Fraudsters siphon off R3 bln in Welfare money

2008-11-11 00:00

A forensic investigation has uncovered that “big names” in KwaZulu-Natal have been involved in defrauding the Social Development Department of more than R3 billion of taxpayers’ money in the past 14 years.

The year-long probe found that officials in the department colluded with people who are well known in the province, defrauding the department by claiming for work they did not do, forging quotations and inflating the cost of services they rendered to the department.

The findings have shocked the provincial cabinet, which during its meeting last week tasked Social Development MEC Meshack Radebe with discussing the findings with SAPS provincial Commissioner Hamilton Ngidi before arrests are made.

Addressing the media in Pietermaritzburg yesterday, Radebe said his department has enough evidence to ensure that the perpetrators are prosecuted and the money is recovered as soon as possible.

“The syndicate has been milking the department for more than 10 years. The investigation found that seven people have been involved. We believe that the department lost more than R3 billion because of the syndicate and this has had a major impact on service delivery,” he said.

Radebe said big names are involved, but he would not be drawn into saying whether the culprits are politicians. “We have all the evidence, which includes affidavits from people who told us that they were used by crooks to get money from the department. We believe that we have a strong case against them. It will be very easy for the police to arrest them and prosecute them,” he said.

Radebe said the department will soon start taking action against the officials who colluded with the crooks.

The fraud included 10 security companies inflating the number of security guards they posted. Some security companies awarded tenders were not registered with the private Security Industry Regulatory Authority, which is a criminal offence.

“… a person who had no registered company was given an R8,1 million tender to render services … He only registered the company months after the money had been given to him,” Radebe said.

More than 700 non-functioning NGOs were given money. “One teacher who ran an NGO was given R500 000 and he used it to buy a house for himself,” he said.

The investigators also found that procurement policies were manipulated by forging quotations.

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