Man sentenced to 15 years for defrauding KZN department

Mlungisi Brian Khumalo was sentenced at the Durban Specialised Commercial Crimes Court on Friday, February 7, to an effective 15-year imprisonment.

He pleaded guilty (Section 112) to eight counts of fraud and 14 counts of money laundering amounting to almost R1.5 million.

National Prosecuting Authority (NPA) regional spokesperson, Natasha Ramkisson-Kara said he committed these offences against the KwaZulu-Natal (KZN) Department of Agriculture, Environmental Affairs and Rural Development (DOA).

Khumalo, 46, used the two companies (entities) he was affiliated with, namely Khumzi Business Solutions (Khumzi) and Ubhaqa Lwethu Services Resources Development (Ubhaqa) to receive and move the funds.

“In his plea, Khumalo said that he met his co-accused Nkosinathi Emmanuel Mkhize, in the year 2012, while visiting the offices of the DOA in Cedara, where Mkhize was an employee. Khumalo said that he regularly visited the DOA offices to check if there were any tenders published on the notice board. He became acquainted with Mkhize who told him that he (Mkhize) managed and oversaw a substantial budget at the DOA and that he (Mkhize) could create (fictitious) tender contracts and authorise payments for those contracts. Khumalo said that Mkhize told him that they could make a substantial amount of money if they worked together,” said Ms Ramkisson-Kara.

She added that Khumalo and Mkhize then colluded, and Mkhize falsified documents to create an impression that a tender had been issued to Khumalo for services rendered by the companies (Khumzi and Ubhaqa), to the DOA. Invoices were submitted by Khumalo’s companies and the DOA paid approximately R 1.5 million.

Ms Ramkisson-Kara said that neither Khumzi nor Ubhaqa had rendered the services for which the payment was received. The funds went from the DOA into the bank accounts of Khumzi and Ubhaqa. From there Khumalo transferred the money into his personal bank account. Thereafter sums of money were given to Mkhize either via his bank account or in cash. The matter came to light when the Chief Financial Officer (CFO) at the DOA discovered the fraud, and the pair were arrested.

In aggravation of the sentence Advocate Ranjini Govender led the evidence of the CFO of the DOA who testified on the financial loss suffered by the DOA because of the offences. The official said that the offences hurt the work of the DOA, as they subsidise farmers who raise livestock and grow produce which inevitably ends up in households. The loss of money means that products need to be imported, and there is a shortage of food.

“Khumalo was sentenced to 15 years imprisonment for eight counts of fraud, and 10 years imprisonment for 14 counts of money laundering. Since the sentences will run concurrently, he will serve an effective 15-year imprisonment. The Asset Forfeiture Unit (AFU) in KZN was not able to recover any of the money, as they found that Khumalo did not own any assets,” said Ms Ramkisson-Kara.

“Mkhize who pleaded guilty in December 2020, was sentenced to an effective 16-year imprisonment. The evidence in his case showed that Mkhize had a similar agreement to that of his agreement with Khumalo, and with other people. The Asset Forfeiture Unit of the NPA was able to secure an amount of about R200 000 from Mkhize’s bank account in addition to the sentence.”

Ms Ramkison-Kara said the NPA welcomes the sentence and conviction. She said it is indicative of the close collaboration between the NPA and the Directorate of Priority Crime Investigation (DPCI) in ensuring that those who transgress the law face the repercussions of their criminal actions. “The NPA and the DPCI remain committed to the fight against commercial crimes. In this matter, the DOA has indicated the impact these crimes have on the community,” said Ms Ramkisson-Kara.