Lottery Corruption Case Reaches Court After Years of Delays

The Special Investigating Unit told Parliament earlier this year that it was investigating dodgy grants of over R2-billion.

• Jeremane Petrus Sedibe and Malesela Johannes Khoza appeared in the Kimberley Regional Court facing charges including fraud, theft and money laundering over a R885,000 lottery grant for a gender-based violence project that never existed.
• This is only the second lottery corruption case to reach court despite at least 19 matters referred to the National Prosecuting Authority, some cases dating back to 2022.
• The Special Investigating Unit is investigating dodgy lottery grants worth over R2-billion, with Sedibe allegedly involved in at least six fraudulent non-profit organisations that siphoned money across multiple provinces.

Two Soweto men appeared in the Kimberley Regional Court this week, facing charges including fraud and theft in only the second case involving the misappropriation of lottery funds to be prosecuted.

This is despite at least 19 matters being referred to the National Prosecuting Authority (NPA) with no progress in 18 to date. Some referrals date back to April 2022.

Then there are a further 21 matters under investigation by the Hawks and SAPS. Some of these cases date back to 2020, when then Minister of Trade, Industry and Competition Ebrahim Patel handed over a dossier to the police regarding alleged corruption linked to former senior National Lotteries Commission (NLC) COO Phillemon Letwaba and his family and friends.

The Special Investigating Unit (SIU) earlier this year told Parliament that it was investigating dodgy grants of over R2-billion, and this figure could increase as it was still receiving new tip-offs.

Jeremane Petrus Sedibe and Malesela Johannes Khoza appeared in the Kimberley Regional Court on Monday in connection with a grant of R885,000 for a non-existent GBV project in the Northern Cape.

After several earlier postponements, the matter was set down for trial from 1 to 3 September. But it was postponed once again to allow the pair to brief new counsel, after they told the court that they had parted ways with their lawyer.

The case was remanded to 7 October, and Sedibe’s bail of R15,000 and Khosa’s of R10,000 were extended.

They are yet to plead to a litany of charges that include fraud, theft, forgery, uttering, money laundering and cybercrimes. The charge sheet describes how they allegedly submitted false information and documents to secure funding, and then misappropriated the funds for their personal use.

Sedibe is also charged with Contravening the Prevention of Organised Crime Act for engaging in transactions he knew, or should have known, were proceeds of unlawful activities (fraud or theft). This was allegedly done to conceal the nature and source of the funds by transferring money between accounts and spending it on personal expenses.

Other dodgy lottery funding involving Sedibe includes a R9-million grant to Motheo Sports and Entertainment Foundation for a sports centre in Soweto that was never built. When GroundUp visited the site, we found an empty property that was being used by residents as a rubbish dump.

The only other lottery corruption case successfully prosecuted was against Christopher Tshivule, who was sentenced to eight years’ imprisonment for fraud involving a R1.6-million grant allocated to The Message, a non-profit organisation.

Tshivule was originally charged with fraud along with three other people, including Fulufhelo Promise Kharivhe, who, along with her husband Collins Tshisimba, have been named by the SIU as kingpins in the looting of the lottery.

But charges against the others were dropped after they had made successful representations to the NPA.

Non-existent GBV programmes

Mashudu Netshikweta, who heads up the SIU team investigating corruption involving NLC grants to non-profits, told Parliament’s Standing Committee on Public Accounts (SCOPA) in May this year that Sedibe was allegedly involved in at least six non-profit organisations that had siphoned money from the NLC in various provinces.

In the Northern Cape, Sedibe used an organisation to secure R885,000 for a “supposed gender violence programme” in a remote village, he said, referring to the case currently before the court in Kimberley.

An amount of R500,000 was “successfully paid into the bank account provided by Kgatelopele on 1 December 2021, with Sedibe and Khosa listed as co-signatories on the bank confirmation letter”, according to the Kimberley charge sheet.

But the money was used not in terms of the grant agreement with the NLC. Instead, Sedibe and Khosa allegedly “submitted false documents” and information to justify expenditure so that the second tranche of R385,000 could be released.

Netshikweta told SCOPA that officials from the NLC Northern Cape provincial office had aided Sedibe.

A monitoring and evaluation officer flagged the progress report submitted by Sedibe as fraudulent and provided details of what had transpired to the provincial manager, said Netshikweta. But five days later, the report was altered to confirm that Sedibe had delivered on the project.

The grant was signed off by Aobakwe Gaobuse, who was then NLC acting provincial manager, according to the charge sheet.

Abobakwe was one of seven staff members named in a search and seizure warrant when the SIU and Hawks swooped on the NLC’s Kimberley office in March 2022.

NLC documents were also found during a search of the home that Abobakwe shared with her live-in partner, who was the provincial legal officer.

Netshikweta told SCOPA earlier this year: “In the Free State, he [Sedibe] used a different non-profit organisation and received R1.4 million, which he embezzled entirely.”

And, he said, Sedibe had allegedly “repeated the same scheme” in Limpopo and received R1.2-million for another gender-based violence project, “which he also embezzled entirely.”

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