Asset Forfeiture Unit strikes after R5m Covid-19 relief money paid into wrong account

20 June 2020 by Nicole McCain

Accounts linked to the alleged money laundering of Covid-19 unemployment funds have been frozen by the Assets Forfeiture Unit.

On Friday, the Gauteng High Court in Pretoria granted the AFU a preservation order for more than R3.2 million in relation to funds paid fraudulently or mistakenly into the bank account of Tshepang Phohole, said National Prosecuting Authority spokesperson Sipho Ngwema.

Phohole is an employee of a client of CSG Resourcing.

CSG Resourcing, a labour broking company, applied for Covid-19 relief of more than R5.6 million from the Unemployment Fund (UIF) of the Department of Labour for its clients. The UIF Covid-19 relief funds were to be paid over to more than 200 employees, of different companies, by CSG Resourcing and was approved by the UIF.

However, instead of being paid into a bank account nominated by CSG Resourcing, the money was paid into Phohole’s account. This was discovered after CSG Resourcing queried why the relief funding did not reflect on their account, despite being approved by the UIF.

Musa Zondi, communications officer at the Department of Employment and Labour, told News24 that the UIF paid the money using the account number provided, which, following an investigation, was found to Phohole’s personal account. 

Accounts frozen

“Following the discovery, the matter was reported the South African Police Service (SAPS) by CSG Resourcing. The SAPS referred it to the Financial Intelligence Centre (FIC) for urgent interventions on the bank accounts,” Ngwema said.

Initial investigations revealed that after the funds entered Phohole’s account, portions were quickly transferred into numerous other bank accounts held by Phohole and various other individuals.

“This constitutes fraud and or theft. These numerous other accounts were then utilised to further transfer the funds into other accounts, thereby attempting to disguise the original origin of the funds, and by doing so committing the offence of money laundering,” said Ngwema.

The accounts were frozen on 4 June, after the FIC issued intervention notices to the various banking institutions for a 10-day period to assist law enforcement agencies with their process of possible recovery, he said.

The investigation is ongoing, as law enforcement agencies are awaiting a statement form the UIF that shows how the Covid-19 relief payment was manipulated to be paid into the account of Phohole, Ngwema added.

Source: News 24 at https://www.news24.com/news24/southafrica/news/asset-forfeiture-unit-strikes-after-r5m-covid-19-relief-money-paid-into-wrong-account-20200620