(VAT) fraud syndicate
17 February 2009
Another Value Added Tax (VAT) refund fraud scam was uncovered with the
arrest in Kimberley yesterday, 16 February 2009, of five Ivory Coast nationals
for their alleged in involvement in a syndicate.
It is alleged that the suspects, through at least fifty fictitious
businesses, claimed millions in fraudulent refunds from SARS. The arrest of the
five men follows a five month investigation by SARS, the Organised Crime Unit
of the South African Police Service (SAPS) and the National Prosecuting
Authority (NPA).
Members of the syndicate allegedly registered fictitious businesses as VAT
vendors with SARS with the sole purpose of claiming fraudulent refunds. When
investigators suspected irregularities and stopped refunds to these entities,
attempts were made to recruit and bribe SARS officials to authorise the pay-out
of these fraudulent refund claims.
At this stage of the investigation at least fifty entities are involved with
a total prejudice to SARS of R12,5 million. From documentation seized from the
suspects it is highly probable the number of entities involved as well as the
prejudice to SARS will increase.
The charges against the accused will include fraud, corruption and
racketeering. They will appear in the Kimberley Magistrate's Court on
Wednesday, 18 February for a bail hearing. SARS has recently significantly
tightened procedures around registration of entities as VAT vendors as a
measure to combat VAT refund fraud.
Issued by: South African Revenue Service
17 February 2009
Source: South African Revenue Service (http://www.sars.gov.za)
