Julius Malema's case will stand or fall on whether the prosecution can show that he "ought reasonably to have known" he was benefiting from the "proceeds of unlawful activities".
Malema was charged with 16 counts of money laundering in the Polokwane Regional Court on Wednesday, amounting to R4.58-million.
The money allegedly flowed to Malema's Ratanang Family Trust, directly as dividends and indirectly as kickbacks, from a R52-million contract that was allegedly awarded improperly to On-Point Engineering by Limpopo's roads and transport department.
In September 2009, the department advertised a contract to administer a programme management unit that would take over many of its functions. According to the draft charge sheet, On-Point beat 15 other bidders by allegedly making false claims about its experience, qualifications and tax status. On-Point directors Lesiba Gwangwa and Kagisho Dichabe have each been charged with four counts of fraud.
Once the contract was awarded to On-Point, millions allegedly flowed to Malema through two channels: dividends paid from On-Point to its shareholders, and kickbacks paid either directly or indirectly by service providers and subcontractors.
The Prevention of Organised Crime Act, under which Malema is being charged, states that "any person who acquires, uses or has possession of property and who knows or ought reasonably to have known that it is, or forms part of, the proceeds of unlawful activities by another person shall be guilty of an offence". The offence carries penalties of a R100-million fine or 30 years in jail.
Constitutional law expert Pierre de Vos wrote that the "very broad scope" of the Act could be sufficient to secure a conviction.
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