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Tax fraudsters sentenced in high court

Tax fraudsters sentenced in high court

  • Case against SARS accomplice postponed for a further pre-trial.
Pretoria, 21 February 2020, Two Cape Town businesspersons were sentenced to 16 and 17 years respectively direct imprisonment in the Cape High Court earlier today. They were found guilty on 487 counts of VAT fraud and alternative charges such as racketeering, money laundering and corruption in terms of the Prevention of Organised Crime Act.
Mr Luis Filipe Duarte D’Almeida [Fernandes] from Melkbosstrand and Mr Nazmien Warner of Glenhaven, Bellville both pleaded guilty in terms of a plea bargain reached with the state following an in-depth investigation by the Criminal Investigation Unit of SARS in Cape Town.

Mr Fernandes pleaded guilty to 471 charges relating to racketeering, fraud as well as corruption and for corrupting a SARS official. He was sentenced to 158 years of imprisonment. With sentences running concurrently, he will spend 17 years in jail.

Mr Warner pleaded guilty to 409 charges, including to racketeering, fraud and corruption in terms of the POCA Act. He was sentenced to 136 years imprisonment. With sentences running concurrently, he will serve an effective 16 years jail sentence. Mr Warner will pay SARS R900 000 as well as the proceeds of the sale of nine properties.
The charges emanated from a R115 million VAT fraud scheme ran by Mr Fernandes and Mr Warner between 2008 and 2015.

During this time, they claimed fraudulent Value-Added Tax Returns amounting to R115 million with the use of fictitious invoices from non-existent businesses, misrepresenting to SARS that they purchased goods in South Africa and exported this to countries in Africa. Mr Fernandes and Mr Warner furthermore forged export documents as well as supplier invoices and handed this to SARS upon request for supporting documents. SARS was prejudiced by R111 million.

Fraud charges emanating from Mr Fernandes misrepresenting to his employees that the PAYE deducted from their remuneration was paid to SARS while the companies were never registered with SARS as employers, were also included in the indictment.

The accused admitted that they had enlisted the services of a SARS accountant to assist them with authorisation of refunds and get the refunds paid out fast. The case against the SARS employee has been postponed, although Messieurs Fernandes and Warner have agreed to testify against him.

According to the two accused they used the money to fund several failed business ventures, an internet gaming and social interaction website, low cost housing projects in Namibia and Cameroon, the importation and installation of revolving doors and a pre-paid fuel card.

They also used the money to maintain a high lifestyle, spending money on travel, motor vehicles, and luxuries.  Mr Warner also invested his share in properties.

Contrary to popular belief, tax crime is not victimless. By deliberately defrauding the tax system including claiming a refund one is not entitled to, one is stealing from the whole community and disadvantaging South Africans who do the right thing.

Today’s result demonstrates SARS’ commitment to detecting and prosecuting tax crimes and should serve as a warning to those who think they can flout the law and get away with it.

SARS Commissioner, Edward Kieswetter highlights that “Slowly the institutional rebuilding gains momentum, and whilst it is our strategic intent to make things easier for honest taxpayers, we are improving our capability to detect criminal and negligent taxpayer behavior to ensure they are successfully prosecuted”

If a taxpayer suspects or is aware of a SARS employee who is involved in tax fraud, they can report it confidentially at 0800 002 870.

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