Cape Town - The State is ready to proceed with a R46 million tax fraud case against eight accused but on Wednesday a magistrate postponed the matter until November 22.
The postponement was to allow the eight to sort out legal representation as they face charges of racketeering, fraud, money laundering, forgery and uttering and contraventions of the Value Added Tax (VAT) Act.
The eight accused are Nafiz Modack, his mother Ruwaida, brother Yaseen, former SARS employee Faried van der Schyff, Bashier Syce, Nadia Said, Dominique McLachlan and Kulsum van der Schyff.
NPA spokesperson Eric Ntabazalila said: “Most of the accused were arrested on Wednesday morning, while Nafiz Modack was arrested at the Blue Down’s Regional Court where he was applying for bail on various charges, including the murder of Anti-Gang Unit (AGU) detective Charl Kinnear.
“Ruwaida and Yaseen Modack were released on bail of R50 000 each, while Syce was released on R25 000. Said’s bail was set at R20 000 and McLachlan and Kulsum van der Schyff had their bail set at R10 000 each.
“Faried van der Schyff and Nafiz Modack were remanded in custody. Van der Schyff will apply for bail on November 3, but Modack has not yet indicated that he wants to apply for bail. The State will oppose his bail application,“ said Ntabazalila.
The magistrate issued strict bail conditions which included handing over any travel documents or passports to the investigation officer immediately after their release on bail.
Ntabazalila said the accused were not allowed to leave the Western Cape without making a written application, including a detailed itinerary, to the investigating officer, whose permission or conditional permission would not be withheld unreasonably.
The case came about after an investigation conducted by the SARS Criminal Investigations Unit and SAPS using what Ntabazalila described as “the prosecutor guided investigations approach”, which revealed that SARS had paid out more than R46 million to the fraudsters.
Prosecutors from the Specialised Tax Unit allege that officials from the SARS criminal investigation unit were tipped off that 25 corporate entities, which were registered as VAT vendors, were e-filing claims for significant VAT refunds.
The court was told that the scheme entailed the submission of false information via the e-filing system, initially on VAT returns and subsequently on documents which purported to substantiate the claims.
In some instances, SARS paid out the VAT refunds, either based on the initial VAT201 returns submitted or based on additional substantiating documentation provided. In other instances, the refunds were disallowed.
Where VAT refunds were paid into the bank account of a particular VAT vendor, the monies were quickly transferred to various other bank accounts, effectively concealing the source.