The Special Investigating Unit (SIU) has welcomed a series of arrests, convictions and asset preservation orders linked to fraud in the Unemployment Insurance Fund’s Temporary Employer/Employee Relief Scheme (TERS), with more than R27 million in stolen public funds now either recovered or safeguarded.

The developments come as authorities intensify efforts to crack down on widespread corruption linked to COVID-19 relief funding that was meant to support struggling workers and businesses during the pandemic.

In the largest case, three suspects appeared before the Middelburg Magistrate’s Court in Mpumalanga on Monday, facing fraud charges involving nearly R27 million allegedly siphoned from the UIF-TERS scheme through the use of “ghost employees”.

The accused are 48-year-old businessman Fumu Mkalira Msiska, his wife Gladness Mkhonto Msiska, also 48, and his 39-year-old brother-in-law Bongani Zoran Mkhonto.

According to the SIU, the trio allegedly fabricated hundreds of fake employees and submitted fraudulent TERS claims between April and September 2020. The claims were allegedly processed through a company known as A and F Consulting.

The court granted bail of R300 000 each to the Msiska’s, while Mkhonto was released on R3 000 bail.

The SIU said the High Court in Mpumalanga has already issued a preservation order against assets believed to have been acquired using proceeds of crime.

The preserved assets include three properties located in Pretoria, Middelburg and White River, as well as household goods, office equipment and frozen bank accounts.

Authorities also seized several luxury vehicles, including a 2019 Land Rover Range Rover L560, a BMW X6, a Mercedes-Benz V250 D, a Toyota Fortuner and a Mercedes-Benz C180 Kompressor. A Caterpillar backhoe loader was also confiscated.

The SIU said its investigation uncovered that the accused allegedly siphoned R26.9 million from the UIF-TERS system by creating fictitious workers and fraudulently claiming relief funds intended for employees affected by COVID-19 lockdowns.

Investigators found that the number of alleged ghost employees steadily increased over the six-month period, with 724 fake workers claimed for in April 2020, rising to 773 by September 2020.

The SIU further alleged that money received through A and F Consulting was later transferred to another company, Khulani Quality Contribution, which is linked to Msiska’s wife.

Mkhonto allegedly played the role of a “runner” by sourcing identity details used to submit the fraudulent claims.

The SIU said many of the people whose personal information was used were from Mpumalanga and the North West. Some victims reportedly provided their details after being promised special grants or free driving licences, while other information was allegedly stolen from a local sheriff’s office.

Authorities said the identity theft had devastating consequences for innocent victims.

The SIU cited one case reported to the Hawks in KwaZulu-Natal in 2022, where a woman struggled to access her maternity UIF benefits because records falsely showed that a company called Consulting Engineers had already claimed TERS benefits on her behalf.

The matter was later transferred to Hawks investigators in Mpumalanga as part of the broader investigation.

Meanwhile, in a separate matter in the Free State, the Heilbron Magistrate’s Court convicted businessman Ente Thibello Sekhoto and his company, Batlokoa Circle 12 Plaster Services Pty Ltd, on charges of fraud and money laundering linked to UIF-TERS funds.

The SIU investigation found that Sekhoto fraudulently applied for relief funds on behalf of people who were not employed by his company, resulting in the UIF paying out more than R201 000 unlawfully.

The court ordered Sekhoto and his company to repay the Department of Employment and Labour R201 812.36 within four years.

The SIU said the conviction followed a joint investigation involving the Hawks’ Serious Commercial Crime Investigation unit and the National Prosecuting Authority after evidence uncovered by the SIU pointed to criminal conduct.

The anti-corruption unit said the latest arrests, convictions and preservation orders demonstrate progress in holding perpetrators accountable and recovering public money lost through corruption.

The investigations form part of the SIU’s mandate under Proclamation R08 of 2021, which authorised the unit to probe maladministration and corruption linked to the UIF-TERS scheme.

SIU spokesperson Selby Makgotho said the unit would continue working closely with the Hawks and the National Prosecuting Authority to ensure those responsible for looting public funds face the full might of the law.

He said the SIU also remains empowered to institute civil proceedings in the High Court or Special Tribunal to recover financial losses suffered by the state and reverse wrongdoing uncovered during investigations.