NEWS & ANALYSIS

Joburg revenue dept officials arrested for fraud - Herman Mashaba

Mayor says eight employees arrested by Hawks, 17 warrants issued

Eight City officials arrested for fraud and corruption

25 August 2017

Eight City of Johannesburg employees working at the Revenue Department in Thuso House were arrested this morning by members of the Hawks, and will be charged for fraud, theft and corruption.

The arrested officials will appear at the Johannesburg Commercial Crimes Court on Monday.

I have been informed that 17 warrants of arrest were issued by the Hawks.  Five employees were on leave today, one person resigned last year, three are members of the public, commonly known as runners.  The outstanding nine suspects are expected to be arrested soon.

It is alleged that they defrauded the City of about R2.5 million for claiming fraudulent refunds on behalf of property owners. In some instances, individual property owners colluded with the officials to inflate refunds due to them. Once the refunds were processed, they would then be paid into individual bank accounts, leaving them to share the money amongst themselves.  The figure is expected to rise as the investigation progresses.

We will also ensure that the property owners who colluded with the officials are held to account and face the full might of the law. Residents who collude with officials and steal from the City must face the consequences.

In October last year, Nedbank contacted the City’s Treasury Department, informing them that possible irregular payments were made into a certain client’s bank account.  Nedbank identified three payments which appeared to be irregular.  The first payment was for R291 581.90, the second payment was for an amount of R281 581.80 and the third one was for R86 144.24.

Other fraudulent refunds were also identified by senior officials working at the Refunds Unit at the Revenue Department.

The City’s Group Forensic and Investigation Services (GFIS) department was then alerted to the matter and launched an investigation. A criminal case was also opened for further investigation.

I am further disappointed to learn that one of the arrested officials was convicted in November last year and given a fine, after soliciting a R2 800 bribe from a member of the public.

We have zero tolerance for corruption, this is why we will continue to relentlessly pursue every allegation of corruption.

I have been informed that a number of employees have elected to illegally protest outside Thuso House in support of their arrested colleagues. I see this as deplorable, and tantamount to supporting corruption, and I will ensure that disciplinary action is taken against these employees. City employees who support corruption and the theft of resident’s resources have no place in this administration.

We will work tirelessly, and in collaboration with institutions such as the Hawks, SAPS and all other institutions within the criminal justice system to ensure that the residents of Johannesburg receive the quality services they deserve.

I would also like to encourage people to report any fraud and corruption activities through our 24hour tipoff hotline 0800 002 587 or visit the GFIS offices situated at 48 Ameshoff Street in Braamfontein.

Statement issued by Cllr Herman Mashaba, Executive Mayor, City of Johannesburg, 25 August 2017