The Unemployment Insurance Fund (UIF) has welcomed the arrests of 16 suspects who are accused of swindling the Fund’s COVID-19 Temporary Employer-Employee Relief Scheme (TERS) of R2.2 million.
The suspects were apprehended in Gauteng and North West provinces by the South African Police Service’s Directorate for Priority Crime Investigation, known as the Hawks.
The Department of Employment and Labour said that during the height of the COVID-19 pandemic in 2020, three sole directors of different dormant entities applied for COVID-19 TERS funds from the UIF on behalf of respectively 47, 133, and 141 people, who were seemingly not employed by them.
At least R2.2 million in COVID-19 TERS funds was subsequently paid into the companies’ bank accounts and the money was channelled to certain individuals for personal enrichment.
Following investigations in this regard, the suspects were traced and arrested on Sunday, 27 November 2022.
UIF Commissioner, Teboho Maruping, has welcomed the latest arrests and has commended the Hawks and the Department of Employment and Labour’s Risk, Anti-Fraud and Integrity Management unit in the North West province for their relentless hard work in bringing COVID-19 TERS fraud suspects to book.
“The arrests of these 16 suspects in one operation is the biggest we have witnessed thus far, since the establishment of the COVID-19 TERS scheme. I hope this bold action sends a strong and clear message to would-be and other fraudsters that the long arm of the law will catch up with them.
“Those who have helped themselves to the funds earmarked for workers during the lockdowns must not have any peace. They must know that the net is closing in on them. We will continue to work with the Hawks in a relentless pursuit to bring all COVID-19 TERS fraudsters to book, and we will leave no stone unturned,” said Maruping.
The Commissioner also revealed that the Fund was already conducting Phase 2 of the “Follow the money” project, which entails the auditing of companies to verify if their claims were valid, and if the right amount of money was paid over to workers at the right time.
“We have appointed several forensic audit firms with over 360 auditors who are currently visiting companies that have benefitted from COVID-19 TERS funds and are suspected of fraud. Until all fraudulent funds are fully recovered and the suspects held accountable, we will not rest.
“In this regard, the UIF will continue to work with the Department of Employment and Labour’s Risk, Anti-Fraud and Integrity Management unit and law enforcement partners,” said Maruping.
In 2020, the UIF was entrusted with the responsibility of alleviating poverty in the country by providing short-term financial relief to businesses and workers in order for the economy to survive the devastating impact of the COVID-19 pandemic.
To date, 10 people have been convicted and sentenced to direct imprisonment or suspended sentences for defrauding of the COVID-19 TERS scheme.
Meanwhile, 46 suspects have been arrested thus far and the Fund anticipates more arrests as Phase 2 of the Follow the money project, which started in July 2022, continues.
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