An employee from the City of Tshwane's Finance Department was suspended on Tuesday following internal investigations that implicated him and two colleagues in a fraud scheme involving over R10 million between May 2021 and January 2022.

Two of the employees implicated in the fraud case were arrested and recently appeared in the Pretoria Magistrate's Court, where they were each granted R10 000 bail.

However, one of them was unable to post bail and remains in custody at Kgosi Mampuru Correctional Services.

The third employee, who is also wanted by the law, has been avoiding arrest by checking himself into a hospital after learning that the police were closing in on him.

Municipal spokesperson Selby Bokaba said discussions with the Asset Forfeiture Unit of the National Prosecution Authority are progressing, focusing on the potential freezing of assets belonging to the trio implicated in the fraud case.

He said the ultimate goal is to forfeit these assets to the State.

“Group Financial Services recently requested Group Audit & Risk (GAR) to conduct a probe after noticing suspicious inter-account transfers between municipal user accounts. The in-depth investigation by GAR’s Ethics Management and Forensic Services Division uncovered more than 200 transfers of debit balances that were made from various municipal user accounts into a single municipal ghost account, amounting to more than R10 million during the period between May 2021 and January 2022,” he said.

According to Bokaba, the employees' alleged modus operandi, which suggests a syndicate, involved collusion between members of the public and city officials.

He said the scheme entailed manipulating user debit balances by transferring funds, either in full or partially, into municipal accounts created by the syndicate or its affiliates.

“The user would either be part of the syndicate, whereby they pay an amount less than their debit balance to the city official in return for the wipeout or what the user may have intended to pay. The employees would collect what the user had intended to pay, and instead of paying that amount into the city’s account, the user’s account would be credited through the fraudulent transfer of the debit balance into the ghost account. They would then pocket the amount that the user had intended to pay,” he said.

Bokaba explained that as part of the city's efforts to avoid merely opening criminal cases for the sake of having a case number, a directive was issued to the investigation team.

The directive requires that referrals of criminal cases to the police must be based on thorough forensic investigations, promoting effective collaboration with law enforcement agencies.

In a separate but similarly concerning case, Bokaba said the investigation team has sought assistance from the South African Police Service to probe another suspected syndicate operating within Housing Company Tshwane (HCT).

The allegations centre on a leasing administrator and leasing supervisor who purportedly accepted cash bribes in exchange for granting lease contracts to unqualified individuals.

Bokaba said, “These unqualifying members of the public end up not paying rent, resulting in a financial loss to HCT. The implicated officials were served with suspension letters last Thursday, while the internal forensic investigations are under way.”

rapula.moatshe@inl.co.za

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City of Tshwane uncovers R10 million municipal fraud ring, suspends finance official