R161 million taxpayer-funded UIF scandal in South Africa

The Special Investigating Unit (SIU), together with specialised South African Police Service (SAPS) units, is conducting a large-scale search and seizure operation across KwaZulu-Natal and Gauteng.

Conducted on 11 December 2025, it is part of its probe into a sophisticated syndicate accused of defrauding the Unemployment Insurance Fund (UIF) of roughly R161 million through the Covid-19 Temporary Employer/Employee Relief Scheme (TERS).

Significant corruption, fraud, and maladministration were identified within the UIF TERS, a fund established to provide financial relief during the COVID-19 pandemic.

Investigations by the SIU and the Auditor-General exposed substantial system weaknesses that allowed for widespread abuse. 

The operation is supported by the SAPS National Intervention Unit, the Directorate for Priority Crime Investigation (Hawks), and the Tactical Response Team. 

Warranted by the Special Tribunal, the raids target offices, residences, and the UIF Head Office in Pretoria, and focus on 16 companies and over 35 individuals allegedly central to the fraud.

According to the SIU, the syndicate allegedly submitted false TERS applications for individuals who were not employed by the applicant companies. 

Funds meant for workers were instead diverted among the syndicate members, with transactions indicating potential money laundering. 

The SIU said in a statement on Thursday that the companies and individuals targeted include:

• Nakomang Trading Enterprise (Gauteng): Received R19.1 million; searches underway in Johannesburg.
  
• Lubelo Hlomuka Holdings t/a SA Scrum Assembly (KZN/Gauteng): Received R15.9 million; director Nhlakanipho Mngomezulu identified as alleged syndicate mastermind. Locations raided include Pietermaritzburg, Durban, Sandton, and Fourways.
  
• Bokoharama Construction (KZN): Received R18.2 million; director Thamsanqa Madlala, a local councillor, is a key person of interest. Searches in Port Shepstone.
  
• Other companies under investigation include Aventador Gate (Pretoria) and several KwaZulu-Natal-based businesses.
  
• Individuals under scrutiny include Yolanda Nombuso Mgobo, Sphamandla Sokhela, Nhlakanipho Zondi, Senzo Gumede, Sboniso Ronald Cele, and Simtholile Dlamini, who are alleged to have facilitated or laundered syndicate funds.

Ongoing UIF investigation 

The SIU is also searching UIF’s Pretoria headquarters, probing officials suspected of enabling fraudulent applications or bypassing internal controls.

Seized documents, digital devices, and other evidence will undergo forensic analysis. 

The SIU intends to pursue civil action to recover state funds, and any evidence of criminal conduct will be referred to the National Prosecuting Authority.

This operation marks one of the largest coordinated raids in South Africa’s recent efforts to recover misappropriated TERS funds during the widespread Covid-19-related financial fraud.

Investigations revealed widespread UIF TERS fraud exploiting system weaknesses and poor database integration.

Key schemes included:

• Ghost employees – claims for non-existent, deceased, or imprisoned individuals;
• Double-dipping – beneficiaries already receiving other state aid;
• Employer fraud – funds retained or claimed after resuming operations;
• Invalid or duplicate ID usage; and
• Around 6,000 government employees fraudulently claiming benefits.

Internal UIF misconduct also emerged, with senior officials suspended and some implicated in soliciting bribes.