South Africa’s Justice Minister Scrutinized Over VBS Loan Controversy

Judicial Training on Anti-Money Laundering and Asset Recovery Held in Windhoek

He further stressed the importance of capacity building, not merely as a means of acquiring new skills but as a necessity for staying ahead in an ever-evolving landscape of financial crime. The training, he remarked, would empower judges and magistrates to handle AML cases with the precision and understanding they demand, thereby ensuring that Namibia’s judiciary remains strong and capable.

 

“We are all too aware that AML crimes have far-reaching consequences, both locally and internationally. In Namibia, as in many parts of the world, we have seen a worrying rise in money laundering activities. These crimes not only 

undermine our financial systems but also facilitate other forms of criminal behaviour, such as terrorism financing, drug trafficking, and corruption,” the Deputy Chief Justice said.

 

He also expressed his deep appreciation for Justice Michael Hopmeier’s leadership in this training. Justice Hopmeier, a distinguished expert in economic crime, was praised for his extensive experience in handling complex AML cases and his contributions to the development of AML legal frameworks. The Deputy Chief Justice also extended his gratitude to Justice Orben Sibeya for his collaboration and commitment to enhancing the capacity of Namibia’s judiciary.

N$18m stolen from SME Bank paid to Mugabe’s pilot

A total of N$18,8 million stolen from SME Bank was transferred to and laundered by former Zimbabwean president Robert Mugabe’s pilot and confidant Robert Mhlanga.

This is according to court documents filed in South Africa’s Gauteng High Court by SME Bank’s liquidators Ian McLaren and David Bruni.

The liquidators said approximately N$20,8 million was transferred from SME Bank into the trust account of a Johannesburg law firm called Paul Casasola & Associates between 2014 and 2015.

The law firm is owned by Mhlanga’s then lawyer Paul Casasola, who kept N$2 million of the stolen funds.

“The balance of N$18,8 million was remitted to Mhlanga and/or the Liparm Entities and/or third parties (for the benefit of Mhlanga and/or the Liparm Entities) by Casasola as paymaster from the Casasola & Associates’ Trust Account on the instruction of Mhlanga and/or the Liparm Entities,” the liquidators said.

The Namibian has learnt that Mhlanga quickly settled with Namibian liquidators when they pursued him in South Africa.

Though he repaid the N$18,8 million, this case provided further insight into how politically connected individuals exploited a bank meant to support small businesses in Namibia.

Zimbabwean Enock Kamushinda, who was Mugabe’s former personal banker, is accused of being the mastermind behind the bank heist. Kamushinda ran the SME Bank when funds were transferred to Mhlanga.

Mhlanga’s ex-lawyer Casasola yesterday said no funds were transferred from SME Bank into their trust account.

They denied wrongdoing.

Mhlanga has been a person of interest in South Africa.

South Africa’s AmaBhungane Centre for Investigative Journalism reported in 2012 that Mhlanga, a retired air vice-marshall, was widely regarded as a close associate of Mugabe and a business representative of the Mugabe family.

“Mega-rich Zimbabwean businessman Robert Mhlanga stands at the centre of an opaque network of companies set up to cash in on the Marange diamond fields with the help of the Zimbabwe government,” Mail and Guardian reported.

AmaBhungane also reported that Mhlanga has been on a N$185-million property buying spree in South Africa’s prime areas such as Durban’s coast and Sandton in Johannesburg.

THE WASHING MACHINE

The liquidators presented a case in the Johannesburg court, demonstrating how the N$20 million paid to Mhlanga and Paul Casasola was a result of fraud and money laundering.

Some of the payments to Mhlanga were labelled ‘Goldkid’.

According to the liquidators, the first sum stolen from SME Bank was N$2 million, transferred on 1 August 2014 in seven smaller transactions to avoid detection by Namibian authorities.

The amounts ranged from N$245 000 to N$355 000 and were made as cash deposits.

These stolen funds were initially paid to a company called Transparency Business Solutions, laundered through Rustic Stone Trading, and then transferred into the Casasola and Associates Trust Account.

Additionally, a N$2,5-million electronic payment was allegedly laundered from SME Bank on 29 August 2014, followed by another N$3 million on 22 September.

These funds were routed through entities such as Technical Assignments (Pty) Ltd, Benoni Brokers CC, Transparency Business Solutions and Rustic Stone Trading, before ending up in the Casasola and Associates Trust Account.

This laundering process continued on multiple occasions until 19 November 2015, by which time at least N$20 million had been stolen from SME Bank.

The liquidators stated that SME Bank was the rightful owner of the stolen money, which was laundered through various entities acting as conduits before being transferred to the Casasola and Associates Trust Account.

“The defendants (Mhlanga and Casasola) received the money in a reckless manner, knowing that the money was not due to them,” the liquidators said.

“. . . As a result of Casasola’s wrongful and unlawful, as well as intentional or reckless and negligent conduct, SME Bank suffered liquidated damages of N$20 million.”

The liquidators added “the business of the Liparm Entitles was carried on recklessly by Mhlanga with the intent to defraud creditors and SME Bank for a fraudulent purpose.”

‘IT WASN’T ME’

According to court documents, Paul Casasola & Associates claim they didn’t know where the money came from, but they knew they received it on behalf of Mhlanga and his company, Liparm.

In February 2021, Casasola said they received the money on behalf of Mhlanga and Liparm Entities.

At the same enquiry, Mhlanga testified that “Casasola has over a period of time received hundreds of millions of rands on his behalf and would make payments to third parties on Mhlanga’s instruction”.

McLaren and Bruni said Casasola and Paul Cassasola & Associates failed to establish the identity of the person(s) from whom the monies were received.

They said this was in breach of South Africa’s Financial Intelligence Centre Act (Fica).

They said the lawyer and his law firm did not terminate the business relationship between them and Mhlanga.

“The agreement, arrangement or transaction had the effect of concealing or disguising the nature, source, location, disposition or movement of the money or enabling or assisting Mhlanga or Liparm Entities to remove or diminish the money that was acquired as a result of the commission of the theft and fraud on the SME Bank,” the liquidators said.

CASASOLA RESPONDS

Casasola yesterday told The Namibian they were not aware that the money was stolen from Namibia.

“Our offices were not aware, nor could have been reasonably aware or suspected that any of the funds transferred into our trust account originally emanated from SME Bank as payments were effected from South African banks in furtherance of commercial transactions,” he said.

The Namibian asked Casasola if the firm was aware of the possibility that the funds they were handling were the proceeds of criminal activity.

Casasola said he could not comment on the matter, since it is confidential.

“… save to reiterate that no funds were transferred from SME Bank to our trust account and the action instituted by the liquidators of SME Bank referred to in your electronic mail under reply was settled to the satisfaction of all parties,” he said.

The payments to Mhlanga, then the chairperson of a diamond company in Dubai, were made around the same time that Namib Desert Diamonds (Namdia) was secretly formed under president Hage Geingob’s Presidency and then mines minister Obeth Kandjoze.

The Namibian reported around that time that Namdia diamonds were sold for peanuts to Dubai.

Later on, it emerged that Tania Hangula, the former chairperson of Namdia, used to frequently fly to Dubai courtesy of SME Bank’s millions.

SME Bank also spent more than N$2 million on hotel accommodation and flights to fly Hangula around the globe between 2016 and 2017.

Most of the money was spent on fligts to Dubai.

At the time, Mhlanga was the chairperson of Mbada Diamonds and was appointed as a director of the Dubai Diamond Exchange.

The Namibian understands that authorities have looked at the link between Mhlanga’s SME Bank payments and Hangula’s trip to Dubai.

The Supreme Court of Namibia this year referred the looting of over N$247 million from SME Bank to the prosecutor general for further investigation.

“Quite how this systematic looting of a registered bank was able to proceed over such a sustained period raises questions concerning the efficacy of the regulation and supervision of SME Bank by [the Bank of Namibia],” judge Dave Smuts said.

'Hidden debts': PGR recovers assets worth 400 million dollars - AIM

The Mozambican Attorney-General’s Office (PGR) has recovered assets valued at about 400 million US dollars from those found guilty in the “hidden debts” trial that took place in Maputo in 2021-2022.

19 suspects were tried in the case that revolved around the illicit loans for over two billion US dollars obtained from the banks Credit Suisse and VTB of Russia by three fraudulent, security-related companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).

The scheme was cooked up by corrupt Mozambican officials, Credit Suisse bankers, and the Abu Dhabi based group, Privinvest.

Privinvest became the sole contractor for the three companies, and provided them with fishing boats, patrol vessels and other assets that were vastly over-invoiced. An independent audit of the companies put the over-invoicing at more than 700 million dollars.

Although the three companies were run by the Mozambican Security Service, SISE, and had no business track record, the banks handed over the two billion dollars requested. This was largely because the Mozambican government of the time, under the then President Armando Guebuza, guaranteed 100 per cent of the loans.

The loan guarantees were signed by Guebuza’s Finance Minister, Manuel Chang, who is currently on trial in New York for conspiracy to commit money laundering, wire fraud and securities fraud. The guarantees were illegal since they smashed through the ceiling on loan guarantees, set in the Mozambican budget laws of 2013 and 2014.

Predictably the three companies went bankrupt, leaving the Mozambican state liable to repay the loans. Thus hidden loans were transformed into hidden debts.

In the Maputo trial, those found guilty included the head of SISE, Gregorio Leao, his deputy Antonio Carlos do Rosario, who was the chairperson of all three fraudulent companies, and Ndambi Guebuza, the oldest son of the president, who was accused of taking bribes of 33 million dollars from Privinvest.

According to a report in the Maputo Sunday paper “Domingo”, the assets recovered by the PGR, from 11 of the accused, are mainly buildings and luxury vehicles.

The buildings that revert to the state include residences, warehouses and hotels. Some of these are now being used to accommodate State institutions that do not have premises of their own

Some of the seized vehicles, described as “top of the range” have also been distributed among state bodies. But luxury vehicles unsuitable for state use remain parked awaiting a future decision on their fate.

The money from the loans to Proindicus, Ematum and MAM was sent, not to Mozambique, but directly to Privinvest, and the Mozambican authorities still hope to recover it.

That depends on the outcome of a trial in London, where the Mozambican state is suing Privinvest for 3.1 billion dollars. The judge in the London case, Robin Knowles, had initially promised a verdict by last Monday, but then postponed it by a week.

The PGR source cited by “Domingo” said the London case has so far cost the Mozambican state between 200 and 300 million dollars. These legal costs can be retrieved – but only if the court finds in Mozambique’s favour.

Zacc recovers 350 corruptly imported vehicles

THE Zimbabwe Anti-Corruption Commission (ZACC) has recovered more than 350 vehicles that were illegally imported through the abuse of the civil servants’ vehicle rebate scheme that allows established civil servants to import vehicles duty-free. 

Yesterday, the steering committee of the National Anti-Corruption Strategy met to review progress of the past four years by its sub-committees. 

The meeting was attended by top Government and State officials, including Minister of Foreign Affairs and International Trade Ambassador Frederick Shava, Deputy Minister of Justice, Legal and Parliamentary Affairs Nobert Mazungunye and Prosecutor-General Justice Loice Matanda-Moyo.

Addressing stakeholders, ZACC chairperson Michael Reza said joint investigations into the abuse of the tax rebates extended to civil servants had yielded positive results. 

“There was inter-agency collaboration, which saw ZACC, the Zimbabwe Republic Police, and the Zimbabwe Revenue Authority combining efforts in the fight against corruption,” Mr Reza said.

“This resulted in the recovery of hundreds of vehicles that had been illegally imported into the country through abuse of the civil servants vehicle rebate scheme. Over 350 vehicles have been recovered since the start of the operation to date.”

Investigations were still ongoing and ZACC expected to recover more vehicles.

The civil servants motor vehicle rebate scheme was introduced by the Government as an incentive for civil servants with 10 or more years of service, allowing them to import a motor vehicle duty-free. 

However, beneficiaries are not allowed to sell, offer, or display their vehicles for sale, lease, or hire within five years of import without prior written permission from Zimra. 

Despite these conditions, it was discovered that many car dealers in Harare have been exploiting the scheme by conniving with civil servants who are not using the scheme and then using their names to import a vehicle duty free.

As part of fighting corruption, Mr Reza also revealed the commission was able to recover assets and proceeds of corruption and compensated for damages inflicted on the state and corruption victims. 

But there was a need to continue identifying legal gaps to ensure that the process of preservation and management of assets was in line with global standards.

Foreign Affairs Minister Ambassador Shava said all anti-graft agencies had to use the diplomatic channel when asking for legal assistance from foreign countries.

“It is unfortunate that sometimes agencies such as ZACC, NPA, and ZRP transmit their requests for legal assistance abroad without also using the diplomatic channels at their disposal,” he said. 

“I want to assure you all that my Ministry stands ready to timeously and effectively assist in combating corruption using diplomatic channels. 

“Also, a benefit of roping us in is that our embassies abroad are then in a position to make the necessary follow-ups when cases are stuck in webs of bureaucracy.”

Prosecutor-General Matanda-Moyo said: “We are currently developing memoranda of understanding with countries to expedite mutual legal assistance. 

“Also, as members of the International Prosecutors Association, Africa Prosecutors Association, and SADC Prosecutors Association, we are leveraging these forums to foster understanding among countries and streamline the process of mutual legal assistance.”

President Mnangagwa officially launched the National Anti-Corruption Strategy in July 2020, aiming to foster consensus and ownership in the fight against corruption.

This comprehensive strategy serves as a collective declaration against corruption in all its forms, underscoring a steadfast commitment to an ethical and accountable government, as well as transparent governance in both the business and civil society sectors.

Looting of Covid-19 funds: R52 million in assets including houses and vehicles seized by State agents

Mozambique: Corruption cost state €5.8 million in the first half of 2024

According to figures from the Central Office for Combating Corruption (GCCC), the Mozambican state suffered losses of around 405 million meticais (€5.8 million) due to corruption offences in the first half of this year.

The figure is an increase on the same period in 2023, when losses totalling 183.3 million meticais (€2.6 million) were recorded, according to the GCCC, an agency of the Mozambican Public Prosecutor’s Office.

In the first six months of this year, the Mozambican authorities seized assets valued at €589,000 resulting from acts of corruption.

The assets are the result of 705 criminal cases brought in relation to crimes of abuse of office, embezzlement and simulation of competences, according to the GCCC’s balance sheet for the first half of the year.

According to the Public Prosecutor’s Office, in the first six months of the year, the Mozambican state seized 277,617.09 meticais (€4,000), which “were deposited in the Single Treasury Account”.

In the same period, the document from the Mozambican Public Prosecutor’s Office indicates that four properties valued at 39,182,142 meticais (€566,000) and a Hyundai Santa Fé car valued at 1,350,000 meticais (€19,000) were seized.

The GCCC also indicates that in the first half of the year 705 cases were opened, in addition to the 623 that were carried over from last year, totalling 1,328, which represents a reduction of 46.

On 17 June, Lusa reported that Mozambique had recovered more than 2,905 billion meticais (€42.5 million) in 11,000 cases against corruption, terrorist financing and money laundering over the last ten years.

“As proceeds and/or advantages of the illicit activities investigated,” explained the deputy director of the Central Office for Combating Corruption (GCCC), Eduardo Sumana, at the time.

He also said that in the last ten years, the Mozambican Public Prosecutor’s Office has processed 11,030 cases in this area, of which 10,403 have been resolved, corresponding to 94%, and 83 vehicles have also been seized and 56 properties recovered.

The Central Asset Recovery Office in Mozambique recovered more than 1.385 billion meticais (€20.2 million) from illicit sources in the last 12 months alone, in a total of 84 asset and financial investigation cases, according to data from the Public Prosecutor’s Office previously reported by Lusa.

The figure represents an increase compared to the previous period, when an estimated 1,149 million meticais (almost €17 million) worth of assets were recovered, reads a document that takes stock of the work of the Mozambican Public Prosecutor’s Office.

South Africa’s money laundering watchdog names and shames

Money laundering cases too slow- CJ

NATIONAL BUDGET TO GAIN MILLIONS FROM FORFEITED ASSETS

By NOKUNCEDA MAGAGULA | June 18 2024, Eswatini Obsever

The national budget is anticipated to receive a significant boost as assets forfeited by the state from money laundering activities will be injected into the national budget.

In the financial year 2022/23, the ministry of finance’s second quarter performance report revealed that potential money laundered in the country and seized by the State during the quarter under review was valued at E990 million.

The move to inject forfeited assets into the national budget was announced by the United Nations Office on Drugs and the United Nations Office (UNODC) Mariana Dias, during the National InterAgency Coordination workshop, addressing Money Laundering, Terrorist Financing and Assets Recovery.

Although Dias could not divulge the exact amount injected in the 2023\2024 national budget, she mentioned that the funds injected into the national budget were used to empower Eswatini communities.

 “As more assets are recovered or forfeited by the State, more assets are made available to be re-injected into the national budget for the benefit of local communities,” Dias said. She stated that they would like to encourage the continuation of efforts by the government of Eswatini to recover and manage the proceeds of crime.  She said the inter-agency model adopted by Eswatini whereby institutions make efforts to jointly participate in this process would ultimately benefit the members of society and ensure the availability of extra budgetary funding for development initiatives.

 The UNODC representative said Eswatini distinguished itself as a leader in fighting crime in the region.

collaboration

“It is therefore encouraging and indeed an honour to be able to work with you today as you strengthen your inter-agency collaboration in financial crime,” she stated.

She said as a partner in combatting trans-national organised crime, the United Nations (UN) provides assistance to governments in the implementation of various treaties such as the United Nations Convention against Transnational Organised Crime, and the United Nations Convention against Corruption (UNCAC).

“Both of these conventions combat illicit financial flows and encourage member States, such as eswatini, to strengthen the forfeiture of proceeds of crime through their money laundering and asset recovery provisions, amongst others,” she stated.

Dias said when the global community adopted the Sustainable Development Goals in 2015, it recognised that hundreds of millions of people around the world continued to live under highly precarious circumstances such as limited access to healthcare, education, poverty and hunger, unemployment and inequalities.  She said in as much as the SDG Framework provided them with a potentially transformative agenda to provide long-lasting responses to these multi-dimensional challenges facing the world, there was equally a strong recognition that an important pre-requisite for implementing the SDGs was building of strong institutions to foster more resilient states and societies.

Dias said therefore, the UNODC view was that the collaboration by different national institutions was a key element of building strong institutions which would ultimately contribute towards sustainable development.

“In this regard, proceeds of crime have a direct impact on efforts to meet the Sustainable Development Goals, particularly the implementation of target 16.4 that calls on member States to significantly reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organised crime by 2030,” she said.