Hawks arrest former municipal official and service provider in R530,000 fraud case
The Hawks’ Serious Commercial Crime Investigation unit in Welkom has arrested a former municipal accounting officer and a service provider, along with his company, in connection with a R530,000 fraud case dating back to 2019.
Free State Hawks spokesperson, Warrant Officer Fikiswa Matoti, confirmed that the suspects, aged 42 and 57, were taken into custody for their alleged involvement in fraudulent activities tied to irregular debt collection services procured by the Bultfontein municipality.
Investigations reveal that in August 2019, the former municipal official unlawfully appointed a service provider to handle debt collection without following prescribed municipal supply chain procedures. Subsequently, a payment of R530,190.80 was made to the service provider, despite no services being rendered.
The irregularity came to light after the Auditor-General South Africa (AGSA) flagged the transaction in an official report. The report highlighted wasteful expenditure and alleged that the service provider had submitted fraudulent documents and invoices. The findings prompted municipal councillors to escalate the matter, leading to a formal complaint and the involvement of the Hawks.
The suspects face charges of fraud, contravention of the Municipal Finance Management Act, and violation of the Debt Collectors Act.
All three the former official, the service provider, and his company are scheduled to appear in the Bultfontein Magistrate’s Court today.