Stock Loss Syndicate exposed
A National distribution group with a warehouse operation in Durban approached Justicia Investigations after severe stock losses came to light.
After consultation with the client it was decided to infiltrate a covert operative into the business to establish how the stock losses occurred and who the responsible persons were. The covert operative soon realized that a syndicate was operating in the business with links between warehouse personnel and delivery crews evident. The warehouse personnel would arrange extra stock to be loaded onto the vehicles which would then be sold on route to a few stores in the Durban CBD. The warehouse personnel would alter the documents to cover some of the stock losses in return for their share of the profit. The process to cover stock variances became more difficult as the suspects became accustomed to the extra income and greed set in. The security officers whose duty it was to scrutinize the stock being loaded formed part of the syndicate and demanded their share in the spoils. This process took a few months, as trust relationships had to be fostered with the syndicate members. It was established through the operatives information that the stores were located in close proximity to each other. A geo-fence perimeter of several blocks around the target locations was established through the application of the client’s vehicle tracking facility. The client received sms notification on every visit to the “fenced” area by vehicles from his fleet. Tracking reports were then linked to trip-sheets for evidential purposes. The investigation team set up surveillance on the target locations and obtained video evidence of the transactions taking place. On some transactions the delivery vehicles deviated from their route with approximately 50km to make the sale. Not only did the client suffer huge stock losses as a result of the unscrupulous behaviour of his employees but his operational costs increased as he incurred unwanted expenses on fuel. The operative was tasked to infiltrate the syndicate in order to expose the individuals involved. This would allow the investigation team to have a full grasp of the extent of the problem. Armed with this inside knowledge, strategic planning was set about and regular progress reports submitted to the client throughout the operation. A presentation was made to the client on the evidence gathered. It was decided that there was sufficient evidence for the investigation team to proceed with the polygraph testing and questioning of implicated parties. All the employees agreed to this process except for one person who absconded from the site when he got wind that he was wanted for questioning. The polygraph tests confirmed that all the employees brought in for questioning were involved in organised theft from the warehouse. The investigation team managed to obtain fifteen(15) confession statements through further questioning. This is yet another recent success story from the case files of Justicia Investigations. It should be seen as a clear example of how an intelligence driven operation can expose syndicated theft within an organisation. The investigation further aided the client to identify weaknesses in his operations that required corrective action.