City of Joburg employee busted for R28m revenue scam

A City of Johannesburg employee has been arrested in connection with a R28-million revenue refunds scam.

The employee‚ who worked as an operational manager at the revenue department‚ was arrested on Wednesday by the Hawks.

It is alleged that the employee had defrauded the City of about R900 000‚ which was paid in two transactions to a certain company and then to his.

“It is alleged that the employee approached a certain company and transferred the refund into the company’s bank account‚ which was then paid into his company’s bank account. The figure is expected to rise as investigations are ongoing‚” Johannesburg mayor Herman Mashaba said. He said three people handed themselves over to the Hawks on Wednesday in connection with the same case.

One of the three‚ according to Mashaba‚ is an illegal immigrant‚ who used two different fraudulent identity documents and allegedly colluded with City officials to pocket R4.8-million in the refunds scam.

The suspects will appear in the Johannesburg Commercial Crimes Court on Thursday on charges of theft‚ fraud and corruption. “The four arrested suspects will join the 14 suspects who were arrested in August in connection with fraudulent refunds that were processed by City officials working at the Refunds Unit‚ Revenue Department.” According to the City of Johannesburg‚ 18 suspects have been arrested so far. Of those‚ 13 are City officials.

The investigation by the Hawks has revealed that the suspects in the case allegedly defrauded the City of R28-million by claiming fraudulent refunds purported to be on behalf of property owners‚ Mashaba said.

In some instances the property owners colluded with the officials to inflate refunds due to them.

“In October last year‚ the City’s treasury department was contacted by Nedbank and warned of possible irregular payments which 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 11.24‚” said Mashaba.

“Once the refund was processed it would then be paid into the individual’s bank account and the monies would be shared. “We will also ensure that the property owners and members of the public‚ commonly known as runners‚ who collude with the officials‚ are also held to account and face the full might of the law.” He encouraged members of the public to report fraud and corruption to the City’s 24-hour hotline on 0800 002 587 or visit the GFIS offices at 48 Ameshoff Street in Braamfontein.