One fair employee exposes large insurance coverage fraud in South Africa

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  • A PRASA investigation has exposed a multi-million rand rip-off involving bogus insurance coverage claims.
  • The rip-off was once exposed as a result of the honesty of considered one of PRASA’s lowest-paid other folks. Zethembiso Dladla got here ahead after an extra R67,000 was once deposited into her account.
  • The fee was once supposedly for an insurance coverage declare during which Dladla was once injured whilst the use of a teach. However as she instructed PRASA, she hadn’t used the teach, wasn’t injured and had by no means installed a declare.

In its most up-to-date annual document, for 2021/2022, the Passenger Rail Company of South Africa (PRASA) reported a “flood of fictitious private legal responsibility claims” and says that an investigation relating to those lawsuits is underway.

GroundUp has noticed a leaked PRASA investigation document into fraudulent claims price no less than R9-million, processed through the insurance coverage division at PRASA.

This report back to PRASA executives, the Hawks and the Auditor-Normal from September remaining 12 months exposed a fraud ring running out of the commuter rail company’s insurance coverage place of job.

A decent particular person breaks the rip-off

On 28 Would possibly, PRASA paid R67,000 into Zethembiso Dladla’s checking account. This was once significantly greater than the R1,500 she gained in her remaining wage fee. 

Dladla, from Durban, labored for the Peoples’ Accountability to Give protection to (PR2P) programme, PRASA’s quasi-volunteer initiative introduced through Delivery Minister Fikile Mbalula and PRASA chairperson Leonard Ramatlakane in March 2021.

PR2P recruited area people contributors — “volunteers” — to protect rail infrastructure with reference to the place they reside. In go back, they might obtain coaching and a “stipend” of R3,000 per 30 days, in step with the PR2P implementation plan authorized through Ramatlakane on 4 January 2021.

Dladla reported the R67,000-deposit to her line supervisor, Thandeka Mnyandu, pronouncing it was once an error.

The following day, Dladla gained a choice from Sidudzo Mayaba, who mentioned that PRASA had given her this cash through mistake, and requested her to return with him to Gateway Mall. In her 8 June 2021 affidavit, Dladla mentioned that she had identified Mayaba for 2 years via her boyfriend and knew he labored for PRASA in some or different capability.

There, they transferred R55,000 to an account with the reference “Monde”. She was once instructed that she may just spend R5,000 of what remained, and he or she transferred R2,000 to her boyfriend.

Dladla didn’t really feel ok with what had took place and approached a Durban PRASA safety element along with her tale. Quickly after, investigators started uncovering a multi-million rand rip-off run from inside of PRASA’s insurance coverage department.

The fee got here from PRASA’s Insurance coverage division, and was once registered as reimbursement for an harm that Dladla had supposedly sustained at Isipingo teach station in January 2019.

However Dladla had by no means suffered any harm. She instructed the investigators that she’d by no means used the teach.

The investigators found out that the declare reference quantity hooked up to the payout, which seemed to come from the KwaZulu-Natal claims machine, didn’t exist on that province’s machine.

Obligatory items of documentation have been additionally lacking: Dladla’s clinical information, the claims shape itself, and the APS (utility fee agenda), which must be signed through the reliable soliciting for the fee and authorized through some other reliable.

Even supposing required paperwork have been lacking, 3 contributors of the finance division signed off at the declare.

Dladla was once no longer the primary for use on this rip-off. However she was once the primary to talk out.

An eight-year rip-off

PRASA’s investigators found out that Sidudzo Mayaba, the person who had known as Dladla, took her to the financial institution and suggested her on what to do with the cash, was once the previous brother-in-law to Sihle Mayaba, who treated claims in PRASA’s insurance coverage department.

The investigators dug into Sihle Mayaba, and have been approached through a whistleblower.

The whistleblower instructed them that that they had been a runner for Sihle Mayaba. They accumulated ID numbers and financial institution statements, most commonly from unemployed other folks, and passed them over to her “for processing”.

Those other folks would obtain cash from bogus claims manufactured through Mayaba. Like Dladla, they might then switch lots of the cash into some other account. Maximum frequently this will be the account of Zodwa Khanyeza, a relative of Sihle Mayaba. Infrequently they might withdraw money, which was once then given to Mayaba.

The whistleblower instructed the investigators that the rip-off were operating since 2014.

A deep rot within the insurance coverage division

The investigators then proceeded to analyse the claims made in Gauteng and KwaZulu-Natal for the primary part of 2021.

In Gauteng, they found out that during a unmarried month, Sihle Mayaba had submitted APSes for seven claims price a complete of R495,000 that didn’t exist within the Gauteng claims control machine. Mayaba’s awesome, Tilly Nkosi, senior supervisor within the insurance coverage department, had signed off on those claims.

The investigators found out extra abnormal bills. They found out 39 claims price over R3-million that had fraudulent reference numbers. The machine provides declare numbers sequentially, from “00001” up. The investigators discovered that those claims had numbers neatly over the present quantity.

Additionally they found out 44 claims price over R5-million that had an invalid collection of digits — 3 as an alternative of 5.

The investigators concluded that those claims have been processed according to fraudulently generated declare numbers.

A member of the finance division additionally processed one declare 3 times, price a complete of R131,000.

In KwaZulu-Natal, 15 abnormal bills price R952,000 have been discovered. Twelve of those bills didn’t seem within the provincial claims control machine. There was once a replica fee, and two had claims that didn’t fit the injuries and clinical information.

In overall, within the first part of 2021 by myself, the investigators discovered fraudulently-processed claims price over R9-million.

Administrative failure

PRASA’s insurance coverage claims machine was once ripe to milk. The investigators discovered that the dep.’s laws have been circumvented simply — a declare may well be processed with out the specified paperwork, or even then, the ones paperwork have been simply changed or cast.

The folk that are supposed to had been reviewing paperwork earlier than authorising bills didn’t do their jobs. Claims weren’t checked towards clinical information. Bills have been permitted with out the entire required signatories. The controls that are supposed to have saved fraudsters at bay weren’t provide. The investigators unmarried out the supervisory disasters of Nkosi, and Tokolle Mahlake, the overall supervisor of the insurance coverage department.

The investigators suggest disciplinary motion towards Sihle Mayaba and Sidudzo Mayaba, and Nkosi and Mahlake as managers within the insurance coverage department, and a finance supervisor, Thabiso Phori, for processing replica claims and signing off on Dladla’s fraudulent declare.

Additionally they suggested PRASA to open a prison case, release a complete investigation into fraud within the insurance coverage division, and get well the stolen cash.

The honesty of 1 particular person, within the lowest-paid position at PRASA, can have stored the beleaguered rail company tens of millions of rands.

Requests for remark

GroundUp approached PRASA’s spokesperson Andiswa Makanda with plenty of questions, and a request to ahead our inquiries directly to the folks implicated on this fraud – specifically Sihle Mayaba, Sduduzo Mayaba, Tilly Nkosi, Thabiso Phori, and Tokolle Mahlake.

Whilst our questions and requests have been famous, and we introduced an afternoon’s extension, now we have no longer but gained a reaction on the time of newsletter.

We requested if disciplinary steps were taken towards those officers, and if this is the case, what the sanctions have been, and if any of those other folks have been nonetheless operating at PRASA.

We requested if a prison case were registered, and if this is the case, what was once the standing of the investigation.

We requested if a complete inside investigation into the fraud were finished, and what the whole worth of the fraud was once that the investigation had found out. And we requested if PRASA had addressed the weaknesses of their administrative machine that allowed the fraud to be perpetrated.

UPDATE ON 2022-11-18 14:51 — After newsletter PRASA’s Andiswa Makanda despatched the next reaction:

“PRASA Control and the Board are rebuilding the organisation into a reputable establishment to be sure that it is in a position to ship on its felony mandate.

“To this impact, a number of investigations into misconduct, maladministration, corruption, and fraudulent actions had been instituted to handle lapses that enabled systematic corruption throughout the organisation and to make sure end result control for many who had been discovered in charge.

“Disciplinary processes of the ones suspended pending more than a few investigations are at more than a few levels.

“Main points of the results of the more than a few investigations within the trade shall be shared at an acceptable time.

“We also are operating with the Hawks and Particular Investigating Unit in finalising their investigations on different issues.”


By way of James Stent for GroundUp. Republished below CC BY-ND 4.0.



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