Interventions to combat Fraud and Corruption
- On 14 January in the Wynberg Magistrates Court, Mr Frances Osei pleaded guilty to charges of diversion of second hand clothing (declared as destined for export to Malawi but in fact diverted to Johannesburg). He was sentenced to a fine of R10 000 or 6 months in prison, with half the sentence suspended for 5 years. His co-accused Mr Edward Lugard remains on trial.
- On 16 January in the Johannesburg Regional Court, Pebo Production CC, Mr Floyd Sibeko and Mr Bonginkosi Vilakazi pleaded guilty to statutory offences related to charges of theft (for VAT and PAYE returns submitted to SARS without payment – a total prejudice of R868 812). So far R75 000 had already been paid towards the debts. Sentencing was handed down on 21 January – both Mr Sibeko and Mr Vilakazi received 7 years imprisonment suspended for 5 years and must each repay R112 000 to SARS over a period of 5 years, along with a R10 000 fine or 12 months imprisonment each.
- On 17 January Mr David Davis was arrested in Welkom on charges of VAT fraud, having allegedly submitted false VAT returns to SARS causing a prejudice of over R4.3 million. He appeared in the Welkom Magistrate’s court and was released on R10 000 bail. The matter was postponed to 10 February 2014.
- On 21 January Mr EL Marienburg – an associate and co-accused of Ms Wendy Machanik – appeared in the Johannesburg Magistrate’s Court on charges of Income Tax fraud related to the wider Machanik case. The case was postponed to 14 May for trial.
- As has been widely reported, on 24 January Ms Linda Adams was sentenced in the Wynberg Magistrates Court, having been previously found guilty on 72 counts of fraud and 13 counts of theft. She was sentenced to 7 years imprisonment wholly suspended for 5 years, and an additional 6 months imprisonment also wholly suspended for a period of 5 years. In addition she was placed under correctional supervision for the maximum period of 36 months. She is further required to undergo community service of approximately 20 hours per month.
- On 27 January in the Johannesburg Regional Court, Zirdat Tobacco Distributors CC and Mariam Bibi Seedat appeared on charges related to the alleged forging of export documents in order to obtain undue VAT refunds from SARS. The actual prejudice in this matter was over R13 million. The matter has been postponed to 15 April for trial.
- As has already been reported, on 31 January the Gauteng North High Court confirmed a preservation order (initially obtained on 18 February 2013) on the assets of Mr Mark Krok, as the result of a request from the Australian Tax Authority. The order effectively secured all assets of Mr Krok to the value of R297 million for the collection of the outstanding tax debt of R249 million owed to the ATO. This action is the first mutual collection of taxes action between South Africa and Australia.
Illicit tobacco focus area
- On 12 January the SARS Customs team at the Groblersbrug border post with Botswana searched a vehicle entering the country. It was found to be carrying 18 125 cartons of illicit cigarettes (brands including Remington Gold, Pacific, Oxford, Dullah, Kingdom, Chelsea and Seville) with a value of just under R3.5 million. The driver was arrested by SAPS and the truck impounded.
- On 13 January SARS received a tip off regarding a truck in the North West that was carrying illicit cigarettes. It was found abandoned near the Medupi power station and taken to the nearest border post (Groblersbrug) where it was searched. The truck was found to be carrying 13 575 cartons of illicit cigarettes (Pacific Blue and Seville), with a value of almost R2.6 million.
- On 29 January the SARS Customs Tactical Enforcement team conducted a raid on a farm in Carletonville, having received a tip-off. On the premises they found a truck and trailer loaded with 30 large bags of crushed glass for export. When searched, the bags were found to be concealing significant amounts of illicit cigarettes. 243 master cases and 104 cartons of Shasha and Seville cigarettes, with an estimated value of almost R1.5 million were seized, the vehicles impounded and the farm owner was arrested by the SAPS.
- In total, SARS can report the seizure of 301 master cases and 48 474 cartons of illicit cigarettes (almost 13 million cigarettes), with a total value of over R10.6 million, for January 2014.
- Prevented just over 5.3 kilos of cocaine (valued at just over R1.5 million), just over 10.9kg ephedrine / crystal methamphetamine (valued at over R3.2 million), 1kg heroin (valued at just over R350 000) and 3kg ecstasy (valued at R305 000) from entering the country. In all cases, the drugs seized and the individuals involved were handed over to the SAPS for further action. The drugs were seized in a number of different interventions, and included:
a. 5 separate seizures of methamphetamine totalling almost 11kg and valued at over R3.2 million, all in parcels arriving in South Africa (Johannesburg and Cape Town) from India.b. 3kg ecstasy, valued at R305 000, in a courier parcel from Amsterdam to Johannesburgc. 1.735kg cocaine, valued at just under R500 000, concealed in cans of jam and beans in the luggage of a female passenger travelling from Sao Paulo to Lagos via Johannesburg.d. 1.2kg cocaine, valued at R346 000, concealed in pocket linings of jeans found in the luggage of a male passenger Travelling from Sao Paulo to Johannesburg via Dubai.e. 1kg cocaine, valued at R287 000, in a parcel from China destined for Port Elizabethf. 1kg heroin, valued at R350 000, in a parcel arriving in Johannesburg form Indiag. 900g cocaine, valued at R270 438, in the luggage of a female passenger arriving in Durban from Dubaih. 500g cocaine, valued at R143 500, concealed as abdominal bullets by a male passenger travelling from Sao Paulo to Kinshasa via Johannesburg.2. Seized a number of other items coming into the country, including:
a. Over 4400 “male sexual enhancement” tablets, valued at over R306 000.
3. Prevented the following from leaving the country:a. 13.4kg dagga, destined for the UK, valued at over R19 000. At the same time, SARS is pleased that as a result of cooperation with British police – having raised concerns about the significant amounts of dagga being sent to the UK – a number of people were arrested in the UK in this regard.b. 9 cellphones and 2 laptops, all suspected of being stolen.