R266m VAT refund ploy backfires

Eight directors of company arrested at SARS head office while demanding payout IN a boardroom in the SA Revenue Service head office in Pretoria, eight impatient directors, with their bodyguards, gathered to demand their quarter-of-a-billion-rand payout from the taxman.

What they did not know, while being made comfortable by SARS staff, was that they were the targets of a sting operation.

The company they allegedly owned is understood to be the SA Community Government Union (Sacgu), which five years ago was accused of hijacking a mine.

It also claims to be South Africa’s true government and wants to dissolve the police force. Instead, the SA Police Service together with SARS officials, arrested the six men and two women on Wednesday afternoon on charges of tax fraud and possible racketeering. The four bodyguards were released. “We have arrested the leadership,” SARS spokesman Luther Lebelo said.

He said SARS had been alerted to the alleged fraud by a “risk engine” – similar to a computer algorithm – that flagged suspicious activity.

The suspects allegedly tried to defraud SARS of R266 230 423 and presented it as a value-added tax claim earlier this year. The company is registered as an NGO. “Ordinarily, these refunds can be paid in 72 hours, but this was flagged and we wanted to see more evidence,” Lebelo said.

He said the documents, including fictitious staff payslips, were found to be fraudulent.

The eight directors became impatient about their payout and demanded to see the commissioner.

“They came and we set up the sting,” Lebelo said.

The suspects have not yet been named.

The eight will appear in the Johannesburg Commercial Crimes Court today. -Shaun Smillie