Whistleblower Exposes Deep Corruption And Fraud At Road Accident Fund

The Road Accident Fund (RAF) has been rocked by explosive revelations of large-scale corruption, fraud, and gross financial mismanagement.

According to a whistleblower, the state entity has been haemorrhaging billions through duplicate payments, preferential treatment of select law firms, and even payouts to deceased claimants.

Former acting chief investment officer Sefotle Modiba, who left the RAF in June this year, made the allegations in a damning affidavit submitted to Parliament’s Standing Committee on Public Accounts (SCOPA).

He described the fund as “days away from financial collapse” when he joined in May 2020.

“When I joined, I was presented with a ‘day zero’ liquidity scenario indicating RAF would not operate beyond December 2020. There were no quality assurance processes, no reconciliations and a complete absence of financial controls,” Modiba testified.

He said the RAF’s financial systems were so broken that the organisation had lost track of payments and failed to detect massive fraud within its operations.

Whistleblower: Fraudulent Claims, Ghost Patients and Dodgy Law Firms

One of the most shocking revelations was that the RAF’s claims verification system had been disabled since 2016, making it impossible to identify duplicate or fraudulent payments.

This loophole, Modiba revealed, resulted in R1.2 billion being paid out on claims that had already been settled.

He alleged that investigators uncovered cases where claims were finalised without verifying the identities of accident victims, leading to payouts linked to falsified identity numbers and ghost claimants.

“There were signs of internal collusion between RAF employees and external stakeholders, including attorneys and medical providers,” Modiba said.

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Modiba further accused the RAF of maintaining a secret list of preferred law firms prioritised for payment under a scheme called fixed allocations.

He said that in July 2020, around R3.6 billion in fuel levy receipts was channelled to a few firms—while thousands of other claimants and attorneys were left waiting for months or even years.

He also highlighted a worrying trend of invalid writs of execution issued by certain law firms and sheriffs for already-settled payments. In one case, R1.79 million was paid to Sunshine Hospital on 18 June 2021, yet a writ for the same amount was served nine months later.

“There were unlawful attempts to seize RAF assets. Sheriffs attached the RAF’s movable assets and even threatened removal despite proof of payment,” Modiba added.

Allegations of Overbilling and Bribery Networks

Modiba exposed further misconduct involving medical overbilling and fraudulent hospital practices. He cited the now-collapsed Sunshine Hospital in Actonville for charging for pre-existing conditions, duplicating theatre codes, and billing for equipment already covered under ward fees.

Patients, he said, were often transferred from Limpopo, Mpumalanga, and North West to Gauteng without medical justification and kept in costly high-care units unnecessarily.

“Patients were overtreated and overcharged. Some developed bedsores due to negligence, while others received therapies that were medically contraindicated,” Modiba stated.

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He also alleged that bribery syndicates operated within the RAF, with staff accepting payments via retail money market counters to prioritise certain claims. “The corruption was deeply entrenched. There was clear evidence of organised fraud involving staff, law firms and service providers,” he said.

Despite these red flags being raised with previous management, Modiba said no action was taken until he referred the cases to the Special Investigating Unit (SIU). Modiba, who is currently suspended, has urged accountability across all levels of the organisation.

The inquiry, chaired by Songezo Zibi, is probing allegations of maladministration, financial misconduct, and reckless spending at the RAF.

On Wednesday, RAF security manager Stephen Msiza is expected to testify on the procurement of bodyguards for former CEO Collins Letsoalo, which allegedly exceeded the R480,000 limit approved by the RAF board.

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