PORT ELIZABETH - 9 SUSPECTS, INCLUDING 2 NELSON MANDELA BAY MUNICIPAL OFFICIALS ARRESTED FOR FRAUD AMOUNTING TO R200 MILLION

The Hawks Serious Corruption Offences team arrested nine suspects aged between 30 and 65-years-old on multiple charges of fraud, corruption and money laundering exceeding R56.4 million actual loss, whilst the potential loss is around R200 million.

The suspects were warned to hand themselves over to the Hawks this morning and are expected to appear in the Port Elizabeth Magistrate’s Court today.

The arrested officials include two former Nelson Mandela Metropolitan Municipal officials, two influential community office bearers as well as five business people. They will be charged along with six juristic persons (entities).  The tenth person who was to be arrested passed away recently.

The Metropolitan Municipality was among those selected for a rapid bus system in 2010 and the Integrated Public Transport System “IPTS” 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 (ICMAS) was undertaken.

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 National Treasury between October 2014 and March 2017.

It is alleged that the suspects operated a syndicate with common purpose to unlawfully circumvent the prescribed procurement processes to irregularly and fraudulently benefit specific suppliers or consultants.

It is further alleged that 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 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, on the first leg conducted in April 2017, we arrested six suspects that included two company directors, one entity, one municipal official and one person from Eastern Cape Province Rugby Union.

via - SAPS