Company director sentenced for defrauding SARS of nearly R1 million - IOL

Hanson Distribution CC and its director, Hanson Ntjangase, have been sentenced by the Specialised Commercial Crime Court following their conviction in a R993 330 VAT refund fraud case.

A Gauteng company, Hanson Distribution CC, and its director, Hanson Ntjangase, have been sentenced for defrauding the South African Revenue Service (SARS) of more than R993 000 through fraudulent Value-Added Tax (VAT) returns, after the director admitted his involvement in the scheme and agreed to testify against other alleged suspects.

Ntjangase was convicted in the Specialised Commercial Crime Court on 10 counts of fraud linked to the submission of fraudulent VAT returns that resulted in an unlawful refund of R993 330.

Ntjangase was also convicted of contravening the Prevention of Organised Crime Act (POCA).

The court sentenced Hanson Distribution CC to a R500 000 fine, wholly suspended for five years, on condition that the company is not convicted of fraud during the suspension period.

Ntjangase was sentenced to a fine of R500 000 or five years' imprisonment, also wholly suspended for five years, subject to the same condition.

On the separate POCA charge, he received a fine of R50 000 or one year's imprisonment.

National Prosecuting Authority (NPA) spokesperson Magaboke Mohlatlole said the fraudulent scheme unfolded after Ntjangase, who owed SARS approximately R180 000, sought assistance to resolve his financial difficulties.

He was subsequently introduced to two women who allegedly promised to help him raise funds.

Ntjangase provided the women with the company's login credentials, giving them access to its SARS tax profile.

Fraudulent VAT 201 returns were subsequently submitted, resulting in SARS paying R993 330 into Ntjangase's bank account.

Mohlatlole said the money was then distributed to several accounts.

"Acting on instructions, he transferred funds to various bank accounts, with the transfers exceeding R700 000," Mohlatlole said.

The transactions formed part of the fraudulent activities that ultimately led to the prosecution of Ntjangase and his company.

The court heard that Ntjangase later appointed a new bookkeeper and regained access to the company's SARS tax profile.

He subsequently discovered that two additional VAT refunds were due to the company.

After establishing that the refunds were fraudulent, Ntjangase reported the matter to SARS and requested that the payments be stopped.

"Upon realising that the refunds were fraudulent, he reported the matter to SARS and requested that the payments be stopped and cancelled," Mohlatlole said.

The additional fraudulent refunds were subsequently cancelled, and the matter was referred for investigation.

Ntjangase pleaded guilty and cooperated with SARS and the prosecution during the investigation.

He also repaid the money from which he had personally benefited.

As part of his cooperation with the State, Ntjangase undertook to testify against other individuals allegedly involved in the fraudulent scheme.

"His cooperation includes an undertaking to testify against the remaining suspects, which is expected to assist the State in prosecuting other individuals allegedly involved in the scheme," Mohlatlole said.

The undertaking could assist prosecutors in pursuing further criminal proceedings against those allegedly responsible for facilitating the fraudulent VAT claims.

The NPA has reiterated its commitment to pursuing individuals and companies involved in financial crimes that result in losses to the country's revenue collection system.

Mohlatlole said tax fraud had serious implications for the government's ability to fund essential services.

"The NPA reiterates its commitment to combating fraud and financial crimes that undermine the integrity of South Africa's tax system and deprive the country of revenue required to deliver essential public services," Mohlatlole said.

The prosecuting authority also acknowledged the work of the Honeybadger team in investigating financial crimes.

"The NPA remains committed to working with law enforcement agencies, SARS, and other stakeholders to ensure that those involved in fraudulent schemes are held accountable," Mohlatlole said.