Two found guilty of defrauding SARS

Tuesday, August 28, 2018

A bogus tax practitioner was one of two people sentenced to a combined 26 years direct imprisonment for defrauding the South African Revenue Service (SARS).

Cornelius Johannes Kriek (42) from the East Rand pleaded guilty to 29 fraud charges, 21 money laundering charges and one charge of corrupting a public official.

Kriek was sentenced to 20 years imprisonment at the Specialised Commercial Crime Court in Johannesburg on Tuesday.

On Thursday, the Cape Town Magistrate’s Court sentenced Thomas Bloemeris Fortuin (66) to six years direct imprisonment. He pleaded guilty to 236 charges of fraud and forgery relating to the tax affairs of close corporations belonging to members of his family.

He pleaded guilty to all the charges put to him in terms of a plea bargain agreement reached with the State. Magistrate W van der Merwe handed down an additional 12 months imprisonment to Fortuin for failure to submit two income tax returns.

Three of the six-year imprisonment sentence and the one-year jail sentence for failure to submit outstanding returns were suspended conditionally for five years.

SARS said Kriek presented himself as a bookkeeper to unsuspecting Value Added Tax (VAT) vendors, offering swift and corrective action by submitting VAT201 returns on their behalf.

Suspicion was raised by a legitimate tax practitioner, who discovered that a large refund had been paid into the account of her former client within a short while after the client had switched his account to Kriek.

The 42-year-old was also sentenced to 84 years imprisonment, suspended wholly, but conditionally for money laundering and 10 years imprisonment for corrupting a public official.

Five of the ten years is to be served concurrently with sentences for other charges.

“It is alleged that a former SARS employee, previously employed by SARS as a VAT auditor for 35 years, assisted Kriek to commit the fraud. The cases against the two accused were recently separated after Kriek pleaded guilty. The case against the former SARS employee continues on 23 October 2018,” said the revenue service on Tuesday.

The fraudulent refunds were divided between the vendors, Kriek and the SARS employee. A total of 18 companies were involved in the VAT refund scheme, which created an actual loss of just over R32.9 million to the fiscus.

In Fortuin’s case, two other accused were also sentenced, namely his son Tom Ross and bookkeeper Ivor Carlo Carolissen, who assisted the family to commit the crimes.

The two also entered into a plea bargain with the State and they were both sentenced to four years imprisonment, suspended for five years and 18 months correctional supervision, which includes house arrest and community service.

Fortuin was found guilty of 79 charges of fraud, while Carolissen was found guilty on 167 charges of fraud.

“Mr Fortuin (junior) was ordered to pay SARS back an amount of R615 592, representing the full capital amount of money stolen from SARS through the scams perpetuated by the accused. This money had to be paid in full before the sentencing procedure, and has been received by SARS,” said SARS.

He was also sentenced to 12 months, suspended for five years, for failure to submit three income tax returns.

The sentences follow an investigation by SARS criminal investigators, which revealed that the individuals submitted fraudulent VAT refund claims to SARS, based on fictitious transactions between the family’s four close corporations.

Group Executive for Criminal Investigations at SARS, Neo Tsholanku, welcomed the sentences, adding that the revenue service is committed to the fight against corruption.

Tsholanku said the sentences also show that the courts are increasingly taking a stance against failure to submit tax returns to SARS.

The National Prosecuting Authority (NPA) has prosecuted 29 cases since April 2018, maintaining a conviction rate of 97%. More than 400 other cases dealing with tax crimes are currently on trial. –