FIC insight into Covid-19 fraud recovery of R1.8 billion

PPE under spotlight. file image

PPE under spotlight. file image

Published Mar 25, 2023


AS one of the biggest PPE fraud cases runs in court, the National Education Health and Allied Union (Nehawu) has called on investigations to continue into PPE and Covid-19-related fraud.

The Financial Intelligence Centre has given insight into their investigations of Covid-19 fraud, and has assisted in the recovery of criminal assets relating to Covid-19 TERS and PPE fraud amounting to R1.8 billion. They have secured 113 cases, with 47 prosecutions and finalised 44 convictions.

Nehawu spokesperson Lwazi Nkdonzi said many health workers had lost their lives during the pandemic and called for investigations to continue.

“As Nehawu, we have always maintained that there ought to be law enforcement agencies who must work with speed to prosecute all of those implicated in the PPE corruption scandal. Our members and workers died in the midst of Covid-19 without any Personal Protective Equipment as a result of the corruption that had taken place.”

This week, Sipho Mapalala appeared before the Nelspruit Commercial Crimes Court and is accused of corruption and bribery of an SIU Investigator worth R50 000. The case has been postponed to April 5 for sentencing.

He is believed to have attempted to make a Covid-19 procurement investigation against Gugu Bulungu disappear.

In a separate matter, Nachy Britz, her husband, Gerhardus Albertus Britz, and her father, Hendrick Jaap Grimbeek, were arrested by the Hawks last week and appeared in the Simon’s Town Magistrate’s Court for six counts of fraud.

The State is set to prove that the trio misled a complainant to purchase personal protective equipment, indicating that she was a legitimate supplier of PPE worth R6.8 million.

One of the biggest PPE cases involved four South African National Defence Force (SANDF) members who are facing allegations related to PPE fraud and corruption to the tune of R273 million.

SANDF chief General Rudzani Maphwanya said they strongly condemned this kind of behaviour from members of the SANDF.

In a statement, the Financial Intelligence Centre spoke of one of their recent cases where they managed to secure a conviction and sentencing of an accountant involved in Covid-19 TERS fraud. “In its first two years since its inception in 2020 to date, the Fusion Centre assisted in the recovery of criminal assets totalling R1.8 billion. Also, to date, 113 cases were enrolled for criminal prosecution, of which 47 matters were finalised with 44 convictions.

“The collaborative efforts of the partners are illustrative of how diverse departments and entities can work together in the fight against financial crime.

“A recent example is the sentencing of Mark Jonathan Vorster earlier this month in the Pretoria Specialised Commercial Crimes Court. Vorster is serving six years imprisonment for 11 counts of fraud, two years for theft and four years for laundering more than R800 000 of the government's Unemployment Insurance Fund (UIF) Temporary Employer/Employee Relief Scheme (TERS).

“Vorster, a self-employed chartered accountant, will serve his sentences concurrently.

“Central to the conviction of Vorster and several other recent arrests and convictions related to the misuse of Covid-19 relief funds is the collaboration between the Fusion Centre partners who are working together to expedite the fight against financial crime.”

The Public Disclosure Report of the Western Cape Government for the 2022/23 financial year revealed that the Covid-19 Expenditure for PPE Transaction detail totalled R285 419 995.

The report also details the top PPE commodities and expenditures, such as PPE non-sterile examination gloves totalled R114.40m, surgical masks for health care workers at R75.51m, respiratory masks at R4.6m, multi-purpose sanitisers and disinfectants at R3.95m and protective overalls at R2.07, PPE body bags at R0.46m.

Foster Mohale, the spokesperson for the National Health Department, said: “There is no doubt that the PPEs were needed to stop the spread of the pandemic, but any means of acquiring them without following proper procurement processes put in place, is not condoned.

“The Department does not condone any corrupt and fraudulent activities in the procurement of medical supplies, including the PPEs. Hence we leave everything in the hands of the law enforcement agencies to investigate any corrupt and fraudulent activities linked to the procurement of the PPEs.”

SIU spokesperson Kaizer Kgangyago said their works were completed and were now in the hands of the courts: “All the PPE investigations are finalised. There are no further investigations.”

The SIU has investigated 5 467 contracts awarded to 3 066 service providers with a total value of R14.3 billion.

Weekend Argus

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