How state attorneys and private law firms defrauded R80bn in taxpayers’ money
Details emerge regarding state attorneys and private legal firms defrauding taxpayers.
A probe by the Special Investigating Unit (SIU) has shed light on elaborate scams by numerous state attorneys and private law firms who purposefully defrauded the government.
The scams, which have cost taxpayers over R80bn, consists of either losing cases against the state and then proceeding to receive a portion of the payout or settling claims out of court.
Reportedly, there are several criminal cases that have already been opened against certain private legal firms and state attorneys.
Private law firms health claims scam in the Eastern Cape
Allegedly, the Eastern Cape’s state attorney’s office has settled more cases than any other province. Particularly susceptible to the scam are health claims.
Justice minister, Michael Masutha, and minister of health, Aaron Motsoaledi, stated that dating back to 2013, the department of health had paid out R60bn in fraudulent malpractice claims.
A probe in the Eastern Cape of how 80% of claims against the health department, in one region, are represented by only five lawyers is underway. Cases were being dropped after the SIU descended upon one legal firm.
Masutha said that in certain cases, lawyers for the state filed court papers late to
“deliberately plunder the state’s case”. In other instances “the affected department knows nothing about [the case]”.
Another law firm, facing investigation in the Eastern Cape, has 28 cases, of R15.8m each, against the state. The total amounts to a startling R442.4m.
Minister of Health questions health claims in Limpopo
Motsoaledi shared that he recently undermined a R70m claim against the state, over a ‘botched circumcision’ in Limpopo.
Motsoaledi wondered what extent of medical damages could warrant such a sizeable amount:
“When my legal unit was asking for information, there was no co-operation. I then called the MEC and she knew nothing about it. I was shocked that there was a case of R70m and the MEC knew nothing about it.”
Together with an expert at Steve Biko Academic Hospital, in Pretoria, the file was closely examined and found that no circumcision took place. This guy had an illness and the hospital saved his life.
“I suspect that this would have been settled out of court and a minimum of R10m would be paid and the state attorney would regard it as a win,” said Motsoaledi.
The case has been handed over to the Hawks and the lawyer involved in the case is also being investigated.
Another case shows the health department being sued for R25m by a cerebral palsy patient born in Limpopo, 19 years ago.
A Steve Biko paediatric neurosurgeon took a closer look at the medical file and discovered that the patient didn’t have cerebral palsy. Officials also uncovered a driver’s licence application by the ‘victim’.
“We were going to pay for caretakers because they argued this guy couldn’t take care of himself. But actually, this person had no illness,” Motsoaledi said.
State attorneys and private law firms’ settlement cases being reviewed
Hundreds of cases, where the government agreed to settlements without really looking into the facts, are in need of investigation by the SIU.
“It is a network involving a number of offices… When we have meetings we constantly complain about the state attorney.”
Gauteng is another state suffering heavily from this scam. Motsoaledi said:
“Sometimes there are duplications. The cases are the same but the names are changed. There are so many. But you can’t say the state attorney is working by themselves. There are many people involved.”
An official shared that they already have a list of some of the biggest suspects:
“In some situations, officials earning under R20,000 a month are driving luxury vehicles. This investigation is going to be far bigger than planned.”
The official also disclosed that certain law firms were asked, by officials, to “play the game”. Although they initially declined, the firms have started providing information.
The Public Service Commission reported, in 2016, that the state attorney’s office suffered a 70% loss of its cases. Incompetence was believed to be the reason at the time, however, it may have been part of the scam.