UIF welcomes wave of arrests over R2.2m Ters fraud

The Unemployment Insurance Fund (UIF) has welcomed the arrests of 16 suspects who are accused of swindling the Covid-19 Temporary Employer-Employee Relief Scheme (Ters) out of R2.2 million.

This comes after the Hawks revealed on Monday that the suspects, aged between 23 and 57, were arrested in Gauteng and the North West during an operation on Sunday morning (27 November).

In the statement, the Hawks disclosed: “During the height of the Covid-19 pandemic in 2020, three sole directors of different dormant entities applied for Covid-19 Ters funds from the UIF on behalf of respectively 47 133, and 141 people, who were seemingly not employed by them.”

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“The department paid the funds to companies’ bank accounts. The funds were allegedly transferred to certain individuals for personal enrichment.”

The Hawks said, as a result, that the department suffered a total loss of over R1.4 million due to siphoning activities.

Warrant officer Bonnie Nxumalo told Moneyweb that while the accused appeared in the Mahikeng District Court on Monday, only two – Kegomoditswe Moselane (34) and Altvese Modiboa (43) – were granted bail, at R5 000 each. The matter was postponed to 23 January 2023.

Nxumalo said the remaining 14 will return to court today (29 November) for the continuation of their bail applications.

UIF Commissioner Teboho Maruping has commended the Hawks and the Department of Labour’s Risk, Anti-Fraud and Integrity Management unit for the arrests saying he hopes the action will send a “strong and clear message to would-be and other fraudsters that the long arm of the law will catch up [with] them”.

“Those who have helped themselves to the funds earmarked for workers during the lockdowns must not have any peace. They must know that the net is closing in on them,” he adds.

The fund says it is already conducting phase 2 of its “follow the money” project, which started in July and entails the auditing of companies to verify the validity of claims and whether the correct amount was paid over to workers on time. It anticipates more arrests will emanate from the project.

“We have appointed several forensic audit firms with over 360 auditors that are currently visiting companies that have benefitted from Covid-19 Ters funds and are suspected of fraud. Until all fraudulent funds are fully recovered and the suspects held accountable, we will not rest.”

The UIF says to date, 10 people have been convicted and sentenced to direct imprisonment or suspended sentences for defrauding the scheme, while 46 suspects have been arrested.

“In this regard, the UIF will continue to work with the Department of Employment and Labour’s Risk, Anti-Fraud and Integrity Management unit and law enforcement partners,” says Maruping.

Nondumiso Lehutso is a Moneyweb intern.