Fraud News 2007

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 Fraud News August 2007



Husband and wife guilty in massive pension scam


An elderly couple have pleaded guilty in a plea-bargain agreement relating to their involvement in one of South Africa’s biggest pension fund scams, totalling R213- million.

Roland Edward Bailey, 64, and his wife, Shirley Anne Bailey, 63, handed themselves over to police at OR Tambo International airport last year after their son, Adrian Bailey, was arrested to stand trial with 12 other men accused of defrauding several pension funds of R213-million in a scheme called “the Ghavalas Option”.


‘At last there is action on SABC’s top lawyer’


Political parties yesterday welcomed a police investigation of fraud allegations against suspended SABC legal services head Mafika Sihlali.

The Times has established that Johannesburg’s commercial crimes unit is investigating Sihlali for fraud, amounting to about R1,8 million, that was discovered by an internal audit . The audit report fingered Sihlali as authorising “inflated” payments to law firms to which he had given work.




Scorpions still investigating Durban university


The Scorpions are investigating the Durban University of Technology (DUT), but the National Prosecuting Authority said it could not release any details about the investigation.


NPA deputy spokesman Tlali Tlali confirmed that an investigation had been underway at the institution for some time and that “we are making significant progress”.




Pentagon's $1m bill for washers worth $0,38


Plumbers may have been blamed before for excessive bills. But none has come close to matching an extravagant claim by a South Carolina firm: almost $1-million for two metal washers worth 19 United States cents each. (Read more...)


Fingering the corrupt


The latest report of the Public Service Commission (PSC) into cases of financial misconduct in national and provincial government departments provides a snapshot of on-going high levels of fraud and theft, but also exposes the weakness of the PSC as an oversight body. (Read more...)




Fidentia home: judgment reserved


Judgment was reserved in the Cape High Court on Friday on a bid by curators to attach the upmarket Cape Town home of Fidentia boss J Arthur Brown.

The curators are also seeking the attachment of a vacant plot next door to the Sunset Beach mansion.

They claim the two properties, valued at a combined R15 to R20-million and registered in the name of trusts, have been bought with money Brown misappropriated from Fidentia. (Read more...)


Alleged fraudster to face the music


A 48-year-old Kraaifontein woman, who worked at Old Mutual, is facing 251 fraud charges in the Bellville Commercial Crimes Court.

She allegedly used a colleague's staff code to authorise payments from the company to herself and her son.

The alleged fraud took place between January 2003 and October 2006 and included 251 transactions, to the value of R1,12-million. (Read more...)


Coega boss in fraud rumpus


THE Deputy-Director of Public Prosecutions has been ordered to investigate bringing fraud charges against Coega Development Corporation CEO Pepi Silinga and nine of his directors.


The matter relates to an out-of-date procurement policy based on which Coega bosses allegedly entered a tender agreement – despite knowing it was illegal.


Judge Johan Froneman ordered the investigation yesterday, following an application in the Port Elizabeth High Court by the Sakhisizwe empowerment construction joint venture. (Read more...)




Police arrest Somerset West high-flyer


Police have ticked off another name on their crime high-flyer wanted list when they arrested a Somerset West man on charges of fraud involving more than R900 000.

Police spokesperson Captain Elliot Sinyangana said on Thursday the man, who was arrested at his home on Wednesday, was at the centre of further investigations, especially concerning his links to others on the so-called high flyers list. (Read more...)


Corruption 'should be a crime'


The Public Service Commission (PSC) says it is disturbed that most public servants involved in financial misconduct are only tried internally and not criminally.

The comment was made during the release of its 2005/5 financial misconduct report which showed that national and provincial governments had jointly lost at least R46,5-million as a result of unauthorised, irregular, fruitless and wasteful expenditure as well as criminal conduct.

PSC director-general Odette Ramsingh said they were concerned that in most cases those found guilty were not reported to the police. (Read more...)


Two nabbed for “Black Dollars”


DURBAN – Police arrested two foreign nationals on Thursday for fraud after they allegedly helped “investors” to part with their money by changing their R100 notes into US100 dollar bills. (Read more...)


FIFA sets up agency to guard against betting fraud


FIFA announced today that it has set up its own company to safeguard football against possible match-fixing and betting scams in the run-up to the 2010 World Cup in South Africa.

World soccer's governing body said in a statement that it was extending its early-warning system for the monitoring of sports betting to include the qualifiers for the 2010 finals. FIFA said that the company, named Early Warning System, was founded specifically for this purpose and had its own offices and staff in Zurich. (Read more...)


ANC MP takes on whistleblower


What happens in the bedroom should stay in the bedroom, and therefore the SABC's whistleblower must face the music for exposing corruption, was how one MP put it on Wednesday.

The ANC's Eric Kholwane was explaining why the SABC heeded to take action against an employee who leaked a damning internal audit report to the media.

He told parliament's communications portfolio committee that no organisation could function if staff were allowed to leak internal information at will. (Read more...)


Identity theft for fraud ‘costs billions’

IDENTITY theft had become the fastest growing commercial crime in the world and cost governments worldwide billions of dollars a year to control, Dave Loxton, a partner at law firm Bowman Gilfillan, said yesterday.

Identity theft occurs when one’s personal information is stolen and used to commit fraud and other crimes. (Read more...)




Don't respond - just hit delete


Spam are offers of wonderful physiques if we purchase any enhancing medication, or holidays of a lifetime if we complete the competition entry form. In other words, any form of advertising that is unsolicited.


Scams, on the other hand, are intended to defraud the recipient of cash and are often very dangerous. The most well known scam is Advance Fee Fraud or, as it has become known internationally, the “419” scam – the number being the section of the Nigerian criminal code having to do with financial fraud schemes. (Read more...)


Fidentia bosses face extra fraud, theft charges


Fidentia bosses J Arthur Brown and Graham Maddock will face two additional charges, over and above those involved in the main investigation into the company, following their court appearance yesterday. (Read more...)


State slashes theft and corruption losses


THE government’s fight against financial misconduct has sharply reduced losses of money by national and provincial departments through corruption, fraud and theft.

A report released by the Public Service Commission yesterday will go a long way in backing the government’s assertion that it is taking corruption seriously. (Read more...)




Charges a ploy to get rid of me - councillor


A Stellenbosch councillor facing allegations of corruption and fraud says his detractors are trying to oust him ahead of the September floor-crossing period.

Last month ANC councillor Gordon Pheiffer obtained a court interdict preventing the Stellenbosch municipal council from discussing the allegations against him until he was able to respond to them. (Read more...)


Grant fraud: arrests made


Fifty-six people were arrested in the Northern Cape in connection with social-grant fraud, police said on Tuesday.

Captain Cherelle Ehlers said those arrested had applied for child grants, but their situation had changed since applying.

"All 56 of the accused failed to report their employment to the department and were receiving a monthly grant that they were not entitled to." (Read more...)


Witness says she took part in fake marriages for the money


A WITNESS told the Port Elizabeth magistrate‘s court yesterday that when she became involved in a fake marriage scam, rumours had been flying around about it.


Lindelwa Hoyi, who was testifying in a fraud case against the Rev Mthetheleli Soga and Mohammed Bhat, said everyone in KwaZakhele, where she lives, had been aware of the scam.


Bhat and Soga are facing 48 counts of fraud for helping illegal immigrants obtain South African citizenship by solemnising marriages and issuing fake certificates. (Read more...)


BAe and the arms deal


In November 1998 the South African cabinet named British Aerospace (BAe) as its preferred supplier to re-equip the South African Air Force (SAAF), as part of its strategic defence package programme. Cabinet formally went ahead with the purchase in September 1999.


From almost the moment when the British government and armaments industry tabled their proposals to re-equip the South African defence force, in early 1997, there have been suspicions about the way in which they were went about trying to secure that contract. It is now a matter of public record that BAe planned to pay £180m in “secret commissions” after having won the deal. (It now claims to have reduced this to £112m.)

The possible use of bribery by BAe to secure the contract is currently being investigated by the Serious Fraud Office (SFO) in London. Earlier this year, the Mail & Guardian reported that in June 2006 the SFO had issued a request for legal assistance to the South African authorities. (Read more...)


 'Something about suspect won my heart'


Something about an alleged Nigerian fraudster captured Portia Kgantsi's heart, so she saw nothing strange about befriending him - even though she was a prosecutor.

It was that friendship, however, that later led to her arrest.

Kgantsi, an advocate with the National Prosecuting Authority, is accused of trying to extort money from her "friend" in exchange for her withdrawing fraud charges against him. (Read more...)




Modise didn't lay theft charge


Zehir Omar, the lawyer of businessman Charles Modise, says he did not lay a charge of theft or fraud about money donated to the SA Communist Party (SACP), but merely laid a complaint about accountability.


The police, however, insist they are investigating a charge of theft based on a complaint Modise made. (Read more...)


Ntshona in trouble about record


Port Elizabeth - The controversial medical superintendent and deputy manager of the East London Hospital complex, Dr Nokuzola Ntshona, is in trouble.


An investigation has been launched after Ntshona admitted in an interview that she'd been found guilty in the US of conspiring to commit fraud to the tune of R3m.


Vuyo Mosana, chief executive of the hospital complex on Sunday described her past as "absolutely shocking". (Read more...)


SABC welcomes ruling on Sihlali application


The SABC has welcomed the Johannesburg High Court ruling ordering its legal services head, Mafika Sihlali, to pay legal costs of his application to stop the corporation's board from meeting to discuss his future. The case has been postponed and Sihlali could not argue his case because he is on sick leave. (Read more...)




Fidentia staff testify to curators


THREE senior former Fidentia employees are among those who have testified so far at a closed inquiry in Cape Town being conducted by the company’s curators in a bid to trace nearly R1bn in missing funds.


Key players in the scandal could face jail or be held personally accountable for money lost by investors.

Curators would not reveal whether they would be able to trace all the missing funds. (Read more...)




Schools programme on fast-track to recovery


THE Eastern Cape education department will fast-track a recovery programme to put the derailed R729-million school building programme for the current financial year back on track.


A specialist financial and accounting team is also being tasked to probe the issues around massive fraud and corruption surrounding the province‘s schools nutritional programme which runs to around R360-million annually. (Read more...)




Fraud case postponed


An SANDF clerk accused of defrauding the SANDF of R1,1m made a brief appearance in the Specialised Commercial Crimes Court in Pretoria on Tuesday, the SABC reported.

The case against Zelda Wolmarans and her co-accused, Shauna Heydenrych, was postponed to November 5 for plea and trial. (Read more...)




Suspended Teta boss arrested


The suspended chief executive of the Transport Education Training Authority (Teta), Piet Bothma, has become the third person to be arrested in connection with the Fidentia affair.

He appeared briefly in the Cape Town Magistrate's Court on Monday where he was released on R200 000 bail. (Read more...)


Ex-radio presenters' case postponed


The fraud and corruption case against former Lesedi FM presenters Thuso and Mmamontha Motaung was postponed in the Johannesburg Commercial Crimes Court to October 1, the SABC reported on Monday.

A trial date will be set then. (Read more...)




Four Correctional Services officials dismissed


The four Correctional Services officials who were allegedly identified in a SABC Special Assignment expose on corruption within the department have been summarily dismissed for serious misconduct.

Special Assignment journalists conducted an investigation and apparently captured the four officials on video accepting bribes. (Read more...)


R7,4m fraud accused lashes out at Bacher


Former cricket supremo Ali Bacher has been accused of being a law unto himself.

This view was expressed by Kelly Lekoto, the lawyer for former United Cricket Board employee Diteko Modise, who is accused of defrauding the organisation of R7,4-million.

Lekoto was giving his closing argument at the specialised commercial crimes court in Johannesburg on Wednesday. (Read more...)




SABC report: What you couldn't read


Two weeks ago, the Mail & Guardian newspaper was interdicted in the early hours of Friday July 20 by the head of the South African Broadcasting Corporation's (SABC) legal services, Mafika Sihlali, from publishing a story on an explosive draft internal SABC audit report.

The report, which is in the possession of the M&G, alleges corruption, abuse of power and intimidation at the SABC. (Read more...)


Public servants under investigation


More than 30 000 public servants are being investigated for alleged housing subsidy fraud, according to Willie Hofmeyr's Special Investigating Unit. (Read more...)


Ex-prosecutor jailed for fraud


A former senior prosecutor at the Pietermaritzburg Magistrate’s Court faces a jail term of 18 months after his appeal against a fraud conviction was dismissed.In the Pietermaritzburg High Court on Wednesday, judges Noel Hurt and Kevin Swain dismissed Stanley Ngubane’s appeal. (Read more...)


Former Mangaung mayor in court


Former Mangaung mayor Pappie Mokoena, his wife, and other senior municipal officials face 259 charges of alleged racketeering, fraud, corruption and money laundering, contained in an indictment on Wednesday.

Scorpions acting-head in the Free State, Johan Roothman, handed the charges in during a short court appearance in the Bloemfontein High Court. (Read more...)