Businessman Dennis Modika, who defrauded the Unemployment Insurance Fund (UIF) of more than R5 million from the Covid-19 temporary employee relief scheme (TERS) was found guilty by the Johannesburg specialised commercial crimes court on Monday.
Businessman Dennis Modika, who defrauded the Unemployment Insurance Fund (UIF) of more than R5 million from the Covid-19 temporary employee relief scheme (TERS) was found guilty by the Johannesburg specialised commercial crimes court on Monday.
The UIF implemented TERS to assist employees by paying a portion of salaries when businesses had to close or cut down operations due to the national lockdowns during the Covid-19 pandemic.
According to the charge sheet, seen by the Mail & Guardian, Modika did not make any contributions to the UIF, nor was his company Modika Trading and Projects registered with the fund before the pandemic.
“The entity was registered with the department of labour and employment on 15 December 2020 through an online application and allocated UIF reference number 2635910/3,” reads the charge sheet.
It shows that on 15 December and 29 December 2020 Modika Trading and Projects declared 1 358 employees. Modika submitted fraudulent applications on behalf of the employees purported to be employed by the entity, the state said.
An amount totalling R5 519 109.32 was paid into its First National Business Bank account — of which Modiwa was the sole signatory — in eight payment schedules between January 2021 and October 2022.
“The entity did not have the number of employees declared to the department and it was not entitled to the funds mentioned it received,” the charge sheet says.
Modika induced the department’s employees to process the application for the relief funds under false pretences.
He is still to be sentenced.
Since the implementation of TERS, the UIF has disbursed R29 billion to employers.
On 29 November, the UIF and labour federation Cosatu launched the Thusa Babereki (Help the Workers) digital platform to enable workers to determine if any TERS funds were fraudulently claimed against their names by employers.
The platform is an addition to the Follow the Money portal launched in September 2022 as a tool to check if employers used TERS funds lawfully and paid the right employees.
The platforms will further strengthen the UIF’s efforts to recover funds that were not paid to workers, UIF commissioner Teboho Maruping said.
“Through the Follow the Money project, the UIF has already secured successful convictions of at least 20 people who were handed lengthy prison sentences by the courts for Covid-19 TERS fraud,” he said.
Maruping said the investigations that came from Follow the Money resulted in the recovery of R61 million by the Special Investigating Unit and over R760 million was recovered by other law enforcement agencies, including the National Prosecuting Authority and the Asset Forfeiture Unit.
“The project has triggered R2.4 billion worth of Covid-19 TERS funds that have been repaid by employers directly to the UIF,” he said.
Cosatu’s Gauteng provincial chairperson Amos Monyela said the federation had received many complaints from workers who had not received money meant to be disbursed to them by their employers. Workers from the retail; hospitality; mining; textile and clothing; paper and chemical; agriculture; transport and security industries were most affected.
“If this launch and this programme [Thusa Babereki] is going to assist, I think then we will be able to find those unscrupulous employers,” said Monyela.
The platform comprises an online portal as well as a WhatsApp channel with automated menus and easy-to-use steps. The WhatsApp channel can be accessed by adding the number 067 411 0241 to any WhatsApp account as a contact and sending a greeting message to initiate interaction. The online portal can be accessed at ufiling.labour.gov.za/uif/follow-the-money
Maruping said the UIF was pleased to work with Cosatu Gauteng and its affiliates on this project, adding: “The use of the platform will intensify our efforts to close the net on those who have stolen from the working class.”