Stiff sentences for Cape Town businessmen over R115m fraudulent tax returns

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Cape Town – Two Cape Town businessmen have been sentenced to prison after being found guilty on 487 counts of VAT fraud, racketeering, money laundering and corruption. The SA Revenue Service (Sars) said Melkbosstrand resident Luis D’Almeida Fernandes and Nazmien Warner from Glenhaven, Bellville, both entered a plea bargain following an investigation by the Criminal Investigation Unit. They were sentenced to 16 and 17 years respectively. According to Sars, the two had between 2008 and 2015 claimed R115 million in fraudulent VAT returns. They had used fictitious invoices from non-existent businesses, misrepresenting to Sars that they purchased goods in South Africa and exported them to countries in Africa. They also forged export documents and supplier invoices, Sars said, as it was prejudiced R111m.

Fraud charges emanating from 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 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 Fernandes and Warner have agreed to testify against him,” Sars said.

“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 said.

To report suspected tax fraud, the public can call 0800 002 870.

Cape Times