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SARS still chasing stolen money

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 13 Jun 2013
Seven people accused of defrauding SARS of millions will go on trial later this year.
Seven people accused of defrauding SARS of millions will go on trial later this year.

The South African Revenue Service (SARS) is still after some money that was stolen from the taxman as far back as 2008, after a syndicate gained access to its systems with the help of a staff member and a consultant.

In addition, although five people have been convicted so far, the trial of another seven syndicate members has been set down for later this year.

The syndicate used access details to change the banking details on SARS' system, allowing it to divert money into its bank accounts, to the value of R77.7 million, through five transactions. In the initial stages of the probe, SARS was able to recover R26 million.

Another R4 million was recovered by the Asset Forfeiture Unit during the investigation, and the unit is in the process of recovering another R10 million. Efforts are also under way to recover the balance of the funds, which is likely to involve forfeiture of assets by the unit under the Proceeds of Organised Crime Act.

Infiltrators

The syndicate comprised Pakistani nationals and South African citizens, and it duplicated legitimate company names at what was then the Companies and Intellectual Property Office (Cipro). The syndicate then created new bank accounts and diverted five income tax refunds.

The affected companies:

  • 13 October 2008: SBC International Management Services Incorporated's refund of R31.6 million.
  • 29 December 2008: Sun Microsystems' R19.3 million refund was stolen.
  • 3 February 2009: Allpay Western Cape's R7.5 million refund was stolen, but recovered in full.
  • 12 March 2009: Boston Scientific's refund of R9.7 million was stolen and recovered in full.
  • 17 March 2009 Boston Scientific's refund of R9.7 million was stolen for the second time and recovered in full.

So far, several people have been convicted, says SARS, including ring-leader Fiza Naqvi, who was given a 10-year suspended sentence and is under witness protection. Samuel Gowe, who was employed by Gijima at the time, was also given a 10-year suspended sentence and is under witness protection.

A former SARS staff member, Audelia Makhubu, also received a 10-year suspended sentence, while Zahir Seedat, Ali Raza Naqvi and Maza Raza Syed are all serving eight years behind bars. Two syndicate members have since died, one murdered, apparently by the syndicate, while the other died in custody.

In April, seven people appeared in the Randburg regional court to have trial dates set down, which will run between 21 October and 19 November in three tranches. These co-accused include a Cipro staff member and one who was employed at the Department of Home Affairs.

SARS picked up the collusion in March 2009, when its warning system detected a refund that was paid into an individual's banking account.

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