Hawks and SIU raid accountants in lottery corruption investigation

Accountants allegedly prepared fraudulent financial statements to get lottery funding

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Logo of SIU

The Special Investigating Unit has been the one state institution that has been effective in acting against corruption in the Lottery. Logo taken from Wikimedia

A raid by the Hawks and the Special Investigating Unit (SIU) on a Kimberley accounting firm was part of an ongoing investigation that began with a raid on the National Lotteries Commission’s (NLC) office in the city almost two years ago.

The raid on the unnamed accountants came after a search and seizure warrant was granted to the SIU by the Kimberley Magistrate’s Court. Laptops and “relevant” documents were seized.

It followed a tip-off from a whistleblower claiming that “certain accounting firms and accountants were allegedly engaged in criminal activities by aiding nonprofit organisations (NPO) and nonprofit companies (NPC) in preparing and producing fraudulent financial statements which are meant to be submitted to the NLC in support of their application for grant funding,” SIU spokesperson Kaizer Kganyago stated.

One of the requirements for NLC grant funding in terms of the Lotteries Act is that an applicant must submit an audited financial statement together with an application form, Kganyago said.

The whistleblower alleged that several NPOs and NPCs submitted fraudulent financial statements to the NLC, which were prepared, produced and signed off by the directors and or representatives of the accountants without any bank statements submitted to the accountants, he said.

Computers, hard drives, and documentation relating to grants issued between 2014 and 2020 were seized during a March 2022 raid on the NLC’s offices and the private home of the two senior employees, GroundUp reported at the time.

Seven NLC Northern Cape employees were named in the search and seizure warrant issued by a Kimberley court in 2022, including Aobakwe Gaobuse, the deputy provincial head and her partner, Edmond Macatees. The SIU and Hawks found a large number of official NLC documents at Gaobuse and Macatees’s suburban home.

Wednesday’s raid is linked, “among others”, to the raid on the NLC’s offices two years ago, Kganyago said.

GroundUp has previously reported, on several occasions, how forged documents were used in multimillion-rand grant applications.

Audit firm SkX Protiviti, which was appointed by the NLC to investigate lottery corruption, reported that they had discovered how fraudulent finances had been used to apply for grants (see Missing documents and poor oversight).

“In some cases, the only financial records that were found were those provided by the beneficiaries during the application stage, and we noted that in some instances, the financial position presented by the beneficiaries appears to have been misrepresented and/or fraudulent,” SkX reported.

The NLC Kimberley office also featured last week in a report back to Parliament on the SIU’s progress in its investigation into grant fraud.

SIU head Andy Mothibi told MPs how an NPO, Thusong Development, which had received a grant of R2.6-million for “online acting classes”, transferred R50,000 to Gogontle Matseke, who was employed by the NLC in its Kimberley office.

Matseke was charged with misconduct but resigned before facing a disciplinary inquiry. The SIU intended to pursue civil proceedings to recover the money and had also referred the matter to the police for criminal investigation, Mothibi said.

TOPICS:  National Lotteries Commission

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