Seven in the dock over R1.1m UIF fraud as Hawks probe Gqeberha claims mill

Two more suspects have appeared in the Specialised Commercial Crimes Court in Gqeberha, bringing to seven the number of people named in a Hawks investigation into an alleged R1.1-million Unemployment Insurance Fund fraud scheme in the Eastern Cape.

Siphokazi Sithole, 42, and Singapore Mtimka, 33, were arrested on 26 October and face fraud charges. As Sunday World reported on 27 October, their appearance follows the earlier arrests of Nandipha Tutani, Nobuntu Constance Mjili, also known as Bester, Xolile Fibi, Unathi Tambo and Amanda Peziza.

The Hawks say the Department of Employment and Labour suffered a loss of R1 197 905.40 in the alleged scheme.

At the centre of the investigation is the claim that false employment records were used to make it look as though applicants had worked for Tower City, and had the employment histories and monthly salaries needed to qualify for UIF payments.

Hawks Eastern Cape spokesperson Warrant Officer Ndiphiwe Mhlakuvana said investigators were focused on the alleged manipulation of the administrative processes used to submit, verify and process claims.

“The alleged scheme involved the use of false employment information to create the impression that applicants had previously worked for Tower City and qualified for UIF payments based on purported employment histories and monthly salaries,” he said.

Tutani and Mjili are alleged to have played key roles in recruiting applicants into the scheme, with other alleged participants enlisted to bring in more claimants. Both were granted R2 000 bail in earlier proceedings. Fibi, Tambo and Peziza were released on warning.

Tutani, who worked in the Employer Services section of the then Department of Labour in Gqeberha, is alleged to have used her position to help push the claims through. Her duties included capturing, verifying and filing Employer Declaration of Employees forms. Mhlakuvana said she allegedly acted in common purpose with the other accused to help people who did not qualify for UIF benefits obtain payments.

Applicants were allegedly given claim forms and helped to complete the paperwork needed to start the process. In some cases they were reportedly helped to open the bank accounts into which the benefits would be paid.

The Hawks allege the scheme went further than false paperwork. “After the benefits were paid into the designated bank accounts, some of the accused accompanied claimants to financial institutions and arranged to receive portions of the money,” Mhlakuvana said.

The UIF is the fund that pays out to workers who lose their jobs, and it is financed by contributions from employers and employees. Money drawn from it on claims that are not backed by real employment is money taken from the pool that pays retrenched and dismissed workers while they look for work.

The case is one of several the Hawks and the Department of Employment and Labour have taken to court over alleged UIF fraud. Sunday World’s report also points to a North West case in which a syndicate appeared in the dock over fraudulent claims, and to an Mpumalanga matter in which R26-million was frozen after a firm was accused of claiming UIF payouts for about 700 people who did not exist on its payroll.

The seven accused in the Gqeberha matter have not pleaded, and the allegations against them have not been tested in court.