Former Johannesburg mayor Kabelo Gwamanda was arrested on Friday.
Gwamanda, 39, who is now the MMC for community development, was arrested in connection with an alleged funeral policy scam that he ran in Soweto in 2011.
According to the warrant of arrest, which the Sunday Times has seen, Gwamanda was arrested after a victim of his alleged scam opened a case with Protea Glen police.
Gwamanda is alleged to have conned unsuspecting Soweto residents in a scheme in which they made monthly payments for funeral insurance.
A Financial Sector Conduct Authority (FSCA) investigation last year revealed that Gwamanda — who is an Al Jama-ah councillor — operated the illegal business in 2012 and then disappeared when his clients came looking for their money.
The victim, who opened the case against Gwamanda in January, told the police that she took out a funeral policy with Gwamanda’s company, Ithemba Lama Afrika which was based in Soweto.
However, later when she tried to visit their offices, she found that the company had moved.
“She did her own investigation and found other victims. She was told that the two directors had committed suicide after failing to pay money back to investors,” reads the police report.
“Investors were under the impression that both directors had died, only to see one suspect appearing on TV as the mayor of Johannesburg.”
A warrant of arrest for Gwamanda was issued in May but he was out of the country, having travelled to Brazil. He promised to meet the investigation officer upon his return but he failed to do so.
“The investigating officer struggled to get hold of Kabelo on his phone and decided to profile him and trace his address ... and found his wife,” reads the internal police report.
Gwamanda handed himself over on Friday around 8am.
In June last year, Gwamanda confirmed to the Sunday Times that he did own a social business at some point in his life, which failed.
“I had taken ownership, I had presented myself to my clients and told them, 'This is where the business is, we have failed, so what do we do and what are your expectations from me?' And then [the matter] was closed.”
Gauteng police spokesperson Col Mavela Masondo had not responded to questions at the time of publication.
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