SIU probes R20m EMS graft

PROMINENT Eastern Cape businessmen have been implicated in alleged wrongdoing amounting to almost R20-million in Emergency Medical Services (EMS) contracts.

The Special Investigation Unit (SIU) has referred more than 60 criminal cases to the National prosecuting Authority (NPA) for prosecution.

The investigation was prompted by the provincial department of health amid allegations of fraudulent activity at the East London EMS unit.

Following its investigation, the SIU referred 27 cases to the Asset Forfeiture Unit for civil recoveries and 39 cases to the South African Revenue Services (SARS).

The Daily Dispatch has seen a copy of the report, which implicates a total of 80 service providers. Some of the names listed include well-known East London businessmen and two former health officials.

“The investigation at the EL EMS uncovered evidence of fraud, forgery and uttering,” stated the report.

The period under investigation was between 2004 and 2012, with recommendations being put forward for action against those implicated.

EMS units in Queenstown and Mthatha are reportedly also being probed.

At the East London EMS, the investigation found that R5.162-million related to collusion between service providers and officials while it is alleged that service providers illegally benefited from a further R3.475-million.

The report also states that SIU found evidence in 39 matters that supplier companies were not tax compliant and were contravening tax legislation.

“The value of these referrals was R10.809-million. These matters were referred to SARS for further action.”

The report states that an analysis of the payment packs confirmed:

• The same addresses, fax and contact numbers were used on quotations from “different” companies;

Quotes submitted were from the same service provider, who owned all three companies vying for the same contract; and

Quotes from fictitious companies being submitted.

No action has been taken against the implicated officials as they have since left the department of health.

The SIU is investigating allegations that department of health officials received kickbacks affecting the fair allocation of work to service providers.

Health spokesman Sizwe Kupelo confirmed the SIU probe.

“Fraud and corruption will not be tolerated within the department. All those involved have either been fired or voluntarily resigned.

“We are working closely with law enforcement agencies to ensure those involved are arrested and prosecuted.”

SARS spokesman Adrian Lackay said SARS would prefer not to make public comments on specifics concerning identified taxpayers at this stage, “primarily because of confidentiality provisions that exist in the tax and customs laws that SARS administers”.

In January 2013, the Dispatch reported on another SIU report which revealed that close on 9000 health department employees were active company directors. About 1000 did business with the department.

The second phase of the probe started in May 2012, and the report, seen by the Dispatch, shows that R42.8-million was paid to 235 employees.

“Spouses of employees doing business with health received payments of R11-million. About 35 spouses of health employees linked to 35 companies do business with the department,” the report shows. — mphumziz@dispatch.co.za