Provincial letterheads used to steal payments

COMPANIES in the Eastern Cape are using the letterheads of provincial departments to illegally intercept payments for service delivery in a scam to defraud the state.

So far a loss of R8.5-million has been recorded, while the Hawks have managed to prevent a potential loss of R146-million by stopping transactions before they could go through. This is according to the anti-corruption and security management directorate of the Eastern Cape.

The directorate appeared before the portfolio committee of the office of the premier last week, where it told the committee that accounting officers at local and provincial government level had been warned to be extra careful.

The directorate further revealed that the special investigation unit (SIU) had uncovered a syndicate operating differently, though also to defraud the government by intercepting payments.

According to the directorate, the SIU had noted that this syndicate was particularly targeting the provincial department of education.

In one of the scams, the suspected syndicate even attempted to intercept a payment to the SIU by changing the SIU banking details in the department’s database to divert about R7-million.

“The SIU team detected the matter, reported it to their head, opened a criminal case and stopped the R7million fraud payment,” reads the report that was tabled by the dir chairwoman Nobulali Gawe to the committee. There was no case number on the report, and the report did not name the companies involved in the scams.

But the Daily Dispatch reported last year on Sijuta Promotions boss Andile Sidinile, who allegedly forged a letter on the letterhead of the department of sport, recreation, arts and culture (Dsrac) to get Boxing SA to approve a scheduled boxing tournament organised by his company.

The letter, seen by the Dispatch, was sent to BSA on a Dsrac letterhead and purportedly signed by its CFO, Jason O’Hara.

It gave an undertaking to BSA that Sidinile had secured R1-million in funding from the department to pay the boxers’ purses.

It was on the basis of the letter – delivered on the day of the tournament – that BSA gave Sidinile the go-ahead to host the tournament.

However, it later emerged that the letter was fake as O’Hara was not at work at the time and the signature was not his.

The Hawks confirmed they opened a probe into the matter.

According to Gawe, such diversion of payments scams were also on the rise in the Amahlathi local municipality and in KwaZulu-Natal. — had