyone. It may cost

the agency money because of huge legal settlements. But
another cost is the emotional toll that sexual harassment can
take on an employee. Here are the most common costs of sexual
harassment:
Financial Costs-lost productivity, absenteeism, employee

turnover, legal settlements/claims and job loss
Emotional Costs-embarrassment, fear, feeling of no control,

shame, guilt, frustration and anger
Physical Costs- nervousness, headaches, panic attacks,

sleeping disorders, inability to eat, overeating and sexual
performance issues
g. Liability for Sexual Harassment
There is a myth that sexual harassment only occurs between a

male boss and female worker. People often think of the days
when Hollywood movie producers would lure young starlets onto
the "casting" couch before they were selected for a film. But
sexual harassment includes many more types of behavior.
Today, sexual harassment can include:
1. Peer-to-peer harassment; among co-workers or equals
2. Third Party Harassment. This is where the person is not the

direct target but may be exposed to unwanted sexual behaviour,
such as overhearing, telephone calls describing sexual activity,
etc.
3. Workers may also harass, threaten, or blackmail a supervisor or

superior
4. Women can sexually harass men.
5. Member of the same sex can sexually harass each other; males
can harass males; females can harass females.
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6. The offender can be a non-employee, such as patients or

vendors.
Activity-Cases of Sexual Harassment
Please read the following short stories. Decide whether you think
they represent Sexual Harassment. If you believe they do fit
the description of sexual harassment, try to determine the type
(Hostile Work Environment or Quid Pro Quo).
Situation 1: A male therapist at Parirenyatwa Hospital asks a

female nurse, "Hey Becky, from the smile on your face this
morning, it looks like you got some from your boyfriend last night.
He's a lucky guy, when you get tired of him, we should hook up."
Situation 2: Several police applicants, both male and female,

have applied for a job. The Sergeant (Administrator) takes Kim
aside and says, "I find you very attractive. Why don't you and I
get together for dinner and drinks? I think that you might make
a terrific day-shift supervisor, especially if you play your cards
right. Who knows, we might even have breakfast together."
Situation 3: Constable Banda is a female nurse aide who has just

been assigned to work with Sergeant John in the rehab unit at
Chikurubi Camp Hospital. Banda finds John very
handsome and thinks of him as a "hottie". John is happily
married and not interested in Banda. Banda continually flirts with
John, using every opportunity to brush up against him. She
strokes his long blond hair whenever she gets the chance. John
has politely asked her to stop and has tried to make a joke of
the attention. She continues with the same actions and is getting
bolder.
Situation 4: Mr. Jones is the Director of a Rehabilitation Center.

He is a 52-year-old white man, who is a bachelor. Peter is a
Physical Therapist who has worked at the Rehabilitation Center
part-time for about six months. Peter is straight and has a
girlfriend. Lately, Mr. Jones has begun to make very suggestive
comments to Peter, such as "Peter, you are really filling out
those scrubs very nicely. Let me feel your muscles." "I'd love it if
you gave me some private therapy."
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What did you think of these situations? Was it hard for you to
decide what behavior is really sexual harassment? Here is what
the authors have to say about each situation:
Situation 1: The male therapist is creating a hostile work

environment. His comments regarding the female nurse's looks
and sexual activity are unwanted and unwelcome.
Situation 2: The Administrator is clearly implying that by having

dinner, drinks, and who knows what else, Kim could get the
job as supervisor. This is an example of Quid Pro Quo.
Situation 3: In this situation, a woman is doing the harassing.

John has repeatedly asked Banda to stop making comments and
to stop touching him. Betty is creating a hostile work
environment.
Situation 4: Yes, sexual harassment can occur between

members of the same sex. Mr. Jones, who is in a position of
authority, is creating a hostile work environment for Peter. The
comments are not wanted and Peter is being placed in a very
uncomfortable position.
h. The nature of sexual harassment
As we have seen, harassment can occur in many forms. You

need to know what each form of sexual harassment looks like.
The four most common forms include Verbal, Visual, Written and
Physical.
Verbal Harassment
1. Verbal harassment may include any of the following actions or

behaviours:
2. Telling off-colour or sexist jokes
3. Making suggestive comments about parts of the human body
4. Discussing sexual experiences in general or in specific terms
5. Asking questions about an individual's sexual practices or

activities
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6. Making negative remarks about a person's looks or sexuality
7. Making continued requests for sexual or social contact after

being told that the request is unwelcome. This includes repeated
requests for a date, excessive telephone calls, or following the
person around.
8. Using sexually intimate words, such as, "babe", "sweetie",

"sweetheart", "doll", and "honey".
9. Making grunts, catcalls, or whistling
Visual Harassment
Common workplace items can be sexually offensive. Such items can

include:
Suggestive Pictures, Posters, Decorations, Calendars, Cartoons,

Drawings, Magazines, Books, Computer "screen savers".
Written Harassment
Unwelcome written communications can come in many of forms.

Some examples include:
Love letters, invitations, personal notes, greeting cards, texts and

e-mails.
Physical Harassment
Unwanted physical contact can include:
Touching, hugging, exposing body parts, stalking, stroking,

pressing against someone, kissing, grabbing, patting, rubbing,
brushing and giving back or neck rubs.
i. Action after Being Harassed
Step One: Remember that you are the victim. Do not be

embarrassed. This is not your fault. You have done nothing
wrong and do not deserve to be treated in this way.
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Step Two: Just say "NO!" Tell the person who is harassing you
that his or her actions are unwanted. Tell them in very clear
terms that this type of behavior is offensive to you.
Step Three: Document, Document, Document Record the time,

date, place, person, and a description of the incident.
Step Four: Contact your immediate supervisor or human

resources department. If the harasser is your immediate
supervisor, then contact the person who is next in line up the
organizational chart.
Step Five: Follow your organization's complaint process. Most

organizations have specific, detailed procedures to follow. This
type of information is often included in your Employee Handbook
or the Company website.
Step Six: If necessary, you may need to file a formal complaint

through the local office of the federal Equal Employment
Opportunity Commission (EEOC). Also, you may be able to file a
complaint through local or state agencies in your area.
Step Seven: If you feel that you need legal representation or

advice, please consult with an attorney. You should choose one
who specializes in human resource law.
j. How to Prevent Sexual Harassment
Sexual Harassment is an ongoing problem in the workplace. It is

something that will not go away as long as people, both
male
and female, are working together. To help develop a workplace
that is free of sexual harassment, there are a few steps that can
be taken.
They include:
Employee Education: Every employee should be provided some

type of training in sexual harassment. This should include the
definition and examples of sexual harassment, a review of the
organization's sexual harassment policy, and an overview of the
complaint process and how it works.
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A Sexual Harassment Policy: Every organization should have a

formal sexual harassment policy. This policy is usually down in
writing. Ask your supervisor for a copy. Make sure that your
behavior is in line with the policy.
A Formal Complaint Process: Most organizations have a formal

complaint process to go along with its sexual harassment
policy. If you have been sexually harassed, you have the right to
file a complaint. Your supervisor is usually the best place to
start. If your supervisor is the one doing the harassing, you can
contact Personnel, Human Resources, or another manager
higher up the organization chart.
Respect is the Key Respect for every person in the workplace is

the real key to preventing sexual harassment. Below are some
guidelines to follow to show respect and proper workplace
behavior:
1. Value each person for the knowledge, skills, and abilities they
bring to the workplace.
2. Treat everyone with respect regardless of his or her role or title.
3. Be respectful of all people, regardless of their sexual preference.
4. Acknowledge that males and females are capable of performing

the same job in the same way.
5. Remember that an individual's looks should not be a factor in the

workplace.
6. Treat your co-workers and patients the same way you would
want to be treated.
7. Know, understand, and follow your organization's policy

regarding sexual harassment.
4.2.14 DATA THEFT – INDUSTRIAL ESPIONAGE
The word “espionage” calls to mind some high-stakes theft of classified

information, executed by shadowy agents versed in sophisticated spy
craft. The reality of industrial espionage is usually much less
glamorous. First, the definition: “Espionage” is the theft of secrets;
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therefore, industrial espionage is the theft of business secrets, or trade

secrets. In order for industrial espionage to be a crime, business
secrets must have legal protections—and they do. Trade secrets enjoy
one of the broadest definitions in intellectual property law.
Intellectual property-is intangible property that the law grants

ownership rights to.
Copyright-is a legal document that gives to the copyright holder the

right to copy, reproduce and sell works or authorship such as sound
recordings, musical, literary, dramatic, architectural, pantomimes,
choreographic, pictorial, graphic, sculptural works, motion pictures and
other audio visual work.
Trademark-a document designed to protect commercial identity or

brand.
Patent-designed to protect individuals’ inventions.
Trade secrets are an interesting species of intellectual property for

several reasons: They have no statute of limitations; their scope is
quite broad; and the law exacts significant sanctions for
misappropriating them. A secret recipe for fried chicken, a computer
schematic, the blueprint of a manufacturing facility, a marketing
strategy, or a list of clients could all qualify as trade secrets if their
owners took pains to keep them secret.
The Modus Operandi of the Industrial Spy
In classic espionage, spies are insiders who give one country’s secrets
to another. They may be moles on the inside or defectors who trade
information for money or residency. The dynamics of industrial
espionage parallel is that of the classic international spy’s game. But
often, the mechanics are far more mundane:
A former employee accepts a position with a competitor or directly

competes with a former employer, using privileged knowledge of the
former employer’s business to gain a competitive advantage.
There are, of course, differences. Whereas defectors or moles are

nearly universally viewed as traitors and fully aware they’re
committing a crime, many former employees who share their ex-
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bosses’ secrets may not realize they’re breaking the law. Unlike
betraying one’s country for profit, climbing the career ladder (by
whatever means necessary) is socially acceptable behaviour which
may be why so many ex-employees fail to grasp the illegality of giving
up a former employer’s trade secrets.
While most industrial espionage is low-tech, unsophisticated, and

perpetuated by people who likely don’t know they’re committing a
crime, plenty of industrial spies have stolen secrets with their eyes
wide open, motivated by the huge advantage conferred by inside
knowledge. Here’s an overview of some of the more sophisticated
methods of the accomplished industrial spy:
a. Poaching Key Personnel
Competing companies may try to recruit people with knowledge of

proprietary information by offering them a big salary bump, large
consulting fees, or outright bribes e.g. labour transfer from Chicken
Inn to Chicken Slice.
b. Staking Out Trade Shows
Trade shows have long been a source of competitive intelligence.

Trade shows are also prime targets for foreign intelligence services
engaged in economic espionage. Trade shows present opportunities
for identifying key personnel, hacking data devices, and coaxing
information out of unsuspecting attendees.
c. Elicitation, Pretexting, and Human Engineering

Elicitation
Sometimes the easiest way to get information is to simply ask for it.
It’s rude, after all, to deny a polite inquiry. The pamphlet defines
elicitation as “the strategic use of conversation to extract information
from people without giving them the feeling they are being
interrogated… Conducted by a skilled collector, elicitation will appear to
be normal social or professional conversation. A person may never
realize she was the target of elicitation or that she provided
meaningful information.”
Imagine, for instance, that you’re an engineer enjoying an evening off

at your favorite bar, when you overhear people—seemingly, a couple
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of clueless students—wildly understating the performance specs of a

piece of tech you helped design. You are incensed, and eager to set
them straight. Do you correct them? Should you engage in
conversation because of your shared interests, and offer them the
benefit of your superior knowledge? “A trained elicitor understands
certain human or cultural predispositions and uses techniques to
exploit those”. “Natural tendencies an elicitor may try to exploit
include…a tendency to correct others (and) a desire to appear well
informed, especially about our profession.” That overheard
conversation might just be a trap set by a corporate spy.
4.3 CYBER CRIME SCENE ATTENDANCE AND SECURING
Digital forensics is the process by which information is extracted from

any digital system or data storage media, rendered into usable form,
processed and interpreted for the purpose of obtaining intelligence for
use in investigations or evidence for use in criminal proceedings.
4.3.1 Documenting Crime Scene
Securing and Evaluating the Scene
Principle
The first responder should take steps to ensure the safety of all
persons at the scene and to protect the integrity of all evidence, both
traditional and electronic.
First Responders’ Responsibilities
First responders are responsible for preserving an electronic crime

scene and for recognizing, collecting and safeguarding digital evidence.
Internally attached computer hard drives and other electronic devices
may contain information that can be useful as evidence in a criminal
investigation or prosecution. The devices themselves and the
information they contain may be used as evidence in court. Digital
evidence is obvious where the offence is committed online, as in an
allegations of pornography or online sexual offences, but many
perpetrators of sexual violence, especially those involving children,
take photographs of the victims and this becomes important evidence
corroborating the victim’s account.
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Two important points for first responders to bear in mind is that

computer data and other digital evidence are fragile, and that only
specially-trained personnel should attempt to examine and analyse
digital evidence.
General Guidance
 Officers’ safety and safety of others is the highest priority.

 Treat the computer/digital crime scene as you would any other
crime scene.
 Use the same safety procedures and tactics that would be
utilized at any other crime scene.
 Secure any subjects at the scene and remove them from the
area to be searched.
 Let a co-worker move the mouse to keep screen open.
 Obtain passwords from suspect but do not enter them in the
gadgets.
 Treat the scene as though you will have to testify in court.
 Do not let suspects possesses or be near devices that could alter
the state of digital evidence.
 Do not allow suspects to physically assist in processing digital
crime scene. They could execute arbitrary programs that could
alter evidence.
 Do not leave the computer unattended.
 Do not allow anyone to touch the keyboard.
 Do not examine or ‘brouse’ the files on the computer. This can
alter files, changing important data, last access dates and times.
Any alterations may result in the evidence being inadmissible.
Identification of Digital Evidence
Digital evidence includes:
Computer Systems
Computers systems can take many forms, such as laptops, desktops,

tower computers, rack-mouthed systems, minicomputers and
mainframe computers. A computer system consists of hardware and
software that process data and can include:
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 A case that connects circuit boards, microprocessors, hard drives,

memory and internet connections.
 A monitor or video display device, A keyboard, A mouse,
 Peripheral or externally-connected drives, devices and components,
which include modems, routers, printers, scanners and docking
stations.
Storage Devices
 Hard drives, External hard drives, Removable media (compact

discs, CV discs), Thumb drives, Memory cards, etc.
Handheld devices
Cell phones, Smart phones, Digital multimedia devices, Tablets, Global

positioning system (GPS), etc.
Peripheral Devices
Web cameras, USB and Fire wire devices, Microphones, Keyboard and
mouse, Memory card readers, etc.
Potential evidence
Surveillance equipment, Data storage tape drives, Digital cameras,

Video cameras, Digital audio recorders, Video game consoles, Mp3
players and access cards, etc.
Procedure
After securing the scene and all persons on the scene, the first
responder should visually identify potential evidence, both
conventional (physical) and electronic, and determine if perishable
evidence exists. The first responder should evaluate the scene and
formulate a search plan.
Securing and Evaluating the Scene
First Responders must perform the following actions at the scene:
 Secure the scene and all persons at the scene.

 Visually identify all potential evidence.
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 Ensure the integrity of both digital and traditional evidence is

preserved.
 Document, photograph and secure digital evidence as soon as
possible.
 Ensure no unauthorised person has access to any electronic
devices at the scene.
 Refuse offers of help or technical assistance from any
unauthorised persons.
 Remove all persons from the crime scene or the immediate area
from where the evidence is being collected.
 Leave a computer or electronic device off if it is already turned
off, do not, in any circumstances, switch the computer on.
 If a computer is on, or the power state cannot be determined,
the first responder must, look and listen for any indication that
the computer is on, check the display for signs that digital for
signs that digital evidence is being destroyed (words like delete,
format, copy, move, cut or wipe), look for indications that the
computer is being accessed from a remote computer or device.
 Unplug the power and other devices from sockets on the
computer itself i.e not the wall socket.
 Take note of all cameras or web cameras and determine if they
are active.
 Search the area for diaries, notebooks or pieces of paper with
passwords on which are often attached or close to the computer.
 Leave cellular, mobile(s) or smart phone(s) in the power state
(on or off) in which they were found.
4.3.2 Interviewing the Occupant
Conduct preliminary interviews by separating and identify all persons

(witnesses, subjects, or others) at the scene and record their location
at time of entry. First responders must separate and identify all adult
persons of interest at the crime scene and record their location at the
time of entry. The following information should be obtained:
 Names of all the users of the computers and devices.

 All computer and user information.
 All login names and user account names.
 Purposes and uses of computers and devices.
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 All passwords.
 Type of internet access.
 Any offsite storage.
 Internet service provider.
 All email accounts.
 Security provisions in use.
Documenting the Scene.
First responders must accurately record the location of all relevant

digital equipment at the scene. This should include a detailed record,
using notes, sketches, photographs or video of the type, location and
position of computers, their components and electronic devices. All
activity and processes on display screen should be fully documented or
photographed. Record any network and wireless access points present.
4.3.3 Seizure and Seizure Principles
Search and seizure is a legal procedure whereby law enforcement

agents conduct an examination of a premises and forcibly take
property of potential evidentiary value from a person who is suspected
of violating or has violated the law.
In terms of section 165B, of the Cyber Security and Data Protection

Act, (Chapter 11:12) “seize” includes
a. Taking possession of or securing a computer
b. Securing a computer system or part thereof or a computer data

storage medium
c. Taking a printout or output of computer data
d. Making and retaining a copy of computer data, including through

the use of onsite equipment
e. Activating any onsite computer system or computer data storage

media.
f. Maintaining the integrity of any stored relevant computer data
g. Rendering inaccessible or removing computer data in the accessed

computer system.
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A magistrate may on an application by a police officer in the prescribed

form, that specified computer or a printout or other information is
reasonably required for the purpose of a criminal investigation or
criminal proceedings, order that-
a. A person in Zimbabwe in control of the relevant computer system

produce from the system specified computer data or a printout or
other intelligence output of that data.
b. An electronic communications service provider in Zimbabwe

produce information about persons who subscribe to or otherwise
use the service.
An application shall be supported by an affidavit in which the police

officer shall set out the offence being investigated, the computer
system in which it is suspected to be stored, the reasonable
grounds upon which the belief is based, the measures that will be
taken in pursuance of the investigation and the period over which
those measures will be taken.
The officer granted the warrant may
a. If there are reasonable grounds to believe that computer data

concerned is susceptible to loss, alteration, deletion,
impairment or modification, by written notice given to a given
in control of the data, require the person in control of the
data to ensure that the data specified in the notice is
preserved for a period not exceeding seven days as may be
specified in the notice which may be extended, on application
of the magistrate.
b. By written notice to a person in control of the computer

system or information system concerned, require the person
in control thereof to disclose relevant traffic data concerning
specified communications in order to identify- the service
providers or the path through which the communication was
transmitted.
4.3.4 Search Warrants
Search warrants provide the law enforcement agencies with the

authority to enter a premises, search for the objects named in the
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warrant, and seize them. To be valid, the warrant must specifically

state the crime (or crimes) being investigated, the location to be
searched and the items to be seized.
d. Searching a computer evidence
The process of searching a computer for electronic evidence can easily

turn into a sweeping examination of a wide array of information.
Computer forensics technology, however, provides investigators a

range of methods by which they can more narrowly target their search
of computers for electronic evidence, such as “limiting the search by
date range, doing keyword searches [and phrases], limiting the search
to text files or graphic files and focusing on certain software programs.
A search protocol is a document that describes what is being searched

for in a computer and which method will be used.
4.3.5 Seizing Electronic Evidence and documentation
Principle
Actions taken should not add, modify, or destroy data

stored on a computer or other media. Computers are fragile electronic
instruments that are sensitive to temperature, humidity, physical
shock, static electricity, and magnetic sources. Therefore, special
precautions should be taken when packaging, transporting, and storing
electronic evidence. To maintain chain of custody of electronic
evidence, document its packaging, transportation, and storage.
Policy
Ensure that proper procedures are followed for packaging,

transporting, and storing electronic evidence to avoid alteration, loss,
physical damage, or destruction of data.
Packaging procedure
a. Ensure that all collected electronic evidence is properly

documented, labelled, and inventoried before packaging.
b. Pay special attention to latent or trace evidence and take actions to

preserve it.
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c. Pack magnetic media in antistatic packaging (paper or antistatic

plastic bags). Avoid using materials that can produce static
electricity, such as standard plastic bags.
d. Avoid folding, bending, or scratching computer media such as

diskettes, CD–ROMs, and tapes.
e. Ensure that all containers used to hold evidence are properly

labelled.
NB If multiple computer systems are collected, label each system

so that it can be reassembled as found (e.g., System A–mouse,
keyboard, monitor, main base unit; System B–mouse, keyboard,
monitor, main base unit).
Procedure
a. Keep electronic evidence away from magnetic sources. Radio

transmitters, speaker magnets, and heated seats are examples of
items that can damage electronic evidence.
b. Avoid transportation storing electronic evidence in vehicles for

prolonged
periods of time. Conditions of excessive heat, cold, or humidity can
damage electronic evidence.
c. Ensure that computers and other components that are not packaged
in containers are secured in the vehicle to avoid shock and excessive
vibrations. For example, computers may be placed on the vehicle
floor and monitors placed on the seat with the screen down and
secured by a seat belt.
d. Maintain the chain of custody on all evidence transported.
4.3.6 Storing Electronic Evidence
a. Ensure that evidence is inventoried in accordance with

departmental policies.
b. Store evidence in a secure area away from temperature and

humidity extremes. Protect it from magnetic sources, moisture,
dust, and other harmful particles or contaminants.
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NB: Be aware that potential evidence such as dates, times, and

systems configurations may be lost as a result of prolonged storage.
Since batteries have a limited life, data could be lost if they fail.
Therefore, appropriate personnel (e.g., evidence custodian, lab chief,
forensic examiner) should be informed that a device powered by
batteries is in need of immediate attention.
Computers and other electronic devices are present in every aspect of

modern life. At one time, a single computer filled an entire room;
today, a computer can fit in the palm of your hand. The same
technological advances that have helped law enforcement are being
exploited by criminals. Computers can be used to commit crime, can
contain evidence of crime, and can even be targets of crime.
Understanding the role and nature of electronic evidence that might be
found, how to process a crime scene containing potential electronic
evidence, and how an agency might respond to such situations are
crucial issues. This guide represents the collected experience of the
law enforcement community, academia, and the private sector in the
recognition, collection, and preservation of electronic evidence in a
variety of crime scenes.
4.3.7 The Law Enforcement Response to Electronic Evidence
The law enforcement response to electronic evidence requires that

officers, investigators, forensic examiners, and managers all play a
role. This document serves as a guide for the first responder. A first
responder may be responsible for the recognition, collection,
preservation, transportation, and/or storage of electronic evidence. In
today’s world, this can include almost everyone in the law enforcement
profession. Officers may encounter electronic devices during their day-
to-day duties. Investigators may direct the collection of electronic
evidence, or may perform the collection themselves. Forensic
examiners may provide assistance at crime scenes and will perform
examinations on the evidence. Managers have the responsibility of
ensuring that personnel under their direction are adequately trained
and equipped to properly handle electronic evidence. Each responder
must understand the fragile nature of electronic evidence and the
principles and procedures associated with its collection and
preservation. Actions that have the potential to
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alter, damage, or destroy original evidence may be closely scrutinized

by the courts.
Procedures should be in effect that promote electronic crime scene

investigation. Managers should determine who will provide particular
levels of services and how these services will be funded. Personnel
should be provided with initial and ongoing technical training.
Oftentimes, certain cases will demand a higher level of expertise,
training, or equipment, and managers should have a plan in place
regarding how to respond to these cases. The demand for responses to
electronic evidence is expected to increase for the foreseeable future.
Such services require that dedicated resources be allocated for these
purposes.
4.3.8 The Latent Nature of Electronic Evidence
Electronic evidence is information and data of investigative value that

is stored on or transmitted by an electronic device. As such, electronic
evidence is latent evidence in the same sense that fingerprints or DNA
(deoxyribonucleic acid) evidence is latent. In its natural state, we
cannot “see” what is contained in the physical object that holds our
evidence. Equipment and software are required to make the evidence
visible. Testimony may be required to explain the examination process
and any process limitations. Electronic evidence is, by its very nature,
fragile. It can be altered, damaged, or destroyed by improper handling
or improper examination. For this reason, special precautions should
be taken to document, collect, preserve, and examine this type of
evidence. Failure to do so may render it unusable or lead to an
inaccurate conclusion. This guide suggests methods that will help
preserve the integrity of such evidence.
4.3.9 The Forensic Process
The nature of electronic evidence is such that it poses special

challenges for its admissibility in court. To meet these challenges,
follow proper forensic procedures. These procedures include, but are
not limited to, four phases: collection, examination, analysis, and
reporting. Although this guide concentrates on the collection phase,
the nature of the other three phases and what happens in each are
also important to understand.
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The collection phase involves the search for, recognition of, collection
of, and documentation of electronic evidence. The collection phase can
involve real-time and stored information that may be lost unless
precautions are taken at the scene. The examination process helps to
make the evidence visible and explain its origin and significance. This
process should accomplish several things. First, it should document the
content and state of the evidence in its totality. Such documentation
allows all parties to discover what is contained in the evidence.
Included in this process is the search for information that may be
hidden or obscured. Once all the information is visible, the process of
data reduction can begin, thereby separating the “wheat” from the
“chaff.” Given the tremendous amount of information that can be
stored on computer storage media, this part of the examination is
critical.
Analysis differs from examination in that it looks at the product of the

examination for its significance and probative value to the case.
Examination is a technical review that is the province of the forensic
practitioner, while analysis is performed by the investigative team. In
some agencies, the same person or group will perform both these
roles. A written report that outlines the examination process and the
pertinent data recovered completes an examination. Examination
notes must be preserved for discovery or testimony purposes. An
examiner may need to testify about not only the conduct of the
examination but also the validity of the procedure and his or her
qualifications to conduct the examination.
This guide is intended for use by law enforcement and other

responders who have the responsibility for protecting an electronic
crime scene and for the recognition, collection, and preservation of
electronic evidence. It is not all-inclusive. Rather, it deals with the
most common situations encountered with electronic evidence.
Technology is advancing at such a rapid rate that the suggestions in
this guide must be examined through the prism of current technology
and the practices adjusted as appropriate. It is recognized that all
crime scenes are unique and the judgment of the first
responder/investigator should be given deference in the
implementation of this guide. Furthermore, those responsible officers
or support personnel with special training should also adjust their
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practices as the circumstances (including their level of experience,

conditions, and available equipment) warrant. This publication is not
intended to address forensic analysis.
When dealing with electronic evidence, general forensic and procedural

principles should be applied:
1. Actions taken to secure and collect electronic evidence should not

change that evidence.
2. Persons conducting examination of electronic evidence should be

trained for the purpose.
3. Activity relating to the seizure, examination, storage, or transfer of

electronic evidence should be fully documented, preserved, and
available for review.
For example, Broadhurst (2006) constructed a typology of computer

related crime, which provides a more comprehensive framework for
the scope of criminal activities involved in cybercrime. He identifies
six offense categories and the current kinds of cyber-crime that tend
to fall in these categories:
1. Interference with lawful use of a computer – which includes such

crimes as cyber-vandalism, cyber-terrorism, and the spread of
viruses, worms and other forms of malicious code.
2. Dissemination of offensive materials – which includes child

pornography, other forms of pornographic material, racist/hate-
group material, online gambling, and treasonous content.
3. Threatening communication – which includes extortion and

cyber-stalking.
4. Forgery and Counterfeiting – which includes identity theft,

phishing, IP offenses, various kinds of software and
entertainment piracy, and copyright violations.
5. Fraud – which includes credit card fraud, e-funds transfer fraud,

theft on internet or telephone services, online securities fraud,
and other types of Internet fraud.
154
6. Other types of cyber-crime – which includes interception of

communications, commercial and corporate espionage,
communications used in criminal
4.3.10 Expedited preservation of data:
According to section 165C of Cyber Security and Data Protection Act,

(Chapter 11:12),
1. A magistrate may, on an application by a police officer in the

prescribed form, that there are reasonable grounds to suspect or
believe that traffic data associated with a specified
communication is required for the purposes of a criminal
investigation-
Order any person who controls such data to-
i. Collect, record o preserve the traffic data associated with a

specified communication during a specified period, or
ii. Permit and assist a specified police officer to collect or record
that data.
Authorise the police officer to collect or record traffic data associated

with a specified communication during specified period through the use
of any appropriate technological means.
ACTIVITY 4.1
1. Define Cyber Crime.

2. Identify and Explain Typologies of Cyber Crime.
3. Describe Cyber Crime Scene Attendance and documentation.
4. Explain interviewing of occupants.
5. Summarise the seizure and seizure principles.
6. Outline the packaging and transporting of electronic evidence.
7. Describe the storage electronic evidence.
REFERENCES
155
Brigham EF and Houston JF, (2017), Fundamentals of Financial

Management: Business School Edition, 13 th Edition, Cengage Learning,
Boston.
Broadhurst, R. (2006). Developments in the global law enforcement of

cybercrime. Policing: An International Journal of Police Strategies and
Management, 29, 408-433.
Chitsove, E (2018), Legal Aspect of Combating Corruption in

Zimbabwe, University of Botswana Law Journal.
Criminal Law (Codification and Reform) Act, Chapter 9:23
Elliot B & Elliot J, (2011), Financial accounting and reporting, 14th

edition, Prentice Hall, London.
Gibson CH, (2012), Financial Reporting and Analysis: Using Financial

Accounting Information, 13th Edition, Cengage Learning, Boston.
IAS Manual for International Accounting Standards, ICAP
Kieso D and Kimmel P, (2011), Financial Accounting, 8 th Edition, Wiley

and Son, New Jersey.
Madura J, (2014), International Financial management, Cengage

Learning, Boston.
Money Laundering and Proceeds of Crime Act 4/2013
Perreault T, (2015), Essentials of marketing, 14th edition, McGraw-Hill,

New York.
Prevention of Corruption Act, (Chapter 9:16).
Tennent J, (2013), The Economist: Guide to Financial Management 2 nd

edition, Profile books, London.
Walden, I. (2003) 'Computer Crime', in C. Reed and J. Angel (eds)

Computer Law, Oxford: Oxford University Press.
Wall, D .S. (2005b) "The Email of the Species is More Deadlier than
the Mail: Digital Realism and the Governance of Spam as Cybercrime',
European Journal on Criminal Policy and Research (forthcoming).
156
Wall, D.S. (2005a) 'The Internet as a Conduit for Criminals', pp. 77-98
in Pattavina, A., Information Technology and the Criminal Justice
System, Thousand Oaks, CA: Sage
Wood F and Sangster A, (2016), Business Accounting 1,13th Edition,

Prentice Hall, New Jersey.
Zimmerman J, (2014), Accounting for Decision Making and control,

McGraw-Hill, New York.
Electronic Resources / URLs
- Cochrane Library Login
- EBSCO host Login
- IMF eLibrary Login
- Industrial and Applied Mathematics Journals Login
- JSTOR Login
- Liebert Online Login
- Operation Research and Management Sciences (INFORMS) Login
- Taylor and Francis Journals Login
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DIPLOMA IN POLICE STUDIES

2.14 ELECTRONIC CARD FRAUD.....................................................57

Unit one covers the sources of Zimbabwean law in relation to

Unit three covers other commercial crimes like Stock market

Unit four covers computer related commercial crimes namely hacking,

ZIMBABWEAN LAW AND COMMERCIAL CRIME

Commercial crime, in its various forms, is one of the dangerous

1.1. DEFINITION OF CONCEPTS

It covers crime such as fraud which is deceiving a person or a

White Collar Crime

It is the crimes committed by a person of respectability and high social

Radzinowicz & Wolgang (1977), in their book Criminology say; “White

Weisburd and Waring (2001), define white-collar crime as economic

While societal status may still determine access to wealth and

Clinard and Quinney (1973) and Rosoff et al (1998), categorised

According to Bartol (2008), crime is an action or omission which

It is a person who is harmed, injured or murdered as a result of crime

1.2. Forms of Commercial Crime

White-collar crime is a crime committed by persons who, often by

Specific examples of activities that constitute white-collar crimes

profits or driving a competitor out of the market), falsifying reports of

NB-Commercial crime however includes other crimes that do not fall

1.3. Characteristics of White Collar Crime

Although white-collar crimes are quite varied, most have several

a. First, they involve the use of deceit and concealment, rather

c. White-collar crime is also often more difficult to detect than

crimes require concerted criminal activity by coconspirators. For

d. The monetary sums that are involved tend to be large.

1.4. IMPACTS OF WHITE COLLAR CRIME

 Direct losses- loss of tangible assets such as inventory and cash.

1.5. Efforts That Are In Place to Curb White Collar Crime In

Due to a rampant increase in commercially related crimes, the

 The Zimbabwe Anti-corruption Commission (ZACC),

 The Commercial Crime Court,

 The Commercial Crime Division (CCD),

 The Police Anticorruption Unit (PACU), etc.

The Strategies of overcome Commercial Crimes and White

Most of the commercial crimes are physical crimes. Unlawful entry is

Robbery or armed robbery to be precisely is another crime that

1.6. Personality Traits of White Collar Criminals.

 Weak sense of ethics- An employee whose behaviour clearly

 Refusal to take time off.

 Refusing promotion for fear of losing the opportunity to commit

 Coming in early or staying late.

 Employee lifestyle changes.

 Abuse of drugs and alcohol.

 Borrowing from co-workers.

 Creditors or debt collectors appearing at work place.

 Easily annoyed by reasonable questioning.

 Carrying unusually large sums of money.

1.7. Criminological Perspective of Commercial Crime.

Criminological theories attempt to explain the reasons why crime takes

Theories should provide coherent explanations of the phenomena they

One of Sutherland’s professional goals in writing about white collar

1.9.1 Theory of White Collar Crime

Sutherland first penned the term White Collar Crime in 1940 in an

“White Collar Crime is/are crime(s) committed by a person of

Sutherland’s work was based on the dealings of several large USA

1. To present evidence that members of upper social class commit

2. To present an hypothesis that explained all criminal behavior-

1.9.2 Differential Association Theory

Propounded by Edwin Sutherland (1949). In keeping with his objective

crime comes about as a result of a process called differential