The US Department of Justice (DOJ or Department) published a final rule on August 18, 2026 (Final Rule) formalizing the National Fraud Enforcement Division (Fraud Division) established in April 2026. Companies in the health care, government contracting, trade, and tax sectors should take note and scrutinize their compliance programs accordingly. The Fraud Division has grown rapidly, already wielding data-driven investigative tools and interagency partnerships, and has signaled that it will reward companies that self-disclose and cooperate while aggressively pursuing those that do not.
The Final Rule
Under the Final Rule, the Fraud Division has jurisdiction over the following broad range of fraud-related matters. Companies should understand the scope of the Fraud Division’s reach:
- Criminal fraud. Criminal fraud matters (other than antitrust cases involving conspiracy to defraud the…
THE TUTUKA POWER STATION PROCUREMENT FRAUD (ESKOM)
Date: August 29, 2025 Perpetrator: Jessie Phindile Kubheka (Supplier Director)
Case Description: As part of the ongoing “cleaning up” of Eskom, Jessie Phindile Kubheka was sentenced to 12 years (with 5 years suspended) for defrauding the Tutuka Power Station. The case involved a sophisticated procurement syndicate that exploited Eskom’s emergency repair protocols. Kubheka’s company was contracted to deliver three high-specification containers for the power station. Only one container was ever delivered, and even that single unit failed to meet the required safety and technical specifications.
Despite the lack of delivery, Kubheka issued grossly inflated invoices, defrauding the utility of approximately R2.6 million. The Middelburg Specialised Commercial Crimes Court ordered Kubheka to repay the full amount. This case is significant because it marks a shift in Eskom’s strategy toward “naming and shaming” suppliers and pursuing full asset recovery. It serves as a stark warning to contractors that the 2026 climate of “Zero Tolerance” for state-owned enterprise (SOE) fraud is backed by active judicial enforcement.
Link to Original: Eskom Official – Tutuka Fraud Sentencing