Cape Town - The National Prosecuting Authority revealed one of the persons arrested alongside alleged underworld figure Nafiz Modack, for apparent false tax returns amounting to millions, is a former Sars official, and strict bail conditions have been set for each.
Ruwaida Modack, Modack’s mother, brother, Yaseen Modack, former South African Revenue Services Employee, Faried van der Schyff, Bashier Syce, Nadia Said, Dominique McLachlan and Kulsum van der Schyff, were arrested by the Directorate of Priority Crimes.
Ruwaida and her son Yaseen, were granted R50 000 bail each, Syce was given R25 000, Said, R20 000, McLachlan, R10 000, Kalsum van Der Schyff, R10 000, and are also expected to be back in the dock on November 22 2021.
Modack and Faried van der Schyff appeared separately.
Van Der Schyff’s case was postponed to November 3 and Modack November 22.
NPA spokesperson Eric Ntabazalila said the accused were arrested while Modack was making an appearance at the Blue Down’s Magistrate’s Court for charges, such as the murder of the Anti-Gang Unit (AGU) detective, Lieutenant Charl Kinnear.
Ntabazalila said each was given strict bail conditions, which meant they had to reside at the addresses given to the State and had to hand over all travelling documents.
They are also not allowed to leave the Western Cape without permission, and they need to report twice a week to Bothasig Police Station.
They are also to notify Sars immediately on any submission of a return.
The State is set to prove that the group had registered as Value Added Tax vendors and were e-filing claims for refunds which could not be determined, and that payments of R46 million were received.
“The accused shall not commit any act of fraud, forgery, uttering, theft, intimidation, or defeating or obstructing the administration of justice and may not contravene any of the provisions of the Income Tax Act, the VAT Act, or the Tax Administration Act. They may not submit any false information to Sars when submitting their own tax return or those of any other taxpayer.”
Ntabazalila added that Van der Schyff and Modack were remanded in custody and that Van der Schyff would apply for bail, while Modack has not yet indicated that he wants to apply for bail. The State will oppose his bail application.
“Prosecutors from the Specialised Tax Unit allege that officials from the South African Revenue Services (Sars) Criminal Investigation Unit were tipped off that a number of corporate entities (25), which were registered as VAT vendors, were e-filing claims for significant VAT refunds.
“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. The bi-monthly VAT201 returns of the entities were filed via e-filing. It appears that the aim of the scheme was to obtain VAT refunds from Sars, to which the entities were not entitled, and to dissipate the monies received.”
Ntabazalila said a pattern became clear where monies were transferred between accounts in a bid to hide the source: “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 thereof.
“An investigation conducted by the Sars Criminal Investigations Unit and members of the South African Police Services using the Prosecutor Guided Investigations (PGI) approach yielded positive results as it revealed that Sars paid out more than R46 million to the fraudsters.
“The cooperative approach also exposed that there was a potential loss of R219m to Sars. Fortunately, the revenue services had not paid out yet the fraudulently claimed amount.
“The State is ready to proceed with the trial.”