Woman sentenced in Durban court
A 53-year-old Durban woman has been sentenced to an effective 18 years in prison for defrauding the South African Revenue Service of more than R3.7 million.
Khanyisile Casianna Gumede was sentenced in the Durban Regional Court after being convicted of five counts of fraud and one count of money laundering.
The National Prosecuting Authority said the fraud involved Gumede’s company, GG Catering and General Services CC.
The company was also fined R2 million. The fine was wholly suspended for five years, provided it is not convicted of fraud, theft or attempted fraud or theft during that period.
Fraudulent VAT returns submitted
According to NPA spokesperson Natasha Ramkisson-Kara, the company was registered for value-added tax, with Gumede acting as its VAT representative.
Between February and October 2018, Gumede submitted fraudulent VAT returns on behalf of the business.
The returns allegedly inflated input tax while declaring no output tax.
Prosecutors said the company was not trading during that period and had not incurred expenses that qualified for the refunds.
The false declarations resulted in unlawful VAT refunds and caused SARS losses of more than R3.7 million.
Some of the money was later used to settle a company debt.
SARS recovered none of the money
The fraud was uncovered during an investigation by SARS.
State advocate Zinhle Mthembu presented evidence from five witnesses during the trial, including SARS officials and a former employee of Gumede.
A SARS criminal investigator told the court that none of the R3.7 million loss had been recovered.
The investigator also warned that VAT fraud affects the government’s ability to collect revenue and fund essential public services.
Court imposes effective 18-year term
The court treated the five fraud charges as one for sentencing purposes and imposed a 15-year prison term.
Gumede was also sentenced to 10 years for money laundering.
Seven years of that sentence will run concurrently with the fraud sentence, resulting in an effective 18 years behind bars.
She was also declared unfit to possess a firearm.
The NPA welcomed the outcome and praised the prosecutors, SARS investigators and police officials involved in the case.