VAT fraudster sentenced to 15 years imprisonment
JOHANNESBURG – A Welkom businessman who defrauded Sars by using trust instruments and other legal entities, was sentenced to 15 years in prison last Friday.
Recado Williams Davids pleaded guilty to 404 counts of fraud for submitting 404 fraudulent Value-Added Tax (VAT) returns to SARS, declaring false outputs and inputs. The fraud, committed between 2007 and 2015 was enabled through the use of 12 legal entities, including their representatives and members.
Davids pleaded guilty in terms of a plea agreement reached with the state.
The counts were taken together for purposes of sentencing. He was sentenced to fifteen years imprisonment of which 6 years is conditionally suspended. Thus an effective imprisonment of nine years was handed down.
In another case, the Kimberly Magistrate’s court handed a five year suspended sentence to a Kimberley businessman for 32 counts of VAT fraud, and 47 other crimes including forgery and uttering and contraventions of the VAT and Tax Administration Acts.
Joseph Thabo Modupe, the chairperson of the Droogfontein Community Property Association and owner of a taxi business, committed the VAT fraud through two of his businesses. He was also fined R50 000 and was ordered to pay back to SARS the money fraudulently obtained.
In a plea agreement reached with the state, he acknowledged that he had defrauded SARS with approximately R550 000 by under-declaring income and submitting false input claims. The two businesses also failed to submit 30 VAT returns between 2013 and 2017.
Modupe furthermore pleaded guilty to 8 counts of forgery and 8 counts of uttering for providing false invoices to SARS in support of input tax claimed, and for failure to submit a personal income tax return for the 2014 tax year.
He has already repaid SARS a significant amount and the rest will be paid as instructed by court order.