A Special Investigating Unit (SIU) investigation has uncovered an alleged R58 million fraudulent land-transfer scheme in Ekurhuleni, involving 208 municipal stands in Villa Liza that were transferred into private hands without the required municipal authority. The investigation examined the transfer of 221 vacant stands between 2018 and 2022.
What makes the case particularly significant for the legal profession is the alleged use of fraudulent conveyancing documentation, forged rates clearance certificates and fabricated powers of attorney to facilitate the registrations at the Johannesburg Deeds Office.
According to the SIU, a conveyancing firm that was not on the municipality’s panel of approved attorneys was involved in lodging the transfer documents. The investigation further alleges that the conveyancer and his spouse personally benefited from 73 of the properties, which were acquired through trusts and an investment company.
The financial figures are striking. The stands were reportedly sold for around R18,000 each, despite municipal valuations ranging from R80,000 to R3.7 million. Some were subsequently resold for an average of approximately R250,000.
The SIU says there is currently no evidence that Deeds Office officials or municipal officials participated in the scheme, although the matter has been referred to the National Prosecuting Authority for possible criminal prosecution.
The consequences could extend well beyond criminal proceedings. The conveyancing firm has been referred to the Legal Practice Council, while referrals have also been made to SARS concerning possible tax irregularities and to the Financial Intelligence Centre over alleged non-compliance with FICA requirements. The SIU says it has made 147 FIC referrals relating to the conveyancing transactions.
The SIU has also obtained an interim interdict preventing the registered owners or occupants from selling, transferring, leasing, developing or otherwise dealing with the affected properties. It intends approaching the Special Tribunal to have the unlawful transfers reviewed and set aside and to recover losses suffered by the municipality.
For lawyers, conveyancers and compliance professionals, the case raises some uncomfortable questions about verification, due diligence, FICA compliance, document authentication and the safeguards surrounding the transfer of public property.
The full SIU findings contain considerably more detail about how the alleged scheme operated, the properties involved and the action now being taken.
Read more at AllAfrica….
R58 million Ekurhuleni land fraud investigation – AllAfrica
