SIU to Investigate Lottery Commission Corruption

The Special Investigation Unit (SIU) will seek to recover all financial losses suffered by the state and the National Lottery Commission (NLC) after an investigation into the affairs of the commission revealed millions of rand in allegations of money laundering and corruption.

The SIU presents the progress of the investigation to Parliament’s Portfolio Committee on Trade, Industry and Competition.

The ongoing investigation is expected to be completed this month with a report to be delivered to President Cyril Ramaphosa in April.

SIU National Director of Investigations Leonard Lekgetho described how, in one case, a former NLC board member allegedly “hijacked” a nonprofit organization (NPO) that received funding from at least 23 million rand to build a retirement home in Mpumalanga.

“The project has started but is not finished because the funds allocated to the project have been redirected to people connected to the NLC.

“Investigation revealed that R5 million of the R23 million received from the bank account [of the NPO] was transferred to a lawyer from [a group of companies] belonging to the former member of the board of directors for the transfer of a luxury building in favor of their client,” said Lekgetho.

Lekgetho revealed that the investigation of the same former board member revealed that an NPO had transferred at least R3.3 million to the bank account of a company linked to a senior NLC official a day after receiving R7.5 million in funding for the construction of a drug treatment facility. center of Gauteng. This company then transferred R1 million to the board member’s account.

The same modus operandi was executed for the construction of a rehabilitation center in Mpumalanga.

“[Furthermore], the SIU investigation revealed that during the period from March to May 2018, the former board member received a total amount of R5.47 million in his personal bond account from various NPOs. The bail was for his primary residence in Gauteng,” he said.

Lekgetho said an investigation into a second former board member revealed that he received – directly or indirectly – at least R10 million from an NPO which was partly used as a deposit for a house of R27 million and a deposit for a luxury vehicle.

Trusts

Lekgetho told the committee that a senior NLC official was allegedly involved in setting up trusts to act as conduits for money laundering.

“[A] senior official has engaged in a number of business activities with individuals and entities that directly or indirectly benefit from NLC grants. We have identified the key people involved. In 2015, the senior official and a known person registered two trusts,” he said.

According to Lekgetho, the trust received at least R14 million in transfers from a non-profit company and private companies that received funds from these NPOs.

“After the trust received funds from the NLC [beneficiaries]the funds were then redistributed to the personal accounts of senior NLC officials and other family businesses,” he said.

The investigation also revealed that a company owned by the brother of a senior NLC official had received at least R34 million in payments from NPOs that had secured funding from the commission.

“So what happened is the NPOs transferred money to the trust account and then from the trust account, the money is transferred to the business…then from the business, the Money is transferred for the benefit of the NLC manager.

“During the period from March 3, 2016 to July 11, 2018, the company…disbursed a total of R5.6 million for the benefit of the senior NLC official and entities related to his family members,” it said. -he declares.

Drilling financing

Lekgetho told the committee that during the investigation, the SIU found out how an NPO had secured R55.4 million in funding to drill at least 200 boreholes in five provinces, but most funds ended up in the pockets of individuals and businesses.

He said during the transfer:

some R10 million was transferred to a company ‘for services which were never rendered’

at least R750,000 was used for the purchase of two vehicles

some R2.6 million was spent on buying a house

R1 million was transferred to the entity’s calling account

2.2 million rand ended up in the account of another entity

some R340,000 was used to purchase a vehicle

Lekgetho said the boreholes were drilled in the provinces by two companies one entity of which received at least R10 million for doing no work.

The SIU continues its presentation to the parliamentary committee.

(With contributions from the South African government press release)

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