Estate fraud: ‘We don’t examine corpses,’ says Home Affairs
Imagine finding out you’re dead via a condolences phone call from your asset manager, despite you being the picture of health. Fraudulently registered deaths to claim estates are not uncommon.
When Michael Mossop’s family found out about his “death” on 21 August they were understandably surprised. It wasn’t because of Mossop’s age – he was 86, after all – but because he was at home with his wife, alive and well.
“My husband’s son got a phone call from Allan Gray to sympathise on his death. And he said no, he’s alive. He phoned us and found Mike dozing in his chair. And my husband and my son and daughter-in-law thought Home Affairs must have made a mistake,” said Gail Lombard, who is married to the very much alive Mossop.
The mistake turned out to be an attempt at a sophisticated fraud that could have seen Mossop’s assets delivered to a fake grandson who had registered his death.
The incident lays bare the problems in the deceased registration process. But Home Affairs Minister Dr Aaron Motsoaledi pointed out one of the main problems: there are no bodies coming into the Department of Home Affairs offices, meaning the system relies on the honesty of doctors, funeral parlours, legal practitioners and its own staff.
Motsoaledi didn’t have knowledge of the Mossop case, but he said the department did encounter estate fraud based on false declarations of death “quite often”.
“We do have a very prominent case of a very prominent church leader whose wife discovered when she arrived at the bank that she was dead. And she told the banker: ‘But here is me. I am here; why do you say I am dead?’ And the banker said, ‘No, here is your death certificate’.
“And they sent her back to Home Affairs. Here she was even given a copy of her death certificate. And the Home Affairs official who produced that death certificate did not even deny it. He said: ‘Yes, it’s me, because we produce death certificates on the basis of a letter from a doctor. Because in Home Affairs we don’t examine corpses’,” he said.
Anatomy of a fraud
Daily Maverick asked ministerial spokesperson Siya Qoza whether the department had found out how this case had unfolded, but questions sent on 1 September have still not been answered.
Chrispin Phiri, the spokesperson for the Minister of Justice, provided some information discovered in the department’s internal investigation. On 30 June, documents were submitted to the Master of the High Court in Pretoria, and on 4 July the case was allocated to an estate controller, who registered the estate on the internal system using Mossop’s ID number.
“The Master’s Office is dependent on the information it receives from the Department of Home Affairs. The assistant master advised that she initially rejected the application and requested that the surviving spouse be appointed and not the applicant’s grandson, one Brian Gordon Pearson.”
The estate controller contacted the attorney linked to the file, requesting the information of the surviving spouse, Lombard. This is where the fraud appears to have reached another level: the lawyer sent a fake marriage certificate to the Master’s Office. This certificate said the two were married in community of property, which was a lie.
And Mossop, in fact, has no grandchildren.
On 11 July, the Master’s Office issued letters of executorship in the name of Lombard and not Pearson, but they were in the possession of Pearson because Lombard knew nothing of the fraud. Mossop was alerted almost a month later by the condolence call from Allan Gray and the cancellation of medical aid.
Pearson had used a Pretoria attorney to register the deceased estate, and though the Department of Justice said he “remains elusive”, Daily Maverick reached AJ Masingi on the phone number listed in the documents submitted to the Master’s Office.
Masingi said he had opened a case with the police once the fraud was discovered. He said all the documents submitted to him to register the estate appeared legitimate.
“They came with the original IDs and original death certificates.”
The police were looking into the funeral parlour that registered the death, he added.
In papers submitted to court, Mossop said there were falsehoods in the documents Pearson submitted.
“The death notice completed by one Brian Gordon Pearson states that I am dead and that is the first error. Brian Gordon Pearson claims to have been present when I died. Again, that is not true because I am not dead and because I do not know him. It also reflects that I was married in Pretoria, when I was in fact married in Hilton, KwaZulu-Natal,” he said in the affidavit.
Mossop also said the information provided by Pearson indicated that there is only a 17-year age difference between the two of them, “which makes it impossible for him to be my grandson simply on the basis of age”.
New system for estates
The Mossop matter indicates a death registration system apparently lacking adequate safeguards. Scammers know how to exploit it, mainly to gain access to assets and insurance payouts. This is one of the reasons the Department of Justice created a new system for registering deceased estates, launched in Midrand this week.
The system, which will be piloted in Pretoria, Cape Town and Durban, allows for the electronic registration of deaths. According to acting master Penelope Roberts, it will counteract similar fraud. It is also meant to stop incorrect beneficiaries from registering in the case of a real death.
“Because of the complaints in respect of fraudulent estates that have been reported, we are hoping that, with this deceased online project, we will help members of the public.”
The system is linked to the banking system and the accounting and lawyers’ industry bodies. This means only registered attorneys or accountants will be able to submit executor documents for estates of more than R250,000.
“We will be integrating with Home Affairs to ensure that the person whom the deceased estate is registered for is actually deceased. Because we will have death certificates from the Master’s Office that would be submitted to us. Without that verification, the person could still be alive.”
Roberts admitted the Master’s Office was reliant on Home Affairs having robust verification processes. “The Department of Home Affairs has a mandate to actually keep a record of the status of every citizen in South Africa so, once we are integrated with it on that link, it can confirm that the person is still alive or has died.”
She said if an executor’s letter was issued fraudulently, the department could electronically revoke the letter. This was not possible with the current manual system. The veracity of executor letters could now be checked by banks and other institutions using a QR code.
Motsoaledi said the department had ways to track down who issued a death certificate through its Biometric Access Control Movement system. “Before a Home Affairs official can produce a document, they must use their fingerprint to get into the system. Before, they were using a password, which can easily be stolen.”
A flaw that remains is that the department still relies on doctors and funeral homes to declare deaths. In the past, some of these people have been found to lie about seeing the body of the deceased. Motsoaledi said there was little the department could do about this.
“It is a police matter. The doctor must tell us how he declared that person dead.”
Case is not unique
Allan Gray spokesperson Daniella Bergman said the company was aware of the incident but had not launched an investigation since no death benefit had been claimed.
“We have seen an increase in fraud in the estate late/deceased space. As a result, we have added various verification steps to ensure we are dealing with the correct individuals, as well as receiving authentic instructions.
“To be successful with fraud in the retirement funds space is more difficult than in other investment products owing to the death claims investigation process, in which various individuals are contacted – for example, the spouse, siblings, parents and friends – to investigate and determine dependency. If a member is not deceased, then this should transpire during the process.”
Bergman said it was important that investors take steps to protect their personal information, such as using official channels to transact on investments and avoid clicking on links in emails and SMSes that purport to be from an investment company or bank.
Garth de Klerk, CEO of Insurance Crime Bureau, said the organisation had seen numerous cases like this but it was difficult to say if there had been an increase in them.
“This particular case is not unique. There have been other cases and not only of elderly individuals but people in their mid-30s and 40s or 50s, where false death certificates have been created to gain access to the financial benefits of financial products or bank accounts.”
He said the insurance industry had seen a trend of “walking dead”, where the same death is registered again and again, years apart, to try to claim from different insurers. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.