KPMG fraudster cost auditor R16 million

A former KPMG employee’s case was delayed to 9 April 2024 after allegedly committing fraud against the audit firm that led to R16.5 million in losses.

“KPMG South Africa played an integral part in leading to the arrest of former employee Fidelis Moema following the firm identifying potential fraud committed against the firm,” said KPMG South Africa CEO Ignatius Sehoole.

This comes after Moema was dismissed as an employee of KPMG on 11 November 2022, following a stringent disciplinary process related to non-compliance with firm policies.

Moema was a bursary specialist at KPMG prior to his dismissal.

After his dismissal, KPMG identified potential fraud committed by Moema and immediately initiated an internal forensic investigation. 

This investigation uncovered fraudulent behaviour related to bursary funds, and as a result, KPMG reported the matter to the relevant law enforcement authorities in February 2023. 

“We continue to work closely with the authorities to bring this matter to a close,” Sehoole said.

“While KPMG had internal controls in place to mitigate such issues, the forensic investigation performed identified improvements, and additional measures of control have been implemented since discovery of this issue.”

SA News reported that Moema, who faces charges of theft, fraud, and money laundering, appeared at the Palm Ridge Commercial Crimes Court on 2 April 2024 after he handed himself over to the Hawks’ Serious Commercial Crimes Investigation team.

Following his appearance in court, his case was postponed to 9 April 2024 for formal bail application.

According to a statement from the South African Police Service (SAPS), Moema is accused of misdirecting funds intended for bursary recipients between 2021 and 2022.

“Instead of paying university fees on behalf of students, the accused would pay the money into the bank accounts belonging to friends and individuals who own companies. The money would then be paid back into his personal bank account,” police said in a statement.

As per the SAPS statement, Moema’s fraudulent actions led to the audit firm suffering a loss of R16.5 million. 

Sehoole said that, with regards to the bursaries, all monies misappropriated were through an elaborate scheme of fictitious accounts, over-riding of internal controls and deliberate collusion with external parties.

KPMG’s approved bursars have not been impacted, the firm has honoured all its commitments, and the bursary programme will continue to support students in enhancing the profession.

“The most disappointing aspect of this situation is the lost opportunity to assist additional students,” Sehoole said.

He said the forensic investigation identified collusion by Moema with external parties but did not identify others within KPMG involved in the scheme. 

“We have a team of highly skilled, ethical and professional people working in our firm, and this is not affected as a result of this case,” Sehoole said.

“I have stated recently that KPMG takes a zero-tolerance approach to unethical behaviour, and any person found to be involved in it will be dealt with.” 

“I remain firm in this endeavour, and as a firm, we continue to drive an agenda underpinned by ethics and accountability.”