Two former City of Ekurhuleni officials and a businessman have been sentenced for tender-related fraud, corruption and money laundering amounting to over R 21.8-million.
The Special Investigating Unit (SIU) welcomes the imprisonment of the accused in the Pretoria Commercial Crimes Court on May 18.
According to SIU spokesman Kaizer Kganyago, the commercial crimes court sentenced businessman Velero David to 10 years for fraud amounting to R21 806 331 and 15 years for corruption of R12 678 602.
Former Ekurhuleni IT executive Nilesh Singh was sentenced to 10 years for fraud amounting to R21 806 331 and 15 years for corruption of R12 678 602.
Andrew Mphushomadi, former IT senior manager at the City, was given a 10-year prison sentence, of which four were suspended, for money laundering. Mphushomadi received the proceeds of crime to the value of R3 365 574.
Two entities that were used in the commission of the crime, Meropa Sechabeng Technology CC represented by David, and Nanga Transport CC represented by Princes Dlongolo, the wife of Mphushomadi, each received a fine of R600 000, wholly suspended for five years.
David and Singh were found guilty of fraud and corruption charges. Mphushomadi was found guilty of money laundering for receiving benefits from unlawful activity.
“The SIU probe in Ekurhuleni revealed that Meropa was fraudulently awarded a tender for the supply and maintenance of computer components. Meropa, together with bid adjudicators failed to disclose a conflict of interest contrary to Ekurhuleni’s bid policies, which provided a list of measurements to combat abuse like fraud, corruption and favouritism,” explained Kganyago.
David, sole director of Meropa, declared during the bidding process that he had no relationship with persons in the service of the State or who may be involved in the evaluation and adjudication of the bid.
Unbeknown to Ekurhuleni at the time, David was related through marriage to Singh, the executive director of the Information Technology Department and influential in awarding the tender.
Singh then resigned and joined Meropa shortly after the bid was awarded.
Mphushomadi, a senior manager in the IT department at the time and a member of Nanga, was also involved in the allocation of the tender.
It emerged during the investigation that shortly after the tender was awarded, Nanga purchased Mercedes Benz trucks for close to R4-million, paid for by Meropa from the money received from the City.
Meropa also splashed out around R8-million cash from the City tender on 16 luxury vehicles.
In February, the commercial crimes court ordered that the assets seized by the Asset Forfeiture Unit in April 2012 be forfeited to the State.
Kganyago stated that the outcome of the Specialised Commercial Crime Court is a continuation of the implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions and to hold those responsible accountable for their actions through a justice process in accordance with the SIU Act 74 of 1996.
Fraud and corruption allegations may be reported via the following platforms:
siu@hotline.co.za.
Hotline: 0800 037 774.
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