JOHANNESBURG - In late 2008 a Pakistani-led criminal syndicate defrauded the South African Revenue Service (SARS) of just over R50m.
The fraudsters registered a duplicate of SBC International Management Services on the Companies and Intellectual Property Registration Office (CIPRO) database on July 10 2008. They then set up a bank account in the company's name and in October 2008 R31,6m in SARS tax refunds due to the legitimate company were diverted into this bank account and stolen.
In turn a duplicate of Sun Microsystems South Africa Pty Ltd was registered through CIPRO on November 5 2008 and in December 2008 R19,3m of tax refunds were stolen in the same way.
In October 2009 Finance Minister Pravin Gordhan stated in answer to a question in parliament that "SARS has lost a total of R50 949 743.80 in Income Tax Refund fraud as a result of [these] duplicate companies registered at CIPRO."
This case was successfully investigated and nine members of the Naqvi syndicate were arrested. Among these were Samuel Gouwe, a GijimaAst employee who pleaded guilty to corruption and theft and Audelia Makhubu, a SARS employee.
It appears that SARS and CIPRO failed to fix their systems to ensure that such frauds never occurred again for the problem returned tenfold (if not a hundredfold) this year. From early 2010 onwards a syndicate - or syndicates - repeatedly targeted SARS through a similar tax refund scam.