Bank 'kite flyer' jailed for R3.5m fraud

2015-05-22 22:43


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George - A building contractor was jailed for six years on Friday, on multiple fraud charges involving a bank “kite-flying” operation that generated fictitious funds running into millions of rands to see him through a financial slump.

Kite flying involves the deposit of worthless cheques into a bank account, to create a false credit balance.

By way of special arrangements with bank staff, the account holder then empties the account for his own benefit, without having to wait for the worthless cheque to first be cleared and then dishonoured.

When such a worthless cheque is finally cleared, the credit balance reflects an unauthorised  overdraft balance.

Mossel Bay building contractor Stefanus Heydenreich, 40, appeared in the Bellville Specialised Commercial Crime Court, where he pleaded guilty to 38 counts of fraud, involving R3.5m.

He appeared before Magistrate Sabrina Sonnenberg and said he was unable to repay the bank.

He told the court he had made the wrong decisions, as he battled to keep his construction business financially afloat.

His wife, who attended the proceedings, burst into tears when the magistrate pronounced the sentence.

Heydenreich faced a minimum sentence of 15 years for fraud involving more than R500 000, but the court ruled that there were compulsive and exceptional circumstances justifying a less severe sentence.

The magistrate said the purpose of sentencing was not to break the offender with a sentence that was excessively harsh.

In Heydenreich’s case, the purpose was to make him think twice before repeating the offence.

The communities, both national and international, had to know what he had done, and what his punishment was.

She said Heydenreich’s fraudulent the kite-flying operation had caused the bank a R3.5m loss, and bank staff who had made the operation easy for Heydenreich had lost their jobs.

The frauds were perpetrated over a period of two years, and not on the spur of the moment.

She agreed with prosecutor Derek Vogel that banks needed protection from fraud, and that people should not regard banks as a bottomless pit with endless funding.

She said Heydenreich suffered from epilepsy and a sleeping disorder known as sleep apnea, and this together with the facts that he was a first time offender, and had pleaded guilty so as not to waste the court’s time, had saved him from the maximum sentence.

A mere warning as a sentence was laughable, while a wholly suspended prison sentence, as suggested by the defence team, advocate Stanley O’Brien and attorney Henrico Groenewald, was too lenient, she said.

She said a fine out of the question, as serious offenders should not be allowed to buy themselves out of prison.

Read more on:    cape town  |  fraud  |  crime

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