Eastern Cape hit murders for insurance claims spiral to 50

A special task team is investigating murders linked to dodgy policies in the province. Fraudulent claims are enriching violent syndicates, and police and industry bodies are trying to curb the trend.

Standing in his office on the eighth floor of the Mount Road police station in Gqeberha, Eastern Cape, Captain Piet Potgieter stares at the spider’s web of graphs and graphics in front of him. The spartan office looks like a scene out of a murder mystery movie. Diagrams are stuck on walls, lines link one picture to another and photographs taken from newspaper articles and social media posts stand out at the centre of the interlocking puzzle.

Potgieter seems lost in the mass of names and images in front of him. Then he quickly turns to the stacks of files on his desk, on a boardroom table, even on the floor. He scans the scene until he finds the right pile, flips through the files and pulls out the exact docket he was looking for.

“This victim’s funeral policies were suddenly amplified and the payouts doubled. A few weeks later she was killed. She never even knew about this policy and it cost her her life,” Potgieter said, flicking through the pages of the file in his hands.

Without her knowledge, the woman had several funeral policies taken out in her name before hired murderers (or hit men) were paid to murder her so that a fake family member could profit from her death.

Potgieter is the lead investigator for the police’s money-for-murder task team (MFM) in Nelson Mandela Bay, and each of the hundreds of files in his office is linked to a fraudulent funeral policy and either organised crime syndicates or just greedy individuals, who killed upwards of 50 people for funeral policy payouts.

Minister’s directive

The MFM came about shortly after December 2024, when suspended minister of police Senzo Mchunu identified insurance-related murders as one of the biggest crimes plaguing the Eastern Cape. He said detectives at specific police stations had identified this growing trend, and by then at least 67 murders had been found to have preceded significant insurance claims by family members, friends or mere acquaintances.

By the end of 2024, Nelson Mandela Bay was already branded as a hotspot for these greed-driven violent crimes, with 28 dockets opened in KwaNobuhle, another 23 in Kwazakhele and several more in areas like New Brighton, KwaDwesi and Despatch.

At that stage, 145 people had already profited from policy payouts in the wake of suspected planned murders, Mchunu said. The bulk of these cases, and more that have since come to light, are among the many piles in Potgieter’s office.

It was by a stroke of (bad) luck that Potgieter found himself at the helm of the highly specialised task team. Based in the Karoo town of Cradock for most of his career, the decorated detective was the lead investigator in the case against so-called pastor Khaya Nocanda, who, along with his co-accused, allegedly ran a fraud and human trafficking racket that saw them pocket more than R1-million from their unsuspecting victims.

They allegedly trafficked poor and disadvantaged victims to Graaff-Reinet and Middelburg, also in the Karoo, issued them with fake documents and convinced them to apply for bank accounts, credit cards and cash loans. Nocanda is said to have offered the members of his congregation in Middelburg special blessings from the church if they played along with the scheme.

He and his fraud syndicate faced a string of charges, including fraud, theft, forgery, human trafficking and money laundering. He has since been convicted and is serving a lengthy prison sentence.

However, on the eve of the trial in July 2022, police intelligence was alerted that Nocanda had arranged a hit on Potgieter. “Luckily, around the same time I was promoted and transferred to another station in the district. While I was there, I assisted Captain Stephen Rheeders from the Komani detective branch on a number of cases and found myself roped into the investigation of a murder in Whittlesea. Little did I know that would ultimately lead to an entirely new crime syndicate, linked to a string of funeral policy murders.”

The first syndicate

On 3 August 2022, in the small rural town of Whittlesea, Aphiwe Gudula was sitting in his friend’s car when they were approached by armed assailants and he was violently gunned down. His friend suffered multiple gunshot wounds but survived the incident.

Shortly after the shooting, Siyabulela Mbane and Pumelele Mongo were tracked to Nelson Mandela Bay, arrested and charged with murder, attempted murder and the illegal possession of a firearm and ammunition. They were released on bail.

However, ballistic evidence from the scene revealed a can of worms no one expected.The firearm used in Gudula’s murder matched evidence from several shootings in Kariega, in the Nelson Mandela Bay Municipality, about 300km away.

With Potgieter’s background in fraud investigations and Rheeders’ experience with violent crimes, the detective branch in Komani was able to uncover that several of the murders in Kariega were tied to fraudulent funeral policy claims. In fact, it came to light that Gudula was also the victim of a hit, seemingly arranged by his own sister.

Police intelligence once again pointed the detectives to Nelson Mandela Bay and in Humewood, a neighbourhood in Gqeberha, they rearrested Mbane. The investigation also led to the arrests of Ntobeko Msome, his wife Xolelwa Gqirana Msome, Unathi Peter, Monelwa Gwane and Luxolo Mjadu in 2023.

Mbane, Peter and the Msomes are standing trial in the High Court in Gqeberha, where they face a litany of charges including murder, conspiracy to commit murder, fraud, racketeering and money laundering related to no less than nine murders and 29 fraudulent funeral policies.

The victims

Malibongwe Vena was shot and killed in KwaDwesi on 29 August 2021. The State alleges that Mbane took out three funeral policies on the deceased, claiming they were cousins, one month before he was killed. The claims totalled R250,000 and all three were repudiated.

Fundile Madwara was shot and killed in KwaNobuhle on 22 October 2021. The state alleges that Ntobeko Msome took out three policies on the deceased, claiming to be a cousin or “wider family” member. Xolelwa Msome also took out a policy on Madwara, claiming to be “extended family”. All four policies, taken out four months before his death, totalled R324,770 and were paid out.

Pumelela Matanda was shot and killed in KwaNobuhle on 14 November 2021. Three months before his murder, Xolelwa and Ntobeko Msome each took out a R150,000 policy on the deceased, claiming to be “wider family” and a nephew, respectively. Xolelwa took out a policy worth an additional R20,000 five days before the murder. All three policies were paid out.

Tumo Sali was shot and killed in KwaNobuhle on 7 January 2022. Ntobeko Msome took out two funeral policies on the deceased more than a year before his death. However, in the four months leading up to the murder, Msome and his wife took out three more policies. All were paid out, totalling R378,428. In the three weeks before Sali’s murder, Mbane also took out two funeral policies. One claim worth R99,829 was paid out and a R30,000 claim was repudiated.

Ayanda Mvemve was stabbed to death in Makhanda on 27 March 2022. In the four months leading up to his death, eight funeral policies were taken out on him. On four policies, Mbane claimed he was the deceased’s cousin. He received R242,290 in payouts. Peter claimed to be Mvemve’s nephew on two policies. The claims, with a combined value of R220,000, were repudiated. Similarly, Xolelwa took out two policies on the same victim, but the R170,000 was repudiated.

Sipho Jolingana was shot and killed in Kamesh on 24 July 2022. Xolelwa and Ntobeka Msome took out three policies on the deceased three months before his death. All three were paid out and they received R350,000. Around the same time, Mbane also took out a R100,000 policy on Jolingana, but it was repudiated. Their profit from the murders above totalled more than R1.7-million, while claims worth R770,000 were withheld.

Mbane, Peter and Ntobeko and Xolelwa Msome were also charged with the murders of Akhona Statu, Siyabulela Zagawe and Mthuthuzeli Mhlawuli, but no funeral policies were attached to their names. The four accused are scheduled to return to the high court for trial purposes.

After their initial arrest, Monelwa Gwane and Luxolo Mjadu were split from their co-accused, as it was determined they were not part of the larger syndicate. The State alleges that although Mjadu was not party to the murder plots, he had worked at one of the insurance companies and allegedly identified the trend of murders taking place shortly after policies were registered.He subsequently took out policies on Mvemve in anticipation of his murder.

Gwane, although also not directly implicated in the string of murders, is believed to be a close relation of the Msomes and bought into the schemes.

Concerning trends

When Potgieter and his team of four detectives were appointed to the MFM in January, they were handed more than 150 dockets. Potgieter said they were able to whittle down that number to a more manageable workload. Many of the initial dockets that were flagged as possible organised crime or fraudulent claims turned out to be individual incidents and were not related to larger syndicates.

“However, we are still looking at an estimated 60 murders related to syndicates orchestrating hits for funeral policies and insurance money,” Potgieter said.

According to the veteran detective, this modus operandi started some time ago, when people identified a problematic family member involved in drugs, gangs or some criminal activity. Believing this person’s days were numbered, they would take out funeral policies or life insurance in anticipation of their eventual demise. But it seems some families grew impatient and decided to expedite the process themselves or by employing “an expert service provider” or hit man.

“It would appear that the scheme proved lucrative enough for people to then establish elaborate networks, including family members, hit men and employees within the insurance industry, to build a criminal organisation,” Potgieter said.

Through its investigation, the MFM has noticed clear red flags and some concerning trends in the insurance industry that they hope to see changed.

“A big red flag comes in when a payout is repudiated and no one queries why. If you took out a legitimate funeral policy and you have been paying the instalments, surely you would feel entitled to that payout? But when you take a ‘you win some, you lose some’ approach, it makes us question your motives.”

A second red flag, said Potgieter, is that policies would start with minimal instalments and small payouts, but in the weeks leading up to the murder, the instalments were increased to boost the payouts.

Luckily, they have built good relationships with various banks and insurance providers, which have teams dedicated to helping the MFM verify fraudulent policies and claims.

But what is of major concern to the MFM is how easy it is to take out a funeral policy without the named person even knowing about it. “By law, you can only take out a funeral policy on a family member. However, no one checks the relation. You can claim you are a cousin, niece, nephew, distant family member, it doesn’t matter. And funeral policies are a volume business – the more you sell, the more commission you earn. So it’s in the salesman’s best interest not to look too deep into the family tree,” Potgieter said.

Some policies also have a clause where an accidental death doubles, or even triples, the payout – a sweet incentive for any hit man to help the process along.

“Since these murders came to light, we’ve been inundated with calls from the public wanting to know if there are policies on them that they don’t know about. People are petrified because they think their families are trying to kill them for money. But those people have no recourse. Even if they find out there is a policy in their name, only the person paying the instalments can cancel it,” Potgieter said.

Industry point of view

Most of the major financial service providers that offer life insurance and funeral policies are members of the Association for Savings and Investment South Africa (Asisa). According to the latest figures from its affiliates, covering 2024, so-called murder for money cases are among the least prevalent forms of fraud they encounter. However, Asisa regards it as the most important to stamp out.

Jean van Niekerk, convenor of the Asisa forensic standing committee, said all types of fraud are of concern, but the industry is particularly focused on clamping down on MFM cases. He said although murder in itself is already a serious crime, adding the intent of insurance fraud to benefit financially from someone’s death is not only callous, but also premeditated to the extreme.

Of the 5,505 fraudulent and dishonest claims reported by its members, 38 were identified as MFM cases. Two of those were life insurance policies and 36 were funeral plans. Luckily, Asisa’s members were able to prevent more than R6-million in fraudulent payouts, although R380,000 slipped through the cracks.

However, regardless of the prevented financial loss, each claim still represents a life lost. “While we can confidently say that criminals are highly unlikely to get away with this type of crime, the ultimate goal is to prevent someone from losing their life in the first place,” Van Niekerk said.

“Insurance companies pick up on this type of crime very quickly through data-sharing initiatives, but the process of gathering evidence and building a case that will stand up in court is often slow.”

Although the police’s MFM task team initially started in the Eastern Cape, Asisa, through the Financial Intelligence Centre, has expanded its operations in this regard to assist similar police task teams throughout the country. These initiatives are focused on identifying and combating fraudulent activity and there is a strong emphasis on collaboration and intelligence sharing.

Through these collaborations and expanded initiatives, certain red flags can quickly be identified and ultimately lead to full-scale investigations. Some of these red flags include:

Compromised documents or documents received from a medical doctor not on the medical practitioner list;

Death occurring during the waiting period for non-accidental causes;

Inability to verify the insured person’s identity or relationship to the policyholder;

No evidence of death recorded with the Department of Home Affairs;

Suspicious policy changes, such as adding a life or increasing cover shortly before a death; and

The same deceased person was insured under multiple unrelated policies.

In an effort to put more safeguards in place, Asisa established two new working groups to focus on solutions aimed at balancing the need for accessible risk products and preventing criminals from finding ways to buy policies with the intention of committing insurance fraud.

Asisa also called on the public to be vigilant and report any suspicious activity regarding life insurance and funeral policies. The industry body implored people to pay attention to the following:

Always keep personal information safe and private;

Do not sign any documentation that you do not understand;

Treat it as a red flag if anyone insists on taking out a policy on you and offers to pay the premiums, especially if the relationship is not long-standing or very close.

Be alert to unusual behaviour, particularly from family and close relations; and

Check your credit profile regularly to ensure that there is no unwarranted access on it. DM