Hawks arrest five in connection with R12 million construction fraud

Five suspects and four companies have been arrested and charged with fraud, theft, and money laundering, with a loss to a company that was swindled out of R12 million.

The Directorate for Priority Crime Investigation, the Hawks, said during a joint effort that role-players based in the Eastern Cape and Western Cape saw the success of the suspects being arrested.

Lieutenant Colonel Avele Fumba explained that the paper trail began more than ten years ago when an employee began a private company rendering the same services as the one where he worked.

“It is reported that between the period of 2015 and 2018, Pro Khaya, a construction company based in Gqeberha, wanted to expand their business to Cape Town, where they employed one of the accused, a qualified quantity surveyor, as a branch manager,” he said.

“The accused allegedly abused his position by establishing his own private company that offered the same services as the parent company. Through meticulous investigation conducted by the Hawks, the accused strategically identified subcontractors who colluded with him to facilitate fictitious invoices for payments to be paid by the parent company.”

Fumba said it was further alleged that the subcontractors, in turn, would make payments back to his private company. The estimated loss amounted to R12 million. He added that more arrests are imminent.

The suspects, aged between 37 and 59, are expected to appear at the Cape Town Magistrate’s Court on January 27.

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Cape Argus