Statement by the Executive Mayor of Cape Town, Alderman
Patricia de Lille
City of Cape Town: Forensic investigations
4 April 2012
The City of Cape Town is determined to root out fraud and corruption,
wherever and whenever it may occur. Therefore the City, arguably more
than any other metro in South Africa, takes proactive action to identify
any criminal activity and deals with it to the full extent of the law.
As part of a multifaceted corporate governance structure within the City
of Cape Town, a forensic department has been established and
operationally placed in the office of the City Manager. The mandate of this
department is to investigate allegations of corporate crime.
The City continuously evaluates and re-evaluates our systems and control
measures to ensure that weaknesses or gaps are eradicated; however, we
find that a small minority of people with criminal intent have attempted to
defraud the City and its ratepayers.
These attempts to defraud the City impact on all of us because at the end
of the day service delivery can be negatively affected. We are seized with
a number of cases where prospective service providers to the City
attempt to gain contracts or tenders by misrepresenting their HDI status.
In essence, we find that this sort of conduct erodes the fair and equitable
processes put in place by our Supply Chain Management Department.
The importance of internal controls underpinned by information received
from concerned ratepayer’s has lead us to uncover, what we believe to be
a crime syndicate, that has defrauded the City by submitting false claims
and bank account numbers in respect of service refunds. This
investigation is on-going, however, by acting swiftly we have prevented
losses in the amount of approximately R800 000.
The City’s forensic department is actively engaged with the Special
Commercial Crime Unit (SCCU) and the Directorate of Priority Crime
Investigations (Hawks). We meet on a monthly basis with representatives
of these units to discuss cases that the City has reported for criminal
investigation.
By way of example a recent matter that has been finalised in court last
week involved a service provider who fraudulently obtained contracts with
the City to the approximate value of R1 900 000 by “cover quoting”. The
owner of this entity, Mr Nigel John Du Plooy was found guilty of fraud and
received a R30 000 fine or twelve months imprisonment together with a
further twelve month imprisonment suspended for five years on condition
that he is not convicted of a similar offence.
We value the assistance of community members in our fight against fraud
and corruption. This is best illustrated where a number of community
members recently came forward with information that a now former City
employee demanded money from them in order to illegally allocate them
housing which was not due to them.
The City investigated all these claims which resulted in the court finding
Ms Nomkhitha Matinisi guilty of eight counts of corruption and she was
sentenced to five years in jail of which two years was suspended on
condition that she was not convicted of a similar offence.
The City has adopted a zero tolerance approach towards fraud and
corruption and fraudsters must realise that we will pursue them to the full
extent of the law. This is best illustrated by the recent High Court
application award for a provisional restraint order dealing with realisable
property of a former City employee Robert Fredericks, his wife Yolande
Fredericks and her father Basil van Schalkwyk.
This order was made in terms of section 26 of the Prevention of Organised
Crime Act No. 121 of 1998. The forensic department investigated
allegations that Robert Fredericks illegally awarded City contracts to his
father-in-law and wife and the preservation order was obtained to prevent
any dissipation of assets prior to the court case which is set down for
hearing on 14/15 June 2012.
It is vital in the fight against fraud and corruption for staff, ratepayers and
citizens to always be vigilant and report suspicions of fraud or corruption
to the City’s Hotline at 0800 32 31 30.