A whistleblower, who claims that for four years he was “forced” to take part in a massive insurance fraud scam involving police officers, big car dealers, panel beaters and insurance assessors, has spilled the beans on how the scam brought down General Insurance Botswana (GIB).
GIB, Botswana’s first locally registered insurance company, was recently placed under provisional liquidation by the Registrar of Insurance following a court order issued by Justice Maruping Dibotelo.
In a letter to all local Insurance companies, a copy of which has been passed to The Sunday Standard, the anonymous whistleblower names another local insurance company saying it could be next in line to collapse “because there is a lot of cheating by their assessors” and one big local panel beater.
The whistleblower also names four big car dealers saying their service managers and salesman are in on the fraud scam. He further explains how the car dealers’ customers and insurers are being ripped off.
Detailing how the fraud is carried out, the whistleblower claims that when a car that has been involved in an accident ‘is towed into the shop for repairs with minor damages the panel beaters, mostly of Asian origin, are asked to fake a major damage to the vehicle to cheat the assessors by stripping the vehicle taking parts which are not damaged and exchanging them with damaged parts which were stripped from similar cars which were repaired before.
“After the assessors have authorized new parts, the real parts for the car which were not damaged are then taken back and used to repair the car instead of buying new ones.
“In some cases, when accident vehicles are brought in with minor suspension problems, the suspension is removed, hidden and then a seriously damaged suspension fitted in. After the quote for a new suspension has been approved by the assessor, the old suspension is fitted back into the car and the panel beater then pockets money for a new one.
“This also happens on cars which are slightly damaged in the front, while fans and radiators are not damaged: The car is stripped and damaged radiators and fans are brought in and put next to the car so that the assessor can authorize the purchase of new ones. Once the authorization has gone through, the parts which had been removed are fitted back.”
He further states that, in some cases, when cars are brought in with minor damages, “we were asked to disconnect vacuum pipes to the head lamps and wires to sport lights and then the estimator would quote for new lights and fog lamps and when authorized we would then use old lights and just reconnect the pipes and electric wires.”
To back up the claim, he cites one incident, lists the car by registration numbers and names the insurance company that was defrauded.
Collins Newman & Co, lawyers acting for one of the big companies named in the alleged insurance fraud scam, has written to local insurance companies that, “the anonymous letter which is not dated or signed makes very slanderous and damning allegations of corruption, bribery, cheating, fraud and dishonesty on the part of our client. The anonymous letter generally imputes unprofessionalism of the worst kind by our client by alleging that old parts are fitted into damaged vehicles in order to defraud insurance companies and that our client bribes assessors and certain motor vehicle dealers in order to attract business. All the allegations raised in the anonymous letter are without foundation and untrue.”
Collins Newman & Co further argues that, “the anonymous letter purports to be from a current or former employee of our client. Investigations have been carried out and it has been conclusively ascertained that this letter was not authored by a current or former employee. The anonymous letter is a scurrilous attempt by a professional/business rival, which individual/entity has a motive to destroy the reputation and business of our client by making unfounded allegations to clients within the industry.”
The whistleblower says the panel beaters have police officers in their payroll and, in some instances, they use their connections in the police service to organize fake police reports for clients who were involved in accidents while drunk or whose cars were involved in accidents while being driven by drivers who do not have driving licenses. He cites an incident where a Toyota car rolled in Kanye while being driven by unlicensed children and the panel beater helped the owner get a fake police report from Martins Drift police station by bribing police officers.
Sunday Standard investigations turned up suggestions of widespread fraud and corruption among panel beaters and assessors. In one incident, a big panel beating company, not listed in the whistleblower’s letter, took money from an insurance company after claiming to have fitted new parts in a car brought to them following an accident. The car owner not happy with the workmanship took the car to an authorized dealer in South Africa ÔÇô name withheld ÔÇô who prepared a report that the parts had not been replaced but merely refurbished. The case is now a subject of a legal dispute between Mosweu and Co legal practitioners, representing the aggrieved client, and Salbany Torto Attorneys, representing the panel beater.
Sunday Standard investigations further turned up evidence of widespread collusion and bid rigging among panel beaters. It emerged that most panel beaters collude to rig the bidding process so as to create an impression of open competition. The panel beater who receives the client first would fake two higher quotes from colluding panel beaters in the phony bid scheme.