R161m UIF-TERS fraud: SIU and SAPS launch raids in Gauteng and KZN

The Special Investigating Unit and specialised South African Police Service units on Thursday carried out early morning raids at multiple properties across Gauteng and KwaZulu-Natal as part of an investigation into a syndicate accused of siphoning about R161 million from the Unemployment Insurance Fund’s Covid-19 Temporary Employer Employee Relief Scheme.

The authorised operation involved coordinated searches at offices, private homes and the UIF Head Office in Pretoria. It forms part of an investigation targeting 16 companies and more than 35 individuals believed to have played central roles in the submission of false claims during the Covid-19 relief period.

The SIU said the search and seizure operation was conducted with the support of the SAPS National Intervention Unit, the Hawks and the Tactical Response Team. A warrant issued by the Special Tribunal allowed investigators to enter various properties to obtain documents, bank statements, false TERS applications, correspondence, computers, data storage devices, mobile phones and network equipment that may be relevant to the case.

The SIU said its investigation, authorised under Proclamation R8 of 2021, has so far uncovered evidence pointing to a well organised scheme in which companies submitted fraudulent TERS applications for people who were not employees. The funds paid by the UIF were allegedly not passed on to workers but shared among members of the syndicate in transactions consistent with money laundering.

SIU spokesperson Kaizer Kganyago said among the businesses named in the operation is Nakomang Trading Enterprise in Gauteng, which received more than R19 million. SIU teams searched the company’s Sunninghill offices as well as linked homes in Rosettenville and Kenilworth. Another business identified is Lubelo Hlomuka Holdings, also known as SA Scrum Assembly, which operates in both KwaZulu-Natal and Gauteng and received more than R15.9 million.

The SIU has identified its director, Nhlakanipho Mngomezulu, as the alleged mastermind of the network. Searches connected to this company took place in Pietermaritzburg, Kenville in Durban, Sandton and Fourways. Bokoharama Construction in KwaZulu-Natal, which received more than R18.1 million, was also searched.

Its director, Thamsanqa Madlala, a councillor at the Ray Nkonyeni Municipality, is a key person of interest. Properties in Port Shepstone, including areas such as Anerley and Margate, were visited by investigators. Other searches included Aventador Gate in Pretoria, which received R3.8 million, as well as additional companies based in KwaZulu-Natal.

“Several individuals were targeted as part of the same operation. The SIU has identified Madlala not only as a company director but also as a central figure whose business account received R18 million in UIF TERS payments. The investigation shows that funds were used for asset purchases linked to senior members of the syndicate.

Another individual, Yolanda Nombuso Mgobo, is alleged to have received and distributed more than R18.6 million. Properties linked to her in Scottburgh and Amanzimtoti, as well as premises associated with her fiancé, were searched.

The SIU also visited the homes of Sphamandla Sokhela and attorney Nhlakanipho Zondi in Pietermaritzburg and Edendale. Both are suspected of acting as proxies for the alleged mastermind. Other individuals named include Senzo Gumede, who is a director of companies the SIU believes were used to launder funds, and Sboniso Ronald Cele and Simtholile Dlamini, who are described as alleged runners. Searches connected to these individuals took place in Port Shepstone and Oakdene in Johannesburg,” said Kganyago.

He said the Department of Employment and Labour’s UIF Head Office at 230 Lillian Ngoyi Street in Pretoria was searched as part of efforts to obtain evidence related to the possible involvement of officials. The SIU is probing whether staff members assisted in enabling fraudulent applications, bypassing internal audit checks or removing irregular profiles from the UIF system.

The investigation forms part of the SIU’s mandate under Proclamation R8 of 2021, which authorised a review of TERS payments made to individuals not entitled to receive them and the submission of false or defective applications.

According to the SIU, all materials seized during Thursday’s operation will undergo forensic analysis. The Unit will institute civil proceedings to recover identified losses suffered by the state and will refer evidence of criminal conduct to the National Prosecuting Authority under the Special Investigating Units and Special Tribunals Act. Kganyago said the operation is a significant step in uncovering the full scale of the alleged fraud.

“The SIU is conducting a coordinated search and seizure operation as part of a broader investigation into a well organised syndicate that allegedly defrauded the UIF of R161 million through false TERS claims,” he said. He added that evidence pointing to criminal conduct will be handed to the NPA once the investigation is complete.