This week our story took place in the Cape High Court, 2020. We have Mr Luis Filipe Duarte D’Almeida [Fernandes] and Mr Nazmien Warner. These are two businessmen who were found guilty of VAT fraud, racketeering, money laundering and corruption. They were sentenced to 16 and 17 years direct imprisonment. The charges against them come from a “R115 million VAT fraud scheme ran by Mr Fernandes and Mr Warner between 2008 and 2015.”
During 2008 -2015, they submitted claims of fraudulent Value-Added Tax Returns amounting to R115 million by using fraudulent invoices from non-existent companies. They misrepresented to South African Revenue Service (SARS) that they had purchased goods in the country (South Africa) and exported those goods to other countries in Africa. Woah!
Mr Fernandes and Mr Warner furthermore forged documents such as export documents and supplier invoices. They submitted these forged documents to SARS upon request. “SARS was prejudiced by R111 million.”
Further fraud charges against Mr Fernandes were that his employees were under the impression that the PAYE deducted monthly from their salary was paid to SARS, while the companies were actually never registered with SARS as employers. What!
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.” Messieurs Fernandes and Warner agreed to testify against him. Yoh!
According to both Mr Fernandes and Mr Warner, they used the money to fund other businesses ventures which failed (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, during this time, invested in share properties as well.
Their Judgement
“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.”
“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.”
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.
DISCLAIMER! This content is for educational and informational purposes based on publicly available information.
Source: SARS