VAT fraudster jailed for seven years

A 39-year-old man has been sentenced to seven years’ direct imprisonment for fraud and money laundering involving value-added tax (VAT) refunds amounting to more than R1.8 million. The Palm Ridge Specialised Commercial Crimes Court in Gauteng convicted Lufuno Matodzi on six counts – three offraudand three of money laundering. Matodzi was handed down seven years for the fraud counts and seven for money laundering, but the court ordered that they be served concurrently, resulting in an effective seven-year sentence.

National Prosecuting Authority (NPA) regional spokesperson Magaboke Mohlatlole said Matodzi’s conviction came after he unlawfully hijacked the registration details of a company called Coco Pure Manufacturing CC. This after the business owner, identified as Mr Hassan, asked him for help with submitting the company’s tax returns. “Instead of providing the requested assistance, Matodzi fraudulently amended the company’s records with the Companies and Intellectual Property Commission, making himself the sole member of the close corporation,” Mohlatlole said on Friday, 31 July.

Mohlatlole said Matodzi further used theSouth African Revenue Service‘s eFiling system to unlawfully change the company’s public officer and banking details. He then submitted fraudulent VAT refund claims for the February, April and June 2019 tax periods. “Through this scheme, he fraudulently claimed and received VAT refunds totalling more than R1.8 million, which he subsequently transferred to various bank accounts to conceal the proceeds of crime,” the NPA spokesperson said.

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In court, senior state advocate Phumlani Ntshangase argued that Matodzi deliberately hijacked the company’s records to fraudulently claim VAT refunds and launder the proceeds. Ntshangase further argued that the “serious, sophisticated and premeditated” nature of the offences warranted direct imprisonment. “The NPA welcomes the conviction and sentence, which underscore that tax fraud and money laundering are serious economic crimes that undermine the country’s revenue collection system and prejudice the public fiscus,” Mohlatlole said.

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