Statement by the South Africa Revenue Services, enforcement and customs operations for June 2014
17 July 2014
Posted by: Author: SARS
The South African Revenue Service (SARS) is providing an update to the media and the public on its operations to combat crimes such as smuggling, fraud and abuse of the tax system for the month of June 2014.
The aim is to inform the public about the work SARS’ Customs and Enforcement teams do on a daily basis, to provide an indication of the prevalence of tax and customs-related offences in South Africa, and to illustrate the support SARS provides to other law enforcement agencies.
Interventions to combat Fraud and Corruption
SARS will combat any form of corruption, fraud and abuse of the tax system. The following cases can be reported for June 2014:
1. On 2 June in the Wynberg Magistrate’s Court, Mr Vincent Luvhimbi pleaded guilty to 12 counts of fraud. He had posed as a tax advisor, submitting fraudulent tax returns on behalf of 12 taxpayers, and charging 30% of the refund amount for the service rendered. The total prejudice to the fiscus was over R80 000. He was sentenced to 3 years direct imprisonment suspended for 5 years. He must also repay R20 000 (the total amount of "commission” he charged) to SARS. The remainder of the fraudulent refunds will be recovered from the taxpayers in question
2. Mr Lucky Mavimbela appeared in the Modimolle Magistrate Court on 6 June 2014 to be sentenced on charges related to the smuggling of illicit cigarettes from Zimbabwe into South Africa. He was found in possession of various brands of illicit cigarettes (with a value of almost R3 million) hidden in a secret compartment of the truck he was driving. Mr Mavimbela was sentenced to five years direct imprisonment.
3. On 5 June 2014, Horwitz Incorporated pleaded guilty to 95 counts of non-payment of PAYE and VAT in the Johannesburg Regional Court. The company had submitted tax returns to SARS without making the necessary payments. The accused had paid the full amounts due (over R570 000) back to SARS earlier in the month.
4. On 10 June, Mr Anthony Brian Lansdell pleaded guilty to 137 counts of fraud, 424 counts of theft and 92 contraventions of the Value Added Tax Act, committed over a four year period between March 2006 and May 2010. The total amount involved (both in losses to SARS and losses to his employers at the time) was over R50 million. He was sentenced to 20 years imprisonment, of which 10 years are suspended for 5 years.
5. On 13 June 2014, Lucille Elizabeth Borril was found guilty on 37 counts of tax fraud in the Johannesburg Regional Court. Ms Borril was a registered Tax Practitioner who was offering her services to the taxpayers within the diamond industry, and fraudulently claimed VAT refunds for her clients which she then appropriated. She also defrauded her clients of monies she claimed were due to SARS but which were in fact deposited into her own account. The total amount involved was over R11.6 million. She was sentenced to 10 years direct imprisonment, and found to be unfit to possess a firearm.
6. As has been previously reported, on 23 June, a tax fraud syndicate (18 individuals) appeared in the Gauteng North High Court for sentencing, having been found guilty in 2013 on 2265 charges including fraud, racketeering and money laundering. The syndicate had stolen the ID details of job seekers to submit false income tax returns over a five-year period to generate refunds amounting to more than R11million which they pocketed. The syndicate had attempted to defraud SARS of more than R25 million. The syndicate had offered jobs to unemployed people in return for copies of their ID books. These individuals were then "registered” for tax by the syndicate, and fraudulent IRP5 certificates produced, indicating that their "employers” had deducted excessive tax from their salaries. This resulted in fraudulent tax "refunds” being paid out. The syndicate members received jail terms of between 5 and 17 years.
7. On 27 June 2014, Mr Aboubacar Conte pleaded guilty in the Johannesburg Regional Court to 5 counts of VAT fraud. He had registered an entity with the intention of claiming false VAT refunds, amounting to over R110 000. He was sentenced to 4 years imprisonment, suspended for 5 years, and must also repay the full amount involved to SARS.
In the period from 1 to 30 June 2014, SARS Customs and Enforcement teams have:
1. Prevented just over 70kg kilos of cocaine (valued at over R20 million), over 16kg ephedrine / crystal methamphetamine (valued at over R4.8 million), and just over 4kg heroin (valued at over R820 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. Over 38kg cocaine, valued at over R10.9 million, concealed in a truck crossing into South Africa at the Kopfontein border post with Botswana. The drugs were in 18 packages that had been hidden in a number of compartments where tools would normally be stored
b. Just over 10kg cocaine, valued at over R2.9 million, found in the luggage of a male passenger travelling from Sao Paulo to Lagos via Johannesburg. The drugs were concealed in electrical components carried in his check-in lugagge.
c. 10kg cocaine, valued at over R2.8 million, found in the luggage of a male passenger travelling from Sao Paulo to Lagos via Johannesburg. The drugs were concealed in tubes of silicone carried in his luggage.
d. 9.2kg methamphetamine, valued at over R2.7 million, found in unclaimed luggage from a flight arriving in Johannesburg from Mumbai.
e. 5kg cocaine, valued at over R1.4 million, found in the luggage of a male passenger travelling from Sao Paulo to Lagos via Johannesburg. The drugs were concealed in electrical components in his luggage.
f. Just over 4kg cocaine, valued at over R1.1 million, found in the luggage of a male passenger travelling from Sao Paulo to Brazzaville via Johannesburg. The drugs were concealed in the lining of ladies handbags.
g. 3kg methamphetamine, valued at R900 000, concealed in a wooden sculpture sent from India to South Africa.
h. Just over 2kg cocaine, valued at over R580 000, being carried by a female passenger arriving in Johannesburg from Sao Paulo. The drugs were concealed in her underwear.
i. 2kg heroin, valued at over R400 000, in a parcel sent from India to South Africa.
2. Seized a number of other items coming into the country, including
a. 2677 Master Cases and 1108 cartons of illicit cigarettes (almost 27 million individual cigarettes), valued at just over R21.3 million, with the brands seized including Shasha, Pall Mall, Kingdom and Seville. The seizures included:
i. 1200 Master Cases of Shasha cigarettes, valued at over R7.2 million, found hidden on a farm in the Zeerust area.
ii. As previously reported, 900 Master Cases of Kingdom cigarettes, valued at over R8.9 million, concealed in a truck entering South Africa at the Beit Bridge border post.
iii. 262 Master Cases of Seville cigarettes, valued at over R2.6 million, found on the banks of the Limpopo river during a joing patrol with the SANDF
3. Prevented a number of items from leaving the country, including:
a. 8kg ivory, valued at over R170 000, in a courier parcel destined for China. SARS Detector Dog "Mimmo”, who is trained specifically for endangered species, made the initial identification.
b. Over 500kg dried abalone, valued at over R1.9 million, being shipped in 27 pieces from Johannesburg to China. The shipment was [picked up in the cargo warehouse by SARS Detector Dog "Mimmo
c. As previously reported, 8kg rhino horn, valued at just over R5.8 million. The pieces of horn were hidden in an electric stove held at a freight distribution warehouse, en route from Johannesburg to Vietnam. When the stove was dismantled, a fibreglass mould was found inside the stove. When the mould was drilled into, SARS Detector Dog "Mimmo” reacted to a substance inside. 7 pieces of rhino horn were found.
d. 200g heroin, valued at over R40 000, in a parcel from Johannesburg to France. The drugs were hidden in the soles of women’s sandals