Former municipal employee jailed for R1.4 million fraud

Thabo Mosupa, 45, and The Seven One Stop (Pty) Ltd appeared before the Bethlehem Commercial Crimes Court for sentencing after being convicted on multiple counts of fraud and money laundering.

The court sentenced Mosupa to an effective five years’ imprisonment. His company received a R700,000 fine, but the entire fine was suspended for five years.

How the Compensation Fund payment was redirected

The case relates to a payment made by the municipality in 2017 under the Compensation for Occupational Injuries and Diseases Act, commonly known as COIDA.

The payment, worth more than R1.4 million, was initially deposited into a Nedbank account. The transaction was returned after the account was found to be invalid.

The municipality then transferred the funds to an FNB account that officials believed belonged to COIDA. The money, however, did not reach the Employment and Labour Department.

The department later told the municipality that it had not received the payment and supplied the correct banking details. Those details were for an Absa account.

The discrepancy led the municipality to launch an internal investigation into what had happened to the funds.

Hawks traced the account to Mosupa’s company

A criminal case was opened and referred to the Hawks’ Serious Commercial Crime Investigation unit in Bethlehem.

The investigation found that the FNB account into which the money had been paid was linked to The Seven One Stop (Pty) Ltd, a company owned by Mosupa.

That finding formed part of the case that resulted in Mosupa and the company being convicted on the fraud and money-laundering charges. Mosupa was arrested and appeared before the Bethlehem Commercial Crimes Court on several occasions before his conviction.

“The municipality thereafter transferred the funds to an FNB account, which was believed to belong to COIDA,” Hawks spokesperson Warrant Officer Fikiswa Matoti said.

Prison sentence and suspended company fine

Mosupa’s effective five-year prison sentence applies to the fraud and money-laundering convictions. The sentence brings the criminal proceedings against him to the sentencing stage after the earlier conviction.

The company’s R700,000 fine was suspended for five years. The suspension is conditional: The Seven One Stop may not be convicted of fraud or theft committed during that period.

A suspended fine does not remove the condition attached to the order. If the company is convicted of the specified offences during the five-year period, the suspension may become relevant to the court’s enforcement of the sentence.

Why the case matters

The case highlights the importance of verifying banking details when public money is transferred, particularly when an initial payment fails and replacement account information is used.

It also shows how an internal review can lead to a criminal investigation when the intended recipient does not receive funds and the payment is later traced to an account connected to a private company.

Payments made under COIDA relate to a statutory compensation system. When money intended for that purpose is diverted, the issue is not limited to an administrative error: investigators must establish how the payment was processed, who controlled the receiving account and whether criminal conduct occurred.

In this matter, the Hawks investigation connected the receiving FNB account to Mosupa’s company. The court’s sentence followed the convictions of both Mosupa and The Seven One Stop (Pty) Ltd on the related charges.

The outcome

• Thabo Mosupa: Five years’ effective imprisonment for fraud and money laundering.
• The Seven One Stop (Pty) Ltd: R700,000 fine, wholly suspended for five years.
• Suspension condition: The company must not be convicted of fraud or theft during the five-year period.

The case began with a failed bank transfer and a payment sent to an account believed to belong to the Compensation Fund. It ended with a conviction, a prison sentence for the former municipal employee and a conditional financial penalty for the company linked to the account that received the money.