Presentation to the Standing Committee on Public Accounts (SCOPA) on the status of COVID-19 Corruption Related Cases
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Presentation to the Standing Committee on Public Accounts (SCOPA)
on the status of COVID-19 Corruption Related Cases
Presented by Lieutenant General (Dr/Adv)SG Lebeya, the National Head of the Directorate for Priority Crime
Investigation and supported by the Anti-Corruption Task Team EXCO 1
PRESENTATION OUTLINE
2
1. Mandate
2. Governance Model
3. Approach and Methodology
4. Interventions to Address Corruption and Maladministration Related to COVID-19 Relief
Funds
5. Update on the Four Operational Pillars:- (Prevention, Early Detection, Investigations,
Prosecutions and Resolution)
6. Overview of Cases in Court
7. Timeline of Cases Under Investigation
8. Conclusion
MANDATE OF THE FUSION CENTRE AS ASSIGNED BY THE ANTI-CORRUPTION TASK TEAM (ACTT)
EXECUTIVE COMMITTEE
MANDATE 3
Platform for law-enforcement collaboration to prevent, detect early, intelligent-led investigations, prosecute and
recover assets relating to CORRUPTION OR RELATED ACTIVITIES IN RESPECT OF COVID-19 RELIEF to
counter the detrimental economic and social impact of the pandemic.
WHY? There are those who are inclined to engage in activities to illegally benefit from Government’s relief and
containment measures.
• Globally there has been a misdirection of government funds and increased corruption relating to covid-19 funds,
• Swift and effective response will serve as a strong deterrence.
FOCUS
Real time risk detection, followed by prompt coordinated action by law-enforcement entities to ensure expedited
investigation, prosecution and recovery of assets.
HOW?
• This work is guided by the provisions of the Disaster Management Act (No 57 of 2002).
• The ACTT, including the National Treasury has identified areas of risk (e.g. in the procurement space), in line with
international trends, that indicate increased opportunities for fraud and corruption during times of health crises.
CONFIDENTIAL
GOVERNANCE MODEL OF THE FUSION CENTRE
Justice Crime Prevention and Security:-Director-Generals Cluster
ACTT Executive Committee
Operational Coordination Committee (OCC)
Engagement • Provide guidance to ensure optimal functioning of the Fusion Centre
interfaces • Oversee processes to detect and fast track investigations
FUSION CENTRE (located at FIC head office)
Operational Hub (OH) Administrative support
• Coordination of the activities at the Fusion Centre
• Ensure early detection of possible criminal activity
• Manage case intake process for cases requiring a Decentralised services in departments
multi-agency, multi-disciplinary approach Located at National, Provincial/Regional
• Support to prioritised investigations through structures and Nodal Points
collaboration and joint focus on investigations
Functional and specialised staff, such as
4
investigators and prosecutors
Slide 4 of 22
5
FUSION CENTRE APPROACH AND METHODOLOGY
PREVENTION
Operational Coordination
FOCUS
• Ethics management Committee
• Risk identification
• Data collection and management
• Enforcement of accountability
• Communication FUSION CENTRE Engagement interfaces
Operational Hub FOCUS
(located at FIC) • Criminal investigations (DPCI, DS &
PROACTIVE DETECTION IPID)
• Maladministration Investigations (SIU)
• Media analysis (GCIS) RECEIVE REPORTS Administrative • Criminal recoveries (NPA-AFU)
• Open source information (all agencies) OR CASE PLANS Support • Civil recoveries (SIU)
o Liaison, social media etc.
• Whistle blower reports:
• Identification of potential cases
o Sect 34 (PRECCA) (DPCI)
• Register an enquiry or case docket
o Anti-Corruption hotline (PSC)
• All departments/agencies verify against own databases and provide enhanced information or
o Crime Stop (SAPS)
intelligence
• Intelligence reports
• Allocate matter for investigation to the relevant department or provincial office
o Financial intelligence (FIC)
• Collect evidence (witness statements, documentary evidence, financial records and bank
o Other intelligence reports
documents)
(CI, SSA & NICOC)
• Conduct financial investigation
• Information from COVID-19 response
• Securing of exhibits (including freezing of stolen funds)
structures (e.g. NCCG)
• Evaluate/analyse evidence (forensic analysis of transactional data) RECOVERY &
• Initiate Recovery Processes (e.g. POCA – SIU Tribunal) PROSECUTION
INVESTIGATION • Prepare case for prosecution, or prepare report for litigation
• Process fortnightly progress reports to Operational Hub
Decentralised services in departmental structures
5
(Located at National, Provincial/Regional structures and Nodal Points)
PILLAR 1: PREVENTION
INTERVENTIONS TO ADDRESS CORRUPTION AND MALADMINISTRATION
RELATED TO COVID-19 RELIEF FUNDS
6
PILLAR 1: PREVENTION
INTERVENTIONS TO ADDRESS CORRUPTION AND MALADMINISTRATION RELATED TO COVID-19
RELIEF FUNDS (1a)
In response to allegations of corruption, or related activities, including maladministration of funds in respect of the SA’s
government’s relief and containment interventions (such as the Solidarity fund) which are intended to counter the
detrimental economic and social impact of the COVID-19 pandemic, the Fusion Centre was activated on 18 May 2020 in
collaboration with other law enforcement agencies.
• The Fusion Centre is directed at detection, investigation, prosecution and recovery of assets, through a multi-disciplinary
approach.
The Fusion Centre comprises of the following agencies :
• Directorate for Priority Crime investigation (DPCI)
• National Prosecuting Authority
• Specialised Commercial Crime Unit (SCCU)
• Asset Forfeiture Unit (AFU)
• Detective Service in the South African Police Service (SAPS)
• Special Investigating Unit (SIU)
• Financial Intelligence Centre (FIC)
• South African Revenue Service (SARS)
• Intelligence Communities
• State Security Agency
• Crime Intelligence in SAPS 7
PILLAR 1: PREVENTION
INTERVENTIONS TO ADDRESS CORRUPTION AND MALADMINISTRATION RELATED TO COVID-19
RELIEF FUNDS (1b)
• Engagement interfaces have been established with departments in key areas affected by corruption
around COVID-19 related procurement.
• 23 July 2020: Presidential proclamation was obtained by the Special Investigating Unit (SIU).
• 6 August 2020: Establishment of the Inter-Ministerial Committee (IMC) to improve transparency and
accountability with regard to Covid-19 procurement, and review the current approach to fighting
corruption and make proposals to strengthen the fight against corruption.
• The report released by the Auditor-General in September 2020 is being analysed to identify other
viable matters for investigations.
8
PILLAR 1: PREVENTION
INTERVENTIONS TO ADDRESS CORRUPTION AND MALADMINISTRATION RELATED TO COVID-19
9
RELIEF FUNDS (1c)
• The DPCI has further established teams in all provinces including Head Office. All teams are led by
officers at a level of Brigadier, comprising of all capabilities within the DPCI.
• A Major General from the Priority Crime Specialised Investigation has been appointed to oversee and
monitor all investigations relating to COVID-19 pandemic nationally as well as to assist with any challenges
that may arise from the investigations.
• These teams are working in collaboration with the NPA as well as the SIU in the Provinces.
Breakdown of the National and Provincial teams
HO GP FS NC EC MP LIMP KZN NW WC
18 9 6 5 9 7 6 17 8 8
9
CONFIDENTIAL
PILLAR 2: EARLY DETECTION
• Daily media scan (key words supplied by the Fusion Centre to GCIS)
• 174 matters identified through early detection, originating as follows:
Crime Financial Intelligence Media National National Open Public Section 34 Auditor SIU National
Stop Intelligence Reports Reports Anti- Core Source Complaints Reports - Proclamation Treasury
Corruption Command General Report
0 15 0 37 0 0 6 51 0 24 41 0
Slide 10 of 12
10CONFIDENTIAL
PILLAR 3: INVESTIGATION (1a) 11
The following table and map provides a breakdown of the current case load as well as an overview of the
cases/incidents per province.
Current case load: 174 (one-hundred-and seventy-four) matters, with six (6) criminal cases, already on
the court roll.
Category Incidents Cases Grand Total
Under Investigation 114 40 154
Provisionally Withdrawn 1 1
Case In Court 0 6 6
Closed 10 3 13
Grand Total
Slide 11 of 12
124 50 174PILLAR 3: INVESTIGATION (1b)
BREAKDOWN OF CORRUPTION-RELATED MATTERS INVESTIGATED BY THE DPCI
24 cases and 27 enquiries are investigated by the DPCI
Break down of Cases and Enquiries investigated by DPCI
Cases and enquiries under investigation include application of relief fund through the UIF-TERS (8), Solidarity fund (2), the
abuse of NGO’s (3) and Procurement fraud (38). Cases reported are investigated at provincial level as listed below:
WORKLOAD HO GP FS NC EC MP LIMP KZN NW WC TOTAL
CASES 3 9 0 1 5 1 2 2 1 0 24
ENQUIRIES 3 1 11 1 2 0 2 3 2 2 27
TOTAL 6 10 11 2 7 1 4 5 3 2 51
COURT ROLL 1 4 0 0 0 0 1 0 0 0 6
NO. OF ACCUSED 6 (NGO) 11 (UIF) 2 (UIF) 19
12CONFIDENTIAL
PILLAR 4: PROSECUTION & RESOLUTION 13
Focus Type of investigations Value Comments
Recovery
Freezing of cash in 64 bank accounts –
R29.8m R28.7m (9 Sept)
section 34 FICA
AFU Recoveries (POCA)
• Chapter 6 – Preservation (4 matters) R5.4m R3.37m (9 Sept)
• Chapter 6 – Forfeiture (0)
• Chapter 5 – Restraint (0)
• Chapter 5 – Confiscation (0)
SIU Recoveries (Tribunal) R38,6m R28,5m (9 Sept)
SARS Recoveries R50m R0 (9 Sept)
6 matters at
Criminal
Prosecutions court (19
Prosecution
Slide 13 of 12
accused)OVERVIEW OF CASES IN COURT
1.The State Versus Tshepang Harward Phohole and 5 others
CONFIDENTIAL
(Brooklyn CAS 274/05/2020)
y
• An employee of an entity styled CSG Resourcing submitted a claim for UIF – Temporary Employer
Relief Scheme (TERS) funding for employees on their payroll. The claim was lodged and upon enquiry of
the payment it was noted that the amount of R 5,688,802.20 was diverted into a Capitec bank account.
• Six (6) accused namely; Tshepang Harward Phohole, Taetso Zulu, Tsietsi Godfrey Mojela,
Itumeleng Charmain Masoko, Tebogo Andries Masoko and Dilsfinest Café (Pty) Ltd are facing
charges of fraud and money laundering and the matter has been remanded until 16 November 2020.
• The AFU obtained a preservation order for five vehicles which were seized at the accused premises. They
are currently in the process of lodging an application for final forfeiture, anticipated to be lodged by the end
of October 2020.
Slide 15 of 22
152.The State Versus Thembisile Patient Khumalo and 5 others
CONFIDENTIAL
Sunnyside CAS363/06/2020 & PTA Central CAS 236/7/20
• The Director of the South African Nursing Student Fund (Pty) Ltd reported that he was contacted by
the accused, who informed him that his NPO received R50 million from the Department of Social
Development. They directed him to meet with them to discuss the sharing of the funds.
• Investigations revealed that the Director and his spouse’s names were fraudulently used to secure the funds.
• Due to a quick intervention, the Department did not pay out the R50 million.
• Six (6) accused, namely; Thembisile Pateint Khumalo, Mulunda Ngole, Julius Jeremiah Mbombo,
Barbara Ndebele, Maude Ntsukamiela and Zechias Tafadzwa are facing charges of Fraud, extortion
and intimidation, and the matter has been remanded until 01 December 2020 for further investigation.
Slide 16 of 22
163.The State Versus Thokozani
CONFIDENTIAL
Mchunu and 2 others
Pretoria Central CAS 81/07/2020
• Information was received that the amount of R692,185.55, forming part of a UIF Relief Fund claim of
an entity styled National Adhesives, was erroneously transferred to a Capitec Bank account of the
accused.
• Three accused namely; Thokozani Mchunu, Nqobile Mzimela and Sboniso Percival Khanyile are
facing charges of Theft and Money Laundering, and the matter has been remanded until 30 October 2020
for further investigation.
• A preservation order of R265 000 has been granted.
Slide 17 of 22
174.The State CONFIDENTIAL
Versus Moses Leso
Pretoria Central CAS 82/06/2020
Information was received that the amount of R 4,717,285.65, forming part of a UIF - Relief Fund claim
of an entity styled Mega Bus, was erroneously transferred into a Capitec Bank account. The recipient is a
pensioned employee of the entity, who currently receives pension benefits from the Department of Labour.
The accused, Moses Leso, refunded the fund to the value of R4,1 Million, having spent R600 000. A
preservation order thus not done.
The accused are facing charges of Theft and Money laundering, and the matter has been remanded until
30 October 2020.
Slide 18 of 22
185. The State Versus HlamalaniCONFIDENTIAL
Dorris Mashimbye and Masenyane William Khosa
Malamulele CAS 85/10/2020
• The matter relates to the misappropriation of UIF R2.2 million of UIF funds.
• The Manager of some EPWP group of workers who allegedly claimed UIF for 224 employees on their behalf
at the Mtititi Drop in centre, misappropriated these funds to the amount of R 2,2 Million. She allegedly spent
the bulk of the funds, and transferred some to her family members.
• The accused, Hlamalani Dorris Mashimbye is facing charges of fraud and money laundering, and the
matter has been remanded until 19 October 2020 for a formal bail application.
• A second accused, husband to accused no 1, Masenyane William Khosa was arrested while he was
withdrawing money from accused no 1 bank account. He appeared in court on 16 October 2020.
Slide 19 of 22
196. The State Versus Seunky Thulane Vuma
CONFIDENTIAL
Sandton CAS 245/05/2020
• The complainant in this matter reported that although his company, KBAC FLOORING, applied for UIF
and the application was approved, payment of the approved funds, of R128 878.00, was not made to his
company, but to the company’s sub – contractor. The sub-contractor spent the funds for his own personal
gain.
• The accused, Seunky Thulane Vuma is facing charges of theft and money laundering, and the matter has
been postponed to 29 October 2020 for further investigation.
Slide 20 of 22
20TIMELINE OF CASES UNDER INVESTIGATION
CONFIDENTIAL
TIMELINE OF CASES UNDER INVESTIGATION
• Fusion Centre cases are mostly ready for enrolment within months in contrast with
general serious corruption taking often years.
• Below timeline with period in days from opening docket to enrolment – 14 of 44 cases
ready (Three ready by 31 January 2021)
DAYS FROM DOCKET OPENED
TO FINALISED FOR DECISION
FUSION CENTRE CASE INVESTIGATION TIMELINES
99 78 218
32 113
95
65 65 65 65
60 86
PROJECTED ENROLMENT DATE / FINALISED INVESTIGATION
22
Slide 22 of 12CONFIDENTIAL
Factors Affecting Timelines of Cases
• Several companies/individuals mostly involved – obtain account statements, opening of
accounts, authorised signatories, changes, ‘red flag’ transactions to follow up.
• Company documentation – registration, board of directors, information of persons holding crucial
capacity in office (CFO, CEO, Supply Chain Managers).
• Tender processes – all bidding process documents, statements, meeting minutes.
• Obtaining search and seizure warrants, sec 205 authorisations, under cover operations.
• Determine witness statements, evidence from documents / computers / order slips and/or
invoices, records of assets and constant evaluation of evidence obtained or to be obtained;
direct and circumstantial evidence.
• Legal instruments including prescriptions in Acts, proclamations and others.
Slide 23 of 12
23CONFIDENTIAL
CONCLUSION
• There is a huge influx of cases.
• AG’s Special Report – 80 000 exceptions/illegal payments identified which need to be
investigated/follow-up.
• The Fusion Centre does prioritise cases identified to be heard in court.
• A multi-disciplinary and collaborative approach between the various law enforcement
agencies in the Fusion centre has yielded positive results.
Slide 24 of 12
24Thank you
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