Tshepang Phohole received a R5.7 million payout from the UIF which was supposed to go to 1 400 workers. Instead, he and his family allegedly defrauded the state and went on a massive spending spree. The UIF payment was originally meant to go to CSG Resources, a labour brokerage company, but instead, the funds landed up in Phohole’s account.
Phohole who works as a packer at a paint company became an instant millionaire.
Thobile Lamati, the directory-general of the labour department informed parliament’s standing committee on public accounts on Friday that Phohole create a new profile as an employer using CSG’s UIF number and entered his own banking details into the system.
“When the company tried to access the system, they were blocked. They then requested a new password and were given access. They uploaded their employees, but overlooked [the changed banking details],” he said.
“In the process of resetting the password, there could be collusion between some of our officials who are responsible for this, or the employee accessed the company profile with the express intent to defraud the fund,” he said.
Hawks spokesperson Col Katlego Mogale has revealed that the investigation is not complete and no arrests have been made.
When the Sunday Times visited Phohole’s house this week, Mojela said her son was out and would be back soon. He did not return.
Mojela said he had kept her in the dark about his windfall.
“I had no idea that my boy had this money. He has not been working so he was here looking after me because I am sick,” she said.
“I don’t know how he got this money maybe it was just a mistake, but he needs to tell me what is going on.”
When she learnt that R4.2m of his windfall was allegedly funnelled to her husband, daughter and son-in-law – and that her family was the focal point of a criminal investigation – she became physically ill.
The botched payment to Phohole, and a R4.7m payment to a retired bus driver, have put the focus on UIF systems.
UIF spokesperson Makhosonke Buthelezi said forensic auditors flagged 75 claims that were possibly fraudulent, 57 of which are still under investigation. There were three, worth a total of R11m, where fraud was only picked up after the fact. Buthelezi did not give further details.
He said the botch-up has led to tightened security, which includes an IT system that will closely monitor which staff make changes to payment profiles, and a policy change so that only employers may amend banking details.
The online claims portal was suspended for three days to tighten internal controls.
“This resulted in delays with May payments, and where fraudulent activities are suspected, the fund will stop the payment, which may result in delays for certain employers,” he said.
On the day that the money was paid into Phohole’s account, he transferred the money into a number of different accounts according to court documents.