Splurging on clothing, a watch, expensive furniture and nearly R2 million in sound equipment, it took just two weeks for a man to squander R7.5million defrauded from the Co-operative Governance and Traditional Affairs Department (Cogta).
Businessman Mex Dhladhla, of Pietermaritzburg, was on Tuesday sentenced to 12 years in prison for his part in the scam.
Durban Commercial Crime Court documents show that Dhladhla was involved in the scam with Nokwazi Chule and Precious Hlela, who both worked in supply chain management at the department.
Chule and Hlela switched the Ingwe municipality’s bank account number with that of Dhladhla’s company, Imvusa Trading 859, and deposited the money. Court documents revealed that Dhladhla then went on a spending binge, buying expensive items that included:
- Sound equipment of more than R1.8million
- A VW Golf for R300 000
- High-end furniture including sofas and coffee tables worth R237428
- An Armani jacket for R60 000
- A Tag Heuer watch for R65 000
- Shirts and caps for R66 000
- Braai equipment for R54 000.
He also used the money to pay an overdraft of more than R100 000, and made numerous cash withdrawals (sometimes as much as R300000) over this period.
The money was meant for a community centre in Bulwer.
Documents also revealed that once the department got wind of the matter, it started proceedings to freeze Dhladhla’s bank account and the Hawks got involved in the matter. The Hawks discovered that the bank account was left with only about R34 900 when the account was frozen after the two-week spending spree.
Dhladhla then came clean about his activities and pleaded guilty.
During the sentencing phase, Dhladhla’s defence advocate, Brad Osborne, said his client had no previous convictions and that he was a father of six children aged 3 years to 26 years.
He argued that Dhladhla was also taking care of his father, a retired policeman who had fallen on hard times owing to bad investments. If Dhladhla served jail time, about 30 people under his employment could lose their jobs.
Osborne argued that the real architects of the scam were the two Cogta employees who had approached Dhladhla and that his client had co-operated with investigators.
He said Dhladhla was willing to pay a fine of R50 000 and then R10 000 every month for the next five years, and that this could be coupled with a suspended sentence.
The prosecutor, Advocate Rajini Govender, said Dhladhla was forced to plead guilty because of the overwhelming evidence obtained by the State. She said Dhadhla should have reported his co-accused’s illegal activity.
“It’s people like the accused that make people in government commit fraud,” she said.
Govender said if the offer for Dhladhla to pay back the money was accepted, it would make the state look like a debt-collecting agency. It was thefts like Dhladhla’s that made it hard for cash-strapped municipalities to provide services to the community, she said.
In a reference to an article carried by the Daily News last week, Govender said people were now forced to provide their own services. The Daily News last week reported on irate residents of Waterloo who built their own speed humps because their complaints were not being heard by the eThekwini Municipality.
“White-collar crime is reaching alarming proportions in South Africa,” she said.
Govender asked for the prescribed 15-year sentence for fraud.
Magistrate Christobelle Mazibuko expressed disappointment that Dhladhla, a former teacher, had committed the crime.
“It is a serious offence,” Mazibuko said, adding that Dhladhla was no less guilty than the other accused.
Sentencing him to 12 years’ imprisonment, she pointed out that Dhladhla’s fiancée was an accomplished businesswoman and the primary caregiver to his children.
Chule and Hlela’s trial will begin in April.