Municipalities Legal Cases Overview
The content discusses various legal cases relating to municipalities, focusing on referrals and investigations by the Special Investigating Unit (SIU) and the National Prosecuting Authority (NPA). It includes breakdowns of SIU referrals, highlights of specific cases in Tshwane and Ekurhuleni Metropolitan areas, and a look at the overall numbers of cases before and finalized in court. The cases involve allegations of fraud, corruption, and non-compliance with procurement policies, resulting in significant financial losses for the municipalities.
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LEGAL FRAMEWORK RE SIU REFERRALS SIU Act In terms of section 4(1)(d) of the SIU Act, the SIU must, during an investigation of any matter in terms of the SIU Act, wherein the evidence collected points to the possible commission of an offence; refer the matter to the NPA as soon as is practicable SIU and NPA MoU MoU to refine the referral process from the SIU to the NPA for investigation and prosecution, is currently in draft, decision taken to include DPCI in the MoU The NPA refers these matters to the SAPS to register a case and to obtain further court directed, admissible evidence required to make a decision
COGTA RELATED CASES WITHIN THE NPA The cases emanate from: SIU Proclamations involving Municipalities Other work involving Municipalities (DPCI; General Detectives investigations)
BREAKDOWN OF COGTA SIU REFERRALS 64 Number of cases 25 Number of cases under investigation 21 Number of cases before court 18 Number of cases finalised in court
TOTAL SIU REFERRALS AS AT OCTOBER 2019 9 Number of cases before court 11 Number of cases finalised in court
HIGHLIGHTS RE SIU REFERRALS TSHWANE METROPOLITAN MATTER (S Vs JACOBUS BAREND LERM) Facts of the case The accused, a former employee of Tshwane Municipality, flouted SCM regulations, causing the City a loss of more than R50m. A 2010 report by the City s SCOPA found that Lerm flouted the supply chain management policy by creating orders and procuring quotes for services directly from suppliers, instead of going through the procurement system. He then split up orders into smaller amounts to stay under the radar of the R300 000 cap Outcome Accused pleaded guilty i.t.o S105A. Convicted and sentenced to 15yrs imprisonment, 5yrs of which was suspended for 5yrs (an effective term of 10 years imprisonment). AFU was involved in the matter, but found no assets available for attachment
HIGHLIGHTS RE SIU REFERRALS EKURHULENI METROPOLITAN MATTER (S v VELERO DAVID AND 4 OTHERS) Facts of the case The matter relates to allegations of fraud and corruption involving an amount of R21,9 million. A tender for an IT contract was awarded to an entity which did not comply with the bid requirements, and as such, the bid should have been rejected. The bid adjudication committee was found to have misled the tender committee on certain critical issues Outcome All five (5 ) accused were found guilty as follows:- Accused 1 (sole member of the entity awarded the tender) guilty on fraud and corruption Accused 2 (Executive Director: IT, Ekurhuleni Metro) guilty on fraud and corruption Accused 3 (Senior Manager IT, Ekurhuleni Metro), 4 (entity awarded the tender) and 5 (entity which received funds from accused 4) guilty in terms of sec 6(c) of Act 121, POCA. The matter has been postponed for sentencing proceedings AFU has R21m Restraint
SOME OF THE SIU CASES FINALISED IN COURT The State Versus Patricia Nokwazi Chuleand Hlengiwe Precious Hlela The matter related to the commission of the offences of fraud and money laundering involving an amount of R7 500 000.00. (seven million and five hundred thousand rand) fraud and money laundering. Their co-accused had pleaded guilty to money laundering, and was sentenced to 12 years direct imprisonment. Both accused were employees of the COGTA, and one accused was in a romantic relationship with the co-accused who pleaded guilty.
SOME OF THE SIU CASES FINALISED IN COURT The offence occurred when Chule transferred R7 500 000 meant to be paid from COGTA to the Ingwe Municipality, for the construction of a cr che/community centre, into Dhladhla s bank account. The accused were each sentenced to 15 years direct imprisonment for fraud and 10 years direct imprisonment for money laundering. The court ordered that the sentences should run concurrently, and the accused will thus serve effective terms of 15 years direct imprisonment.
SOME OF THE SIU CASES FINALISED IN COURT State v T Gqola The matter relates to a Councillor taking money from members of the public on the pretence of awarding RDP houses. The amount involved was R7 000. He was convicted and sentenced for fraud and corruption Sentenced to an effective term of 6 years imprisonment. He was denied leave to appeal the sentence imposed.
SOME OF THE SIU CASES FINALISED IN COURT State v Fritz Malcolm The matter involves a City Ombud Official who accepted a R1 200.00 bribe to arrange the purchase of a house. He was convicted and sentenced for corruption Sentenced to a direct term of 4 years imprisonment.
SOME OF THE SIU CASES FINALISED IN COURT State v Peterson The matter involves a municipal manager of the Oudtshoorn Municipality Convicted of a contravention of the MFMA and sentenced to a direct term of 5 years imprisonment, which was confirmed on appeal.
SOME OF THE SIU CASES FINALISED IN COURT State v Bongo Nombiba The accused was an ANC councillor in the employ of the Nelson Mandela Metropolitan Municipality. He inflated a request for funding submitted by an NGO, and insisted that the NGO withdraw the money received and hand the cash to him. The accused was charged and convicted of fraud (1 count) and money laundering (1 count Section 4 of POCA), and was sentenced to an effective term of 5 years direct imprisonment. The court made an order in terms of sec 18 for an amount of R20 000, payable to the Nelson Mandela Bay Metro.
SOME OF THE SIU CASES FINALISED IN COURT State v Kolantso and Another Accused 1 was a financial officer in the employ of a Municipality His duties entailed, amongst others, assisting families of the deceased to lodge claims for provident fund benefits. He colluded with Accused 2, whereby he amended a beneficiary form of one of the beneficiaries, and outlined details of Accused 2 thereon as the wife of the deceased employee. As a result, an amount of R325 000 was authorized and paid to accused 2 by the provident fund, which the accused shared.
SOME OF THE SIU CASES FINALISED IN COURT They both pleaded not guilty but were convicted of the commission of the offences of forgery and uttering, fraud and money laundering. They were each sentenced to 4 years imprisonment (in respect of the forgery charge), 4 years imprisonment (in respect of the charge of Uttering), 8 years imprisonment (in respect of the fraud charge), and 3 years imprisonment (in respect of the money laundering charge). Accused 1 was sentenced to an effective 13 years direct imprisonment and accused 2 was sentenced to an effective 10 years direct imprisonment. AFU obtained a forfeiture in respect of the proceeds, and R84 818 was paid to the victim.
SOME OF THE SIU CASES FINALISED IN COURT 6. The State versus Ntombizanele Patricia Williams The accused was a ward councillor at the Maletswai Municipality, who unlawfully sold plots earmarked for a housing development to members of the public. She was arrested after she was caught in a police trap. She pleaded guilty to three counts of fraud. In two of the counts, there was actual prejudice of R2000.00 and R6000.00 respectively, and in the third count only potential prejudice of R 10 000.00. The court took the counts together for purposes of sentence, and sentenced her to 8 years imprisonment of which two were conditionally suspended for five years. The accused will therefore serve an effective term of 6 years direct imprisonment.
HIGHLIGHTS RE OTHER WORK INVOLVING MUNICIPALITIES NALEDI MUNICIPALITY MATTER (S V ERIC PHUKWANA & ANOTHER) Facts of the case The matter relates to allegations of corruption, money laundering, fraud and contravention of amounts of & R216 million R 87 million . It involves 2 legs of investigations, the first being in court, and the second underway. The leg in court involves a former Municipal Manager alleged to have irregularly procured services (amounting to R216 million) for the municipality without following proper procurement procedures. Outcome First leg postponed for sentencing proceedings MFMA, involving
HIGHLIGHTS RE OTHER WORK INVOLVING MUNICIPALITIES NALEDI MUNICIPALITY MATTER (S V ERIC PHUKWANA & ANOTHER) Facts of the case The second leg involves a service provider who submitted claims for services rendered, whilst such services were not completed. Engineers revealed that road, earthworks, storm water, and streetlights were not constructed although a completion certificate was submitted and payments amounting to R87 million were effected. Outcome
HIGHLIGHTS RE OTHER WORK INVOLVING MUNICIPALITIES UMKHANYAKUDE MUNICIPALITY MATTER(S V LD NGOMANE & OTHERS) Facts of the case The matter relates to allegations of fraud involving an amount of R6,3 million. It is alleged that the PA for the CFO of UMkhanyakude Municipality assisted a fraud syndicate by placing a key logger on the computer of the CFO in order to obtain the password. The accused, after obtaining the password, did EFT payments into bank accounts of four different suppliers, who never performed any work for the Municipality. The 4 beneficiaries transferred the funds received to (79) secondary beneficiaries, shortly after funds cleared. Cash withdrawals were made at various casino establishments in Gauteng and Cape Town Outcome The matter is currently before court and has been remanded for further trial.
HIGHLIGHTS RE OTHER WORK INVOLVING MUNICIPALITIES TSHWANE MUNICIPALITY MATTER Facts of the case The matter relates to allegations of the commission of the offences of Fraud and Corruption involving an amount of R87 million. It is alleged that the Head of Tshwane Metro Police awarded contracts for the installation of CCTV cameras and acquisition of other security equipment s to companies to which he and/or his wife has interest. Outcome The matter is currently before court and has been remanded for further trial.
THE VBS INVESTIGATION Under investigation by the DPCI
ASSETFORFEITUREUNITINVOLVEMENT Asset forfeiture potential is considered in each matter Asset forfeiture is dependent on cases being investigated The final forfeiture orders are mostly dependent on criminal matters being finalised, which are slow to realise.
ASSETFORFEITUREFIGURES AFU currently has 42 municipal cases to the estimated value of R419m at various asset forfeiture stages. The AFU has restraints and preservations currently in place in 6 cases to the value of R68,9 million. The AFU has obtained the following orders since 2014: 35 restraints and preservations to the value of R255 million. 26 forfeitures to the value of R24,7 million 20 recoveries to the value of R15 million
ASSETFORFEITURENOTABLECASES 1. Robert Abbu and Others This case involves a number of suspects including the former mayor of the Ethekwini Municipality. Due to collusion between municipal employees and private persons tenders were awarded unlawfully. R51m is currently under restraint. 2. IPTS The Nelson Mandela Bay Municipality awarded contracts for the development of an Integrated Public Transport System. Some of the contractors committed invoicing fraud against the municipality. R2,1m is currently preserved. R4,3 million has been recovered.
ASSETFORFEITURENOTABLECASES 3. Qongqo The accused was a municipal worker who stole money from the OR Tambo District Municipality and transferred the monies into her sisters account. R4,85 million has been forfeited and R425 000 has been recovered to date. 4. S Mewalall and Others The accused was the CFO at the Richmond Municipality. He awarded contracts to companies and received kickbacks. R1,4m is currently preserved and the AFU is drafting the forfeiture application.
ASSETFORFEITURENOTABLECASES 5. Keble and Others The accused and others benefitted in the amount of R1,6m as a result of fraud and corruption committed at the Nelson Mandela Bay Municipality. R2,2m is currently under restraint pending the outcome of the prosecution.
ASSETFORFEITURENOTABLECASES 6. Siyenza 2 Matter Municipal employees colluded with a company to award a tender fraudulently and corruptly to erect toilets to the value of R406m in the Amatole District Municipality. The AFU obtained a restraint for R81m.
ASSETFORFEITURENOTABLECASES 7. Freddy Tshivengwa Matter The accused was the head of the BAC at the Vembe District Municipality. He recommended that the MM award three tenders to a company whilst having a relationship with the Director of the company. His house was renovated and he received vehicles which were registered in his Family Trust. The AFU obtained a restraint for R11,3 million.
STEPSTOPRIORITISEAND FASTTRACKMATTERS The NPA hosted an Anti-corruption workshop to improve coordination in the NPA; ACTT efficiency being addressed; Cases decentralized throughout DPP Offices, and high level cases prioritized. Progress on cases closely monitored regionally; MOU with the SIU being reviewed, and to as well include the DPCI (tripartite MoU); Relationship with the SIU and SAPS maintained; High impact cases dealt with by the ID. NOTE: The SAPS remains responsible for the investigation of cases
