A company and its director have been sentenced for fraud involving fraudulent Value-Added Tax (VAT) returns that resulted in an illicit refund of R993,330 from the South African Revenue Service (SARS).
Hanson Distribution CC and its director, Hanson Ntjangase, were sentenced in the Palm Ridge Specialised Commercial Crime Court on Friday 23 October after being convicted on 10 counts of fraud. Ntjangase was also convicted of contravening the Prevention of Organised Crime Act (POCA).
In a statement issued on Wednesday 28 October, National Prosecuting Authority (NPA) Gauteng spokesperson Magaboke Mohlatlole said the company was fined R500,000, wholly suspended for five years on condition that it is not convicted of fraud during that period.
Ntjangase was sentenced to a R500,000 fine or five years’ imprisonment, wholly suspended for five years on the same condition. He was also fined R50,000 or sentenced to one year’s imprisonment on the POCA charge.
The court heard that Hanson Distribution CC was registered for VAT and that Ntjangase owed SARS approximately R180,000.
While seeking assistance with his financial difficulties, he was introduced to two women who allegedly offered to help him raise funds. He subsequently gave them the company’s login credentials and access to its SARS tax profile.
Fraudulent VAT 201 returns were then submitted, resulting in R993,330 being deposited into Ntjangase’s bank account. Acting on instructions, he transferred money to various bank accounts, with the transfers exceeding R700,000.
Ntjangase later changed his bookkeeper and regained access to the company’s tax profile. He discovered that two additional VAT refunds were due to the company.
After realising that the refunds were fraudulent, he reported the matter to SARS and requested that the payments be stopped and cancelled. The refunds were subsequently cancelled, and the matter was referred for investigation.
Ntjangase pleaded guilty and cooperated with SARS and the State. He also repaid the amounts from which he had personally benefited.
According to the NPA, he has undertaken to testify against the remaining suspects, which is expected to assist the State in prosecuting other individuals allegedly involved in the scheme.
The NPA reiterated its commitment to fighting fraud and financial crimes that undermine the country’s tax system and deprive the government of revenue needed to provide essential public services.
It also acknowledged the role of the Honeybadger team in investigating financial crimes and said it would continue working with law enforcement agencies, SARS and other stakeholders to hold those involved in fraudulent schemes accountable.
