Alleged Cape Town underworld boss Nafiz Modack appeared in court on Wednesday on charges of racketeering, fraud, money laundering, uttering and contravention of the VAT Act.
He was arrested with seven other people at various addresses across Cape Town.
National Prosecuting Authority spokesperson Eric Ntabazalila said Modack, his mother Ruwaida, younger brother Yaseen, and SA Revenue Service employee Faried van der Schyff appeared in court on Wednesday on charges of racketeering, fraud, money laundering, uttering and contravention of the VAT Act. They were joined by Bashier Syce, Nadia Said, Dominique McLachlan and Kulsum van der Schyff.
The Hawks said in a statement that the group was being charged with racketeering under the Prevention of Organised Crimes Act.
“Most of the accused were arrested this morning while Nafiz Modack was arrested at the Bluedowns regional court where he is applying for bail on various charges including the murder of anti-gang unit detective Lt Col Charl Kinnear,” said Ntabazalila.
The group allegedly stole R46m from Sars through false VAT claims.
“Prosecutors from the specialised tax unit allege that officials from the Revenue Services (Sars) criminal investigation unit were tipped off that a number of corporate entities (25), which were registered as VAT vendors, were e-filing claims for significant VAT refunds,” said Ntabazalila.
“The scheme entailed the submission of false information via the e-filing system, initially on VAT returns and subsequently on documents which purported to substantiate the claims. The bimonthly VAT201 returns of the entities were filed via e-filing,” he said.
He said it appeared the aim of the scheme was to obtain VAT refunds from Sars to entities which were not entitled to such payments and to then dissipate the money to other accounts to try to erase the money trail.
“In some instances, Sars paid out the VAT refunds, either based on the initial VAT201 returns submitted or based on additional substantiating documentation provided. In other instances, the refunds were disallowed,” he said.
“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,” said Ntabazalila.
He said the investigation was conducted by the Sars criminal investigations unit and police in a prosecutor-guided investigation.
He said the investigation thwarted the potential loss of a further R219m to Sars as the fraudulent claim had not yet been paid out.
Ntabazalila said the case was postponed to November 22 for the accused to sort out legal representation and to request further particulars.
He said the state was ready to proceed with the trial.
Van der Schyff and Nafiz Modack were remanded in custody. Van der Schyff will apply for bail on November 3 2021.
Ntabazalila said Modack has not yet indicated that he wants to apply for bail and that the state will oppose his bail application.
Ntabazalila said Ruwaida and Yaseen were released on bail of R50,000 each while Syce's bail was R25,000. Said’s bail was set at R20,000 and McLachlan and Kulsum van der Schyff's was R10,000 each.
“The accused were released with strict bail conditions which included that they must reside at the addresses they supplied to the state, must inform the investigating officer in writing of any change of residential addresses and must hand over any travel documents or passports to the investigation officer immediately after their release on bail,” he said.
“They may not leave the Western Cape without making a written application including furnishing a detailed itinerary to the investigating officer which permission or conditional permission shall not be unreasonably withheld,” said Ntabazalila.
He said they had to report to the Bothasig Police Station twice a week between 8am and 8pm.
Modack is still fighting for bail in the Blue Downs magistrate's court where he faces charges relating to orchestrating the murder and attempted murder of Kinnear last year.