A former senior accounts secretary, Alwena Smith, has been sentenced to seven years of direct imprisonment for orchestrating a complex fraud scheme that defrauded a Stellenbosch law firm of over R13 million. According to the National Prosecuting Authority, Smith worked as a senior accounts secretary at the law firm from March 2006 until she was dismissed in May 2018. Her duties included managing daily income and expenditure, receipting client payments and conducting banking transactions on the firm’s trust account.
Clients paid retainers or funds into the law firm’s trust account, from which payments would be deducted when work was carried out on their files. Smith had access to the firm’s electronic banking system and client files and was responsible for making electronic payments to creditors and debtors. The investigation established that R13,267,096.59 was stolen between January 2016 and April 2 2018.
Fraud Scheme Details
Investigations revealed that she used her own internet profile and that of a colleague to create fictitious beneficiaries, enabling her to transfer funds from the trust account into her personal bank account. Authorities found that 171 transfers were made, while investigators also identified 171 illegal cheque withdrawals linked to client files she had access to.
To conceal the transactions, Smith created false beneficiaries with slight spelling variations of existing clients, preventing the law firm’s banking system from detecting duplicates. She also repaid about R6.5 million to the firm’s trust account as part of attempts to conceal the fraud. Before carrying out the scheme, Smith had registered a company, Garda TeK (Pty) Ltd, of which she was the sole director, as stated in the Company Registration documents.
Sentencing and Charges
Smith entered into a plea and sentencing agreement with the State and was convicted on 171 counts of fraud, 171 counts of interference with data, and four counts of money laundering. The court sentenced Smith to 12 years’ direct imprisonment for the fraud counts, together with five years suspended for five years on condition that she is not convicted of fraud, theft or corruption during the period of suspension.
The following are some key points about the case:
- Smith was sentenced to 12 years’ direct imprisonment for the fraud counts
- She received five years suspended for five years on condition that she is not convicted of fraud, theft or corruption
- The court imposed 12 years’ imprisonment for the four counts of money laundering, wholly suspended for five years
- Smith was declared unfit to possess a firearm
The sentences were ordered to run concurrently, resulting in an effective seven-year prison term. As noted by the Wikipedia definition of white-collar crime, this type of crime is typically characterized by deceit and concealment.
