Convicted City of Tshwane fraudster Japie Lerm used the son of his then-domestic worker and the wife of a senior police official as the faces of an elaborate BEE scheme that helped him steal at least R77m from the city’s coffers over several years.
In an affidavit deposed as part of the Special Investigating Unit’s investigations, William Botabota, who was living in an outside room at Lerm’s luxury Pretoria home, shared how he initially trusted Japie and his then-wife Suzette with his life but later grew increasingly suspicious.
“During 2003/4 Suzette gave me a lot of documents to sign. I don’t know what I signed, but Suzette said I would make money. Towards the end of 2003, Suzette requested that I open a bank account for myself at Absa Bank, which I did. She deposited R1,000 into my account every month,” he said in the affidavit, seen by TimesLIVE Investigations.
“I queried Suzette as I was sitting at home doing nothing, as I needed interaction with someone. I never went to the office or attended any meetings. For about one year I received this money from Suzette,” said Botabota.
Botabota was not aware that he was a 51% majority shareholder and director for Central High Trading, one of the companies receiving millions of rand in emergency procurement contracts from the City of Tshwane, where Japie Lerm was a senior manager in the city’s community safety department.
Now working as a policeman at Brooklyn Police Station in Pretoria, Botabota earned a pittance while he was a director of Central High Trading.
“I don’t know how I became a director of this entity. I was under the impression that I was working under Uniqus,” said Botabota, referring to another company owned by Suzette.
At some stage, he did not receive the monthly instalment and he queried the matter with Suzette.
“She paid me R2,000 immediately. I again asked her what I should do, whereby she told me that I was doing nothing and that I was part of the management of the company,” he said.
In 2005, Botabota’s application to join SAPS was successful and as a consequence, he requested to resign from the company. Suzette refused and told him he could still retain his position while in the employ of SAPS and that he was one of them.
He said Suzette gave him Central High Trading branded business cards and told him to introduce himself to people and tell them that they installed CCTVs.
Botabota began his police training in January 2006 and Suzette raised his salary to R3,000.
“In March/April Japie visited me at the college. He asked me to sign documents and that they wanted to buy me a bakkie and needed my signature. I assumed that the bakkie would be bought from CHT, but Japie did not mention any names.
I saw the company grow as they became fancy, frequently driving new cars. They bought a new house in Muckleneuk and told me to live in the backroom, where I lived for a while
— William Botabota
“I signed the documents without perusing them. I never questioned Japie and/or Suzette as they were like parents to me and I fully trusted them. Japie said the van would be mine when I finished with college. He did not say that the bakkie was for CHT.”
Botabota was stationed at Bronkhorstspruit after completing his SAPS training and informed Suzette of his intentions to resign because he was a government employee and could not do any extra work. But she declined his resignation and told him that he was not doing any work but was rather on the receiving end.
“I saw the company grow as they became fancy, frequently driving new cars. They bought a new house in Muckleneuk and told me to live in the back room, where I lived for a while.”
After speaking to his late uncle, James Botabota, about his predicament, Botabota informed Suzette that he wanted out.
“She said they are my parents and they would not do anything to jeopardise me. She again said I was doing nothing but earning, whereby I told her that I was not happy signing all these documents.”
After falling out with the Lerms, Botabota informed his commander about his situation. His commander told him that he was a front to earn the Lerm’s business. Botabota then informed the Lerms that he was resigning.
“Japie refused to accept my resignation and threatened to tell my commander about my involvement and that would cost me my job. I told him that I told my commander about this and the threats stopped. I did not have a service contract so I resigned verbally.”
TimesLIVE Premium reported earlier this week that five years after Lerm was sent to jail on nearly a thousand counts of fraud and corruption, not a cent has been recovered by the National Prosecuting Authority’s (NPA) Asset Forfeiture Unit. This while the municipality’s workers are engaged in crippling strikes over wage increase negotiations and the council attempts to stave off bankruptcy.
The Sunday Times also reported that though Lerm was sentenced to 10 years, he only served two, and none of the other people implicated in thousands of pages of a Special Investigating Unit investigation, including Suzette, have been prosecuted. Suzette was questioned under oath but the NPA declined to prosecute her.
The looting started sometime around 2003 with an elaborate scheme where Lerm, allegedly alongside his wife Suzette — both former SA defence force military intelligence officers — subverted SA’s business laws, which were designed to redress hundreds of years of black exclusion from the formal economy, into a money printing machine to fund their lavish lifestyles.
The scheme involved using equity requirements, which, as white South Africans, they did not meet, to register companies on the municipality’s supplier database.
On the surface, the companies met all the requirements for the government’s Black Economic Empowerment (BEE) programme, but in reality, the directors were puppets.
Botabota told TimesLIVE Premium the Lerms nearly ruined his life.
“The SIU took me in for questioning and almost arrested me. I want nothing to do with them. They almost cost me my life with their dangerous scheme,” he said.
Lerm leveraged every relationship around him and used people as tools in his corruption and fraud machinery.
In addition to CHT, the Lerms also used Green Flash Trading (GFT), Pacific Breeze Trading (PBT) and City Square Trading (CST) as conduits to defraud the City of Tswane.
Lerm was fired by the city in 2010 after it found out he flouted the supply chain management policy by creating orders and procuring quotes for services from a supplier himself, instead of going through the procurement system.
Lerm recruited unknowing participants into the scheme under the pretence of business ventures which included the spouses of colleagues.
Jeannette Benedicta Mokhine, the wife of former Tshwane metro police department (TMPD) deputy chief Pius Mokhine, was recruited to form part of a group of a conglomerate of women-run companies.
In her affidavit, Jeannette said during the first meeting with a group of four women who were introduced to each other, Lerm explained the concept of historically disadvantaged individuals (HDI) and how it would be to their advantage if they worked together to form companies with the purpose of seeking business.
“They said all females earn HDI points and as a black female I would earn extra points for BEE. This was also the reason that only females were to be registered as directors of the entities,” said Mokhine.
“My attorney obtained records of said entities, whereby he informed me that I was registered as a director of the said entities. I, however, cannot recall where and when I must have signed documentation to be registered as such. I signed lots and lots of documentation.”
Mokhine said this was the first time she had engaged in any kind of business and she did not know the legal implications of assuming the role of a director, which Japie did not explain them to her.
Though there were bank documents related to CST containing Mokhine’s signature, she said she did not remember when or if she actually signed them.
To this day I have no idea what kind of work the three companies did or what amounts were earned
— Jeannette Benedicta Mokhine
“During this second meeting, it was discussed that Japie would bring in the work. It was also further agreed that it was the responsibility of all of us to look for business, and that a 5–10% spotter fee would be paid to the one who brings in such business.”
They were informed during later meetings that their entities would be getting business from the City of Tswane, she said.
“It was agreed that directors would be paid compensation once the business showed profit.”
Mokhine received over R212,000 in profit share between 2008 and 2009 for her role as a director in the three entities.
“At one stage I was informed that we were successful with quotations to the Tshwane municipality. I required them to supply me with the amounts of work received, which was never disclosed to me. To this day I have no idea what kind of work the three companies did or what amounts were earned.”
Mokhine’s lawyer, Dawie de Beer, said the couple refused to comment on the matter as it was concluded.
“This matter was thoroughly investigated by the Special Investigating Unit and the Hawks. Our clients co-operated with the SIU and were warned not to provide any information to third parties, failure of which will result in them being prosecuted,” said De Beer.
Suzette Lerm refused to comment, with TimesLIVE Premium unable to get comment from her ex-husband, who was tracked down to Cape Town where he lives with their daughter.
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