Hawks to take over alleged RAF fraud investigations 

22 September 2015

The DA can today announce that the Hawks will take over fraud investigations into alleged fraudulent acts committed by staff of the Road Accident fund (RAF).

This follows months of uncertainty – with the cases having been transferred to no less than 12 different SAPS investigating officers since April this year – and is heartily welcomed by the DA. 

In April 2015, the DA laid criminal charges against the CEO of the RAF, Dr Eugene Watson and the RAF Board after coming into possession of evidence which documented large-scale fraud which was allegedly taking place at the RAF.

The evidence illustrated how the RAF essentially appears to sue itself in order to maintain a certain cash flow. This was done without the knowledge, instruction or consent of road accident victims and resulted in delays to their claims. 

It also caused huge additional costs to the RAF and led to inflated legal expenses to the fund.

Documents in our possession demonstrated that there was fraud and injustice taking place at the highest level at the RAF as well as serious breaches of the RAF Act.

The DA laid criminal charges against Dr Watson, on behalf of all road accident victims who were still awaiting their payouts and who were unaware of their illegal implication in cases presented in court without their knowledge.

Since then, additional incriminating information has come to light, including that the RAF has made use of selected legal firms to represent clients who have no knowledge of this. The body of evidence increased greatly as a result of the DA helpline which was set up following a flood of calls.

Evidence in the DA’s possession - and presented to the Hawks - shows that Dr Watson requested a confidential internal audit to establish just how many fraud cases occurred in the RAF. This report, leaked to the DA, found that there were 2098 similar cases and indicates just how prolific corruption at the RAF has become.

Dr Watson and the Chairman of the Board, Dr. Ntuthuko Bhengu, repeatedly publically denied the occurrence of such practices at the RAF and stated that any such cases were isolated incidents. 

This evidence also confirms that claimants were unaware that staff of the RAF had instructed their own attorneys to issue summons against the RAF to interrupt prescription. This effectively meant that claims were settled to the fraudulent benefit of RAF staff at the expense of claimants. The scope of this secret internal enquiry was limited to two financial years and amounts to a staggering R6 million. 

The unnecessary legal costs incurred amounted to millions of Rand of which a substantial amount was spent with three specific RAF-contracted attorneys. A further document –handed to the Hawks reveals that the Board under Bhengu’s chairmanship approved a “2015/2016 RAF Direct Claims Strategy”-policy on 31 March 2015 – despite repeated announcements of no such “thing” nor common knowledge of the deliberate action – let alone standard practice.

Although the RAF Board denied condoning prescription, it instructed attorneys to sue itself to interrupt prescription causing up to millions of rands of taxpayers’ money to be lost in fruitless and wasteful expenditure.

The scope of this top-secret internal audit only covered two financial years and can conservatively run up to thousands more. At an average of R 136 000 per claim – the cost in taxpayers’ money may be as much as R10 Billion (150 000 cases).

This led to an improved affidavit and addendums which were presented to the Hawks during the past week. 

The DA will continue with its helpline and encourages any claimants who have problems with the RAF to contact us on:

087 233 9188 or [email protected]

The DA has repeatedly called on Transport Minister Dipuo Peters to look into the allegations against the RAF which has, as its mandate, to compensate and assist applicants who are victims of road accidents – not to line the pockets of a few.

She has failed to do this. If the Minister cannot do her job of protecting the interests of the people of South Africa, she should resign in favour of somebody who can. 

Statement issued by Chris Hunsinger MP, DA Deputy Shadow Minister of Transport, 22 September 2015