SIU Freezes Assets in R16 Million UIF TERS Fraud Case, Targets COVID-19 Relief Abuse

The Special Investigating Unit (SIU) has secured a major legal victory in its ongoing crackdown on COVID-19 relief fraud, obtaining a Special Tribunal order to freeze assets linked to the unlawful receipt of over R16.3 million in Temporary Employer/Employee Relief Scheme (TERS) funds.

The preservation order targets assets belonging to Nhlakanipho Mngomezulu, director of Lubelo Hlomuka Holdings—trading as SA Scrum Assembly—following findings that the company fraudulently accessed funds intended to support workers affected by the pandemic.

Sophisticated fraud scheme uncovered

According to the SIU, the funds were obtained through a complex and coordinated fraud scheme involving "ghost employees", where fictitious workers were used to justify claims from the Unemployment Insurance Fund (UIF).

The UIF, administered by the Department of Employment and Labour, disbursed the funds between 2020 and 2022 as part of government's emergency response to the economic fallout of COVID-19.

However, investigators found no evidence that salaries were paid to legitimate employees, with funds instead diverted for personal use and allegedly laundered through multiple accounts.

"Analysis of bank records showed that SA Scrum Assembly received 45 payments from the UIF, with no corresponding salary disbursements," the SIU said.

Assets worth millions frozen

The Special Tribunal's interim order freezes a wide range of assets believed to have been acquired using misappropriated public funds.

These include:

Luxury and commercial vehicles:

• Volkswagen VN 750 Caravelle

• KIA K2700

• Toyota Avanza

• Ford Ranger

Immovable properties:

• Two properties in Glyndale, KwaZulu-Natal

• Four apartments in Pietermaritzburg

• One property in Zeekoe Vallei, eThekwini

Financial assets:

• Multiple bank accounts linked to Mngomezulu and SA Scrum Assembly

The order prohibits the sale, transfer, leasing, or disposal of these assets until the case is finalised.

Alleged personal enrichment and spending spree

Investigators allege that shortly after receiving the UIF payments, Mngomezulu embarked on a significant spending spree, purchasing vehicles in cash and investing in real estate.

The SIU further found that more than R5 million was transferred directly to Mngomezulu for personal benefit.

Funds were reportedly moved through various accounts in patterns consistent with money laundering, raising the seriousness of the case.

Legal process moves toward asset forfeiture

The SIU initially approached the Special Tribunal in November 2025, seeking preservation orders as a first step toward permanent forfeiture of the assets to the State.

Judge Margaret Victor, President of the Special Tribunal, granted the interim order, effectively securing the assets while legal proceedings continue.

If the SIU succeeds in its case, the frozen assets could be confiscated and returned to the state to recover losses suffered through the fraud.

Part of broader national anti-corruption drive

The investigation forms part of a wider mandate granted to the SIU under Presidential Proclamation R.8 of 2021, which authorised probes into irregularities in UIF TERS payments during the pandemic.

The TERS programme, which disbursed billions of rand to support workers and businesses, has been vulnerable to abuse, prompting multiple investigations into fraud and corruption.

Criminal prosecution may follow

While the SIU focuses on civil recovery of funds, it confirmed that any evidence of criminal conduct uncovered during the investigation will be referred to the National Prosecuting Authority (NPA).

This could lead to criminal charges, including fraud, theft, and money laundering, depending on the outcome of further investigations.

Protecting public funds and restoring trust

The SIU reiterated its commitment to holding individuals accountable and recovering funds intended for vulnerable workers during one of South Africa's most challenging economic periods.

"The SIU remains committed to recovering public funds meant for workers during the COVID-19 pandemic and ensuring that those who unlawfully benefited are held accountable," the unit said.

As investigations continue, the case highlights ongoing efforts to safeguard public resources and strengthen accountability mechanisms in the wake of large-scale emergency funding programmes.