Nine to appear in PE court for R56m fraud, corruption & money laundering
Nine people, including former municipal officials in Nelson Mandela Bay, have been arrested for fraud, corruption and money laundering amounting to more than R56m.
The suspects , aged between 30 and 60, were arrested by the Hawks. They are due to appear at the Port Elizabeth magistrate's court on Friday.
“They include two former Nelson Mandela metropolitan municipal officials, two influential community office bearers and five business people. The nine natural persons will be charged along with six juristic persons [entities]. The tenth person who was to be arrested passed away recently,” said Hawks spokesperson Lt-Col Philani Nkwalase.
“The metropolitan municipality was among those selected for a rapid bus system in 2010 and the integrated public transport system project was administered with funding allocated by the National Treasury. In the same year, another project called 'implementation and maintenance of an institutional contracts management and administration system' was undertaken.”
According to Nkwalase, the service providers chosen for these two projects were reportedly irregular and their prices were allegedly inflated.
The matter was reported to the Hawks for investigations in September 2018 following an audit report by the Treasury between October 2014 and March 2017, he said.
“It is alleged the suspects operated a syndicate with the common purpose to unlawfully circumvent the prescribed procurement processes to irregularly and fraudulently benefit specific suppliers or consultants,” Nkwalase said.
“It is further alleged influential office bearers colluded with municipal officials and controlled decision-making in the appointments of specific persons in critical municipal posts. This was purportedly done to influence procurement processes as well as the appointments of entities willing to advance the interests of the syndicate.”
The alleged objective, he said, was to ensure a steady stream of unlawful payments from the municipality to members of the syndicate, where the funds were distributed to other syndicate members.
“This now forms the second leg of our investigation. In the first leg conducted in April 2017, we arrested six suspects who included two company directors, one entity, one municipal official and one person from the Eastern Province Rugby Union.”