Joburg city official in R10m scam
AN official at the City of Joburg has been suspended after the discovery of a R10-million building applications scam.
And it is expected that more officials will be arrested as investigations continue.
Executive mayor Parks Tau, flanked by member of mayoral committee (MMC) for public safety councillor Matshidiso Mfikoe, MMC for development planning and urban management Ruby Mathang and city manager Trevor Fowler, yesterday revealed that the official had been implicated in the scam, which was only uncovered last week.
It is believed that a complaint by an irate customer was taken up by a senior official, at the department, who later discovered that the department had been scammed of millions.
But city bosses were still in the dark about the extent of the fraud.
Neither Tau nor Mathang, Mfikoe and Fowler could say how long the scam had been in effect.
But they have asked that investigations look into all applications made over the last 12 months.
Tau has also asked investigators to establish whether the scam might have delayed the resolution of the city's ongoing billing crisis.
Fowler said the city's forensic unit had been tasked to uncover more evidence of fraudulent activity and that the department's processing systems had been "changed".
Described as "sophisticated", the alleged scam involved officials accepting building applications and later issuing fake receipts to customers.
Though Tau would not divulge further details of the fraudulent activity, he revealed that the modus operandi was rather simple.
"Generally speaking certain parties took application fees from city customers and generated fraudulent receipts. They shared the spoils of the cash collected from customers.
City records then reflected the applications as valid registered customers on the basis of proof of payment."
And while the situation looks bleak at present, with only 120 possibly fraudulent applications worth R10-million uncovered, millions more of the city's money might have ended up in the wrong hands.
Sowetan understands that the development planning and urban management department receives at least 2,000 applications every month, which generate a monthly revenue of R3-million.
Mathang said some customers were not entirely innocent.
"This would not have been possible if outsiders were not involved. There must have been outsiders colluding with officials," he said.
Meanwhile, a public prosecutor has been arrested after trying to withdraw fines worth R40,000.
Mfikoe said the matter was still being processed. - email@example.com