SIU recovers R318 million stolen from Road Accident Fund by law firms
SIU recovers R318 million stolen from Road Accident Fund by law firms! The Special Investigating Unit (SIU) has successfully recovered R318 million from various law firms across South Africa after uncovering a scheme that defrauded the Road Accident Fund (RAF) through duplicate payments.
This recovery comes at a critical time, as RAF faces a financial crisis due to the increasing number of road accident claims surpassing its ability to pay them.
How the Fraud Happened
The fraud occurred when law firms, after securing approved payments from RAF, took additional steps to withdraw the same funds directly from RAF’s bank accounts—before the scheduled payment date.
Road Accident Fund
SIU spokesperson Kaizer Kganyago, speaking to Newzroom Afrika, explained that RAF’s financial struggles have led to a 180-day waiting period before claims are paid.
“Because RAF does not have money, it has a system which says any claim that is approved, it has to wait 180 days before the payments can be made. Therefore, the system waits for 180 days so that they can rationalise the payment,” said Kganyago.
However, many law firms were unwilling to wait for 180 days and instead took advantage of a legal loophole.
-
They worked with court sheriffs to obtain court orders, forcing RAF’s bank to release the funds to them immediately.
-
-
When RAF’s system eventually processed the claim after 180 days, it made another payment to the same law firms, resulting in duplicate payments.
Millions Misappropriated
Many law firms kept the duplicate payments instead of reporting them to RAF.
“They just keep that money and go on with their lives,” Kganyago said.
In some cases, the SIU discovered that the funds meant for road accident victims had been misappropriated. These funds were supposed to be held in trust accounts and distributed to the claimants, but some law firms used the money for personal gain.
Legal Action and Recoveries
The SIU has referred multiple cases to the National Prosecuting Authority (NPA) and is working with the Hawks, South Africa’s elite crime-fighting unit.
-
The Hawks have completed investigations into several law firms that misused RAF funds.
-
These investigations have now been forwarded to the NPA for legal action.
“We have referred such cases to the National Prosecuting Authority, which is now working with the Hawks. The Hawks have already finalised their investigations,” Kganyago confirmed.
For law firms that kept the duplicate payments but did not misappropriate the money, the SIU has asked them to return the funds.
“The SIU just wants the law firms to return the duplicate amounts to RAF, and the initial payments are channeled to the road accident victims,” said Kganyago.
No Evidence of RAF Officials’ Involvement
The SIU has not found evidence that RAF officials colluded with law firms in the fraudulent scheme. However, investigations remain ongoing to ensure full accountability and prevent similar fraudulent activities in the future.
RAF’s Financial Struggles Continue
This scandal unfolds at a time when RAF is struggling to stay financially afloat.
-
The fund is facing a growing backlog of claims that it cannot pay on time.
-
Corruption and mismanagement have worsened the financial crisis.
-
The SIU’s crackdown is crucial in recovering stolen funds that should be used to compensate road accident victims.
What Happens Next?
-
The SIU will continue recovering funds from law firms that unlawfully received duplicate payments.
-
The NPA will decide on criminal charges against law firms that misappropriated funds.
-
Stricter oversight measures will likely be introduced to prevent similar incidents in the future.
Conclusion
The recovery of R318 million is a significant win in the fight against corruption within RAF. However, it highlights the deep-rooted financial and operational challenges that the fund faces. As legal proceedings unfold, law firms that misused RAF payments will face legal consequences, ensuring justice for road accident victims who depend on these funds.
