Nafiz Modack’s legal woes deepened on Thursday when he was arrested for allegedly defrauding Sars out of R46 million.
One of the seven people nabbed along with the alleged underworld kingpin, for apparent false tax returns, is a former Sars official, the National Prosecuting Authority revealed.
Modack’s mom Ruwaida, his brother Yaseen, former Sars employee Faried van der Schyff, as well as Bashier Syce, Nadia Said, Dominique McLachlan and Kulsum van der Schyff, were arrested by the Directorate of Priority Crimes early yesterday morning.
Modack was nabbed at the Blue Downs Magistrate’s court where he was appearing for a separate case.
The group appeared in the Cape Town Magistrates’ Court hours later where they were charged with racketeering, fraud, money laundering, forgery and uttering and contraventions of the Value Added Tax (VAT) Act.
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.
Ruwaida and Yaseen were granted R50 000 bail each, Syce was given R25 000, Said R20 000, McLachlan R10 000 and Kulsum R10 000.
They are expected to be back in the dock on 22 November.
Modack and Faried were remanded in custody and will go to the mang.
Van der Schyff’s case was postponed to November 3 for a bail application, and Modack’s to November 22, although he did not indicate whether he would be applying for bail or not.
NPA spokesperson Eric Ntabazalila said Modack was arrested at the Blue Down’s Magistrates’ Court where he was applying for bail in the murder case of Anti-Gang Unit (AGU) commander, Lieutenant Charl Kinnear.
It is alleged that the Sars Criminal Investigation Unit was tipped off about 25 businesses that were e-filing claims with false information for significant VAT refunds, Ntabazalila explained.
“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 geld was transferred between accounts in a bid to hide the source: “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.”
He said the investigation 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.”