S v Meyer and Others (204/2012) [2017] ZAGPJHC 286 (4 August 2017)

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[2017] ZAGPJHC 286
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S v Meyer and Others (204/2012) [2017] ZAGPJHC 286 (4 August 2017)

IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO
: 204/2012
DATE
:
4 August 2017
CASE
NO
: 204/2012
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
IN
THE MATTER BETWEEN:
The
State
Versus
Anton
Meyer
Accused
one
Garth
Alan
Coetser
Accused
two
Clifford
Lloyd
Stevens
Accused
three
Coram:
Klein, M A/J
Date
of Hearing: 26 January 2015 (accused pleaded) to 4 August 2017
(judgment)
Delivered:
4 August 2017
Criminal
procedure law- legal representation-section 22 of the Legal Aid South
Africa Act 39 of 2014-empowers a Court to refer to
the Legal Aid
Board- where the applicant  refused legal
representation-particular circumstances-report to court-section 22

(1)(a)(ii) the Legal Aid South Africa Act 39 of 2014.
Criminal
procedure-witnesses’ right to consult with legal
representative-right to have legal representation in court
Criminal
procedure-Tax Administration Act, Act 28 of 2011 (“the
TAA”)-state privilege-manuals and procedural
documents-privileged
documents
Criminal
procedure-
excluding evidence-
section 210
of the CPA -
irrelevant or
immaterial -or prolonging the case without good cause
Criminal
procedure-documentary proof-section 15 of the
Electronic
Communications and Transactions Act, 25 of 2002 (ECT
Act)-admissibility of a data message
Criminal
law-common purpose- “scene” in case of fraud -cyberspace,
offices, state buildings
Criminal
law-money laundering- cheque swops-money can be camouflaged, filtered
through fake companies by means of “cheque
swaps”-section
4(b)(i) read with the provisions of sections 1 and 8 of POCA
JUDGMENT
KLEIN
A/J
introduction
[1] The accused, Mr Anton
Meyer (accused one), Mr Garth Alan Coetser (accused two) and Mr
Clifford Lloyd Stevens (accused three)
are charged with the following
counts: Counts 1 to 198 fraud, read with the provisions of section
51(2)(a) of Act 105
of 1997. First Alternative to counts
1-198: Contravening section 59(1)(d) of the VAT Act,89 of 1991.Second
Alternative to counts
1-198: Contravening section 59(1)(a) of the VAT
Act,89 of 1991. Counts 199 to 237 forgery, read with the provisions
of section
51(2)(a) of Act 105 of 1997.Counts 238 to
276 uttering, read with the provisions of section 51(2)(a) of
Act 105
of 1997.Counts 277 to 356, which is known as money
laundering, in terms of section 4(b)(i) read with the
provisions of
sections 1 and 8 of the Prevention of Organised Crime
Act 121 of 1998 (“POCA”).
[2] The State alleged
that the accused acted in furtherance of a common purpose to commit
the offences.
[3] The state alleged
that the accused used 18 entities to fraudulently claim VAT refunds
from SARS, totalling R216 308 27.95
million of which
R147 580 438.99 was paid out to the said entities.
Legal Representation
and Legal Aid
[4]
The accused were arrested in 2010. There were several delays in this
trial. One of the reasons given was the lack of funds for
legal
representation. Eventually by end 2014 the honourable Judge Horn
ruled that the trial will start on 26 January 2015. The
question of
representation was again taken up in middle 2015 after the court had
given an indication that it might be a good idea
for the accused to
again apply to Legal Aid South Africa for legal representation at
state cost. A trial within a trial was held
and the court handed down
a judgment.
[5]
A
rule nisi
order was first issued on 28 July 2015 as
follows:1. Legal Aid South Africa was to report to the court on or
before Wednesday 5
August 2015 why the order contemplated in 2,
should not be made an order of this court; 2. In terms of section 22
of Act 39 of
2014 the court directed that accused one  Anton
Meyer and accused three Clifford Stevens be provided with Legal
Representation
at state expense, subject to the Legal Aid South
Africa Act 39 of 2014 and regulations promulgated thereunder.3. The
court order
to be hand delivered to the Regional Operations Executive
Gauteng Regional Office together with copies of the two applications
from accused 1 and accused 3.
[6] The order was made
under the following circumstances: The court on 27 July 2015 asked
accused  1 and 3 who were unrepresented
if they want the court
to look at section 22 of the Legal Aid South Africa Act 39 of 2014
This section empowers a Court to refer
to the Legal Aid Board, a
matter where the applicant has been refused legal representation at
state expense by Legal Aid South
African and the court is of the
opinion that there are particular circumstances that need to be
brought to the attention of Legal
Aid South Africa by the court in a
report referred to in subsection (1)(a)(ii).
[7]
The two accused submitted applications where they asked the court to
intervene. The matter was postponed and the Chairperson
of the
National Bar Council of South Africa was approached to provide
counsel with experience to assist the two-unrepresented accused.
The
court subsequently appointed adv Gerhard Van Wyk as amicus curiae to
assist the accused. Adv G Van Wyk, appeared as
amicus curiae
in respect of the pending LA application of Accused 1 and 3. Adv W
Karam and later a
dv Phillip Mokoena SC and adv
Yacoob who represented Legal Aid South Africa.
Adv Van Wyk as
amicus curiae
on behalf of Accused 3, brought to the attention
of the court that accused three is the owner of immovable property
and therefore
withdrew his application. The court then confirmed that
Accused 3 did not qualify for legal aid.
[8]
The court ruled that the matter concerning the
legal aid application be treated as a trial within a trial. The court
received the
four (4) volume section 22 report and ruled on the dates
for affidavits and Heads of Argument. After hearing argument, the
court found that Legal Aid SA carefully considered all
relevant factors and correctly found that Accused 1 does not qualify
for
legal assistance at State expense.
Legal
Representation during the trial
All
three accused
[9]
All three accused were represented by attorney Mr Schaefer in May
2011 who withdrew formally on 21 July 2014 as attorney, but
appeared
again on 18 August 2014 and 9 October 2014 making representations for
the day only. Adv G Van Wyk appeared as
amicus curiae
for
accused one and three concerning legal aid. On 16 and 21 September
2016 adv Kolbe S.C. applied for leave to appeal against
the dismissal
of a recusal application on behalf of all three accused.
Mr
Meyer
[10]
Mr Meyer appeared in person for the greater part of the case, he was
only again represented by Mr Schaefer on 11 March 2016
concerning his
bail forfeiture.
Mr
Coetser
[11]
Mr Coetser indicated on 2 February 2015 that he was represented by
adv S Fourie. On 5 February 2015 adv W Carstens appeared
for Mr
Coetser. On 20 April 2015 adv M Du Preez appeared for Mr Coetser and
has been doing so for the remainder of the trial. On
15 August 2016,
Mr Coetser was legally represented by adv Mustebruke concerning a
review application.
[12]
Mr Stevens was in person from the date of plea, 26 January 2015, to
11 April 2016 when he was legally represented by adv Gissing,
up to
15 August 2016. Adv Gissing appeared again on 30 August 2016
concerning his bail forfeiture. Adv P Louw appeared for Mr Stevens

from 23 January 2017 to date.
The
accused pleaded.
[13] On 26 January 2015
the accused were unrepresented. The charges were read and the accused
were asked to plea but they did not
plea, they said that they were
not legally represented and a plea of not guilty for all of them was
entered in terms of section
109 of the Criminal Procedure Act, 51 of
1977. (The CPA). No admissions were made nor were any plea
explanation given.
Section 105 address by
State
[14] The State’s
case is that the accused in this matter acted as the directors and
representatives of 18 entities and acting
with common purpose with
one another, operated a fraudulent VAT scheme. The accused’s
scheme was to defraud SARS by claiming
fraudulent tax refunds in
respect of eighteen entities during the period January 2007 to March
2010. The accused’s companies
were used as a vessel to
perpetrate the fraudulent VAT scheme against SARS.
[15] It is further
alleged that SARS conducted several audits on the respective entities
from which it became apparent that the
supplier’s invoices
substantiating the VAT refund claims were false. This is the basis
for the forgery and uttering charges
levelled against the accused.
[16] The accused, it is
then alleged, laundered the proceeds of the fraudulent VAT refunds
relating to the entities especially by
way of intercompany transfers
called cheque swops.
[17]
T
he State’s case is based on 18 entities
registered for VAT purposes and 2 other entities which were not
registered for VAT.
The names are reflected in Schedule “A”
to the indictment. But Schedule “E”, “Forged
Supporting Documents”
are only applicable to the following
entities: Schedule “E”, “Forged Supporting
Documents” are only applicable
to the following entities:
Counts 9-13: Copper Sunset (2);Counts14-21; Legacy IT
Solutions(3);Counts 22-24: Square One(4);Counts 30-47: CCG Rentals
(6);Count
56: Superbrush (7); Counts 72-74: Geo Relational (8);Counts
84-91: Square One Power (9);Count 115: Monkor Management (11);Counts

126-129: CCG 119 Investments (12);Count 133:Sunmark Farms (13);Count
143: Square One Imports (14);Counts 170-179: Sunmark International

(17);Counts 193 – 198: Multi Cupboard (18).
[18]
The state called 12 witnesses. The accused did not give evidence in
their own defence, but elected to call their own witnesses.
Mr Meyer
called 4 witnesses and Mr Coetser called 15, Mr Stevens elected not
to call any witnesses as his counsel indicated that
the defence had
already called all those he wanted to call.
The evidence of the
state witnesses can be summarized as follows:
Abrahams E
[19] Mr Edward Abrahams,
a SARS employee, is a security officer who looks after the securities
of the main frame. SARS uses a unique
system which is tamper proof.
In order to get onto the main frame, you need access to the SARA
device. Hacking is not possible.
There was no communication between
SARS and SAA.
Engelbrecht, R
[20] Mr Riaan Engelbrecht
is an investigator at SARS since 1994 and holds a B. Comm law degree.
He has been at SARS for 24 years
and started working in the
investigation department in 1994. His duties are to investigate
any tax related crimes that primarily
are referred to him by the SARS
audit division. He is as a SARS investigating officer not a peace
officer. The specific matter
against the accused relates to the Value
Added Tax Act.
[21]
He explained the VAT system to the court. He started investigating
the “group” when he was alerted by a Durban
SARS employee
that a company called Multi Cupboard (Pty) Ltd had claimed a number
of refunds relating to importation and exportation
mainly for
software.
[22]
Every vendor has a VAT file. Correspondence will also be put on the
VAT file as well as audit queries. Mr Engelbrecht took
the court
through exhibit A establishing the 18 entities which were registered
for VAT per the VAT101 documents. There were an
additional 2 entities
which were not registered for VAT.
[23]
The witness testified about exhibits in Exhibit B which is summarized
in Schedule B to the indictment. Schedule B thus shows
the VAT
claimed and VAT paid out. The witness explained the amounts that
differ from claimed to paid out as being mostly interest
paid.
Furthermore, the court was referred to the B exhibits and
corresponding C exhibits where amounts were paid out. The witness

also testified about VAT that was not paid out but which were claimed
by the entities. SARS sees this as a potential loss.
[24] The witness said
that SARS will also be relying on section 15(4) of the Electronic
Communications and Transactions Act 25 of
2002 (ECT Act) as SARS
submitted electronic evidence. The witness also referred to those who
signed the Vat claim forms. The witness
also testified about inter
account transfers. This is reflected in the exhibits. Mr. Meyer
signed C9 to C93. B(96) was electronically
signed by Mr. Meyer.
Concerning entity number 15: Amber Falcon: Mr Garth Coetser, accused
2, signed the letter for Mr Stevens,
accused 3, to open a bank
account: C15-099. Mr Meyer signed B157 the VAT 201 relating to Amber
Falcon. B158 was also signed by
Mr Meyer. The witness showed all the
CAMS transfers which are found in exhibit “F”.
[25]
Mr Engelbrecht also testified about the VAT returns.  That is
now the returns submitted by the 18 entities over the relevant

period. The VAT returns are marked or are referred to normally as a
VAT 201 form.  The VAT 201’s are marked Exhibit
B. The
state took the witness through all the VAT returns. The accused are
facing 198 counts of fraud because there are 198 VAT
returns. The
state then asked the witness to show the similarities between the VAT
refunds and the amounts transferred to the bank
accounts, which he
did.
[26]
The witness also testified who, according to the bank documents, were
the authorised persons to sign on the accounts. The witness
would
read the names and give details, i.e. “FNB has recorded as list
of authorised signing officials being: Garth Allan
Coetser, ID number
580915 5024 08 and it is cut off.  Wendy Jean Wright,
ID number 520614 0072 08, Belinda
Dorothy Roberts, ID
number 691003 0071 082. Sheryl Kay Gillett, PA to Garth
Allan Coetser.  ID number 580530 0106 08.
“
[27]
The witness also stated that FNB has “recorded or on the
document it is recorded as Garth Allan Coetser being
the
director and the next two ladies being designated as accountants.”
The amounts that were transferred by CAMS were also
put on record.
[28]
The state referred to Exhibit K which is a Section 212
statement which relates to the returns submitted by e-filing.
Section
23 of the VAT Act provides that to every person that become
liable to be registered as a vendor, upon registration SARS assigns
a
number, a VAT number.  Section 28 provides that the vendor
should furnish the Commissioner with the return.  Section
28(5)
of the VAT Act requires a member or his representative to sign the
return. The Regulations prescribe that an electronic signature
is
deemed to have been attached by the person who submitted that return
by means of e-filing services. In terms of the Regulations
the
electronic signature of the vendor or representative is
electronically linked to that return when the electronic return is

submitted by means of e-filing.
The witness went
through all the signatory cards and put on record those who had
signing powers. These are reflected in Exhibit
A.
[29]
The witness took the court through all “B” exhibits
comparing and showing deposits made into Exhibit “C”.
“B”
is the VAT forms and “C” is the bank accounts. The
witness testified about the bank documents at page
C12.8. This
account was registered in a close corporation by the name of Ofenze
Consultancy CC.  The contact person given
on that document is C
T Mabusa in the capacity as a member, at C12.9 there is also his
details given. There is an ID number, residential
address, cell phone
number and he signed the document. The witness did not know the
person but gave the following explanation:
He then gave hearsay
evidence and told the court what Standard Bank explained to him.
When they have an account number that
is closed after a certain time
period lapses they reuse that account number. The witness testified
about the signatory cards, i.e.
Exhibit C13, page 11.  He
mentioned the persons who had signing powers on the account namely
Sheryl Kay Gillett.  Wendy
Jean Wright.  Belinda Dorothy
Roberts and Garth Alan Coetser, accused 2.
[30]
The witness was asked who signed the VAT return Exhibit B147 for the
period 10-07. It was signed by W Wright.  The amount
that had
been claimed was R960 400.
[31]
The witness also referred to page 14 of Exhibit C, a letter from
entity number 15 dated 31 August 2007.  He read the contents

into the record. It reads as such:
“
To
whom it may concern.  This affidavit serves to confirm that I,
Garth Alan Coetser, ID number 580915 5024 085 as
a director
of the abovementioned company hereby authorise Mr C L Stevens to open
a bank account with First National Bank as the
sole signatory of this
account.  Thank you. Mr G A Coetser”  Signed as such.
[32]
The cross examination continued in a similar fashion, i.e. the
question was put: ”Now we were dealing with the VAT return
for
count 147, do you see this amount reflected in the bank statements,
C15. The answer: “Indeed it does reflect there, showing
that
the money was transferred into the account on 1 February 2008.”
[33]
Mr Engelbrecht testified about Exhibit “F”,
called inter account CAMS transfers. He testified that he found
corroboration
for the CAMS transfers. He explained in detail, i.e.
“On page 79, at the top of the page, the first transfer that
was dealt
with on that page, shows that on the 16
th
of March 2007 the amount of R812,000 was transferred from the account
of Sunmark International, to the account 62062045705 which
is marked
on that schedule CCG, client account otherwise known as CCG183 and so
also on the same page, the amount of 110,000 was
transferred on the
29
th
of March 2007, to the same CCG client account.”
TRIAL WITHIN A TRIAL
[34]
It was at this stage of the proceedings
that counsel for accused two, objected to the evidence: She said: “My
instruction
at this stage, even before the state starts with the
evidence in Annexure E to object to the use of the evidence.
It
is common cause that there was an illegal search and seizure,
documents were handed back.  It is my instruction that it is
not
clear whether these documents were part of the illegal search and
seizure and copies were made thereof and what the position
is.”
Counsel mentioned that an agreement was reached for the handing back
of said documents. She said: “In other
words the state
conceded.  It is my instruction that these documents cannot be
in the possession of the state, save for being
copied from the
documents obtained by the search and seizure.”
[35]
Counsel for the state put on record the
following: The state, the respondent in that motion matter, confident
of the strength of
its case against the accused, decided not to fight
the application to have the documents returned and an agreement was
entered
into between the respondent (the state in this matter) and
the applicants, to have the items returned.” Counsel for the
state
confirmed that all seized items were returned but not stamps.
The state was of the opinion that a trial-within-a-trial should be

proceeded with to ascertain the admissibility of EXHIBIT E.  and
Counsel for the state mentioned that the state is confident
that it
will show that none of the exhibits tendered, were in fact part of
the seizure. The state’s submission was that this
is a factual
question and not a legal question. After the trial within a trial was
concluded, the Court ruled that the documents
were not illegally
obtained. A wrtten judgment was handed down in this connection.
[36]
The witness looked at EXHIBIT C, that is
the bank statements of all the eighteen entities.  The first
exhibit is C1, entity
1,CCG 130, E9 is in relation to count 9, there
are no supporting documents in respect of counts 1 – 8. (The
court notes that
the reference to “no supporting documents”
is not a reference to “no documents at all” but the
witness
says no supporting bank statements). EXHIBIT C1:  The
five returns that was submitted in respect of CCG 130 Investments for

counts 1 – 5 were all returns with zero rated sales except one.
Zero rated sales
[37]
A zero rated sale is a sale of goods and
services at the zero rate.  The goods that are sold at the zero
rate in terms of section
11 of the VAT Act, relates mainly to basic
food stuff.
Activities on bank
accounts
[38]
There are very few transactions that Mr
Engelbrecht could identify that relates to the normal trading
activities of the business.
The majority of the transactions that are
reflected on these bank statements are what was referred to by these
companies as cheque
swops. (Cheque “swops” are also
called cheque “swaps”, the court will again refer to this
term
infra.
)
[39]
Where a cheque is deposited into one
account, for instance, a deposit into CCG130 and then a cheque is
issued by CCG130 and that
is deposited into another account. That is
a cheque swop. Exhibit B1 is the VAT return submitted for CCG 130
Investments (Pty)
Limited for the period September 2008, or ended
September 2008. Which in this case was for the period August and
September 2008.
Pages C1-11, C1-12 in the entities bank statements
will be the relevant pages in exhibit C1 for this period.
Comparing B1 return with these pages C1-11 and C1-12, these two
documents tell a completely different story.  For instance,
in
the VAT return sales of R225 720 were declared as standard rated
sales and R5 457 000 was declared as zero rated sales.
“So
we are talking about sales of an excess of R5 600.000. “
[40]
Mr Engelbrecht explained. He said for the
period July, August there was a R1 000 deposit into this account
and August, September
there were electronic transfers of R13 000
deposited or made into this account and the same amount withdrawn in
cash. For that
return, there were standard rated sales of R204 117
declared and for zero rated sales of R17 913.250. The input tax of R1
200.992.13!
In February, there was R400.000 transferred
into this account on 17
th
February, then on 18
th
February there was a cheque deposit of R1,184, 951.25. This is also
confirmed by EXHIBIT C1 on page 17.  Then on the same
day, on
18
th
February there was a cheque issued, cheque no 6 for R1, 188.000.63.
The witness then explained: “Now if you look at
page C1-5 you
will see a copy of that cheque.  It was a cash cheque.  If
you look at C1-6 you will see that that cheque
was deposited into the
account for Super Brush (Pty) Limited which is one of the companies
on the indictment. In respect of count
3, exhibit B the VAT return,
C1-22 reflects the deposit. He said he looked at only February and
March which is for the same
period there was a VAT refund paid out of
R636, 268 on 10
th
March.  R600,000 was transferred out.  There was R390,000
also transferred out earlier on 2
nd
March and inter companies transfers.  Then on 27
th
March there was R1,269,940 paid into this account by cheque deposit
and on the same day cheque 8 was issued for R1,268,420.13.
[41]
There was nothing going on in April, just a
R50.000 transfer out of the account and then there was a receipt of
that earlier VAT
refund of R1,100,000 then the subsequent transfer
out on the same day.
Registration with
customs
[42]
Ms Watts told him (the hearsay was
provisionally allowed) that any company or entity that exports or
imports goods into or out of
South Africa must be registered with
Customs as an exporter or importer. Unless they do it very
irregularly. She however checked
on their system and found that CCG
130 was not registered as either an importer or exporter.
[43]
Mr Engelbrecht explained that If you look
at the VAT return you will see R616 000 odd was declared as standard
rated sales and R7,100,000
was declared as zero rated sales and input
tax of R1,066, 000 was claimed as input.  Yet the only activity
on the bank account
seems to be cheque swops.  There was a
cheque deposited on 19
th
November for R981,000 and on the same day a cheque was issued and a
cancelling of it.  As a result of the cheque being unpaid.

That was cheque no. 32 and it was unpaid as a result of a cheque that
was earlier deposited into the account also going unpaid.
Or
RD.  Then there was a cheque deposit on 23
rd
November for R982,000 and another cheque no. 34 issued for R981,036.
Mr Engelbrecht concluded that besides cheque swaps,
unpaid cheques
being cancelled out, there was no activity on that account.
[44]
Concerning entity no. 4 which is Square One
Doc Solutions, Mr Engelbrecht testified that it relates to counts 22
– 24,
there are supporting documents in respect of all
three counts. B42 is a VAT return for the period ending July 2009.
It is
for the period June, July 2009 it shows standard rated sales of
R1.064.000 and zero rated sales of R9.075.000.  It claims input

tax of R1.063.000.  The bank activity for this period is at
C6-64 to C6-67.  There is what seems to be a cheque swop
on 30
th
June.  Payment of a cheque into the account of R1.337.000 and
payment of a cheque 109 out of the account of R1.335.000.
Then
there was a CAMS transfer of R200.000 into the account, and on 24
th
June showing cash from GAC Loan, he understood “GAC” to
mean Garth Alun Coetser.  Then there was a CAMS payment
made on
24
th
June of R128.819.00.  Then in July there were three debit orders
paid of R24.000, R7.000 and R15.000 and besides that just
two CAMS
transfers of R2.600 and R1.700. Mr Engelbrecht concluded: “Besides
that nothing close to what has been declared
on this return.”
[45]
Concerning entity 7 known as Superbrush,
counts 48 – 61, he said that there are supporting documents for
counts 56, the only
supporting document in respect of this entity for
that count.  Ms Watts stated that Super Brush was indeed
registered as an
importer and exporter and had Customs code 331230.
However, Ms Watts drew a printout from the Customs system showing all
transactions of such imports and exports captured on their system for
such importer and found that for the period January 2007 to
March
2010 that there were no transactions reflected on the system.
FOREX
[46]
The witness examined the bank statements in
respect of all eighteen entities and could not find any indication of
forex (that is
now foreign currency) transactions. He testified about
the few that he found.
[47]
He testified about exhibit C7(36).  On
5
th
May 2009 there is an entry headed Bills and Foreign Exchange, Forex
Sale Transactions and it has got a reference FXIB9556935 USD,
the
amount debited on the account was R1.891.500.  There is CAMS
transfer and it states cash for forex R900.000 into the account.
Also
two charges of R600 and R100 respectively forex commission standard
rate. There is a purchase of USD on 5
th
May amounting to R1.891.500. Having examined the bank statements the
witness did not find any other forex transactions besides
the
transactions mentioned.
Further
activities
[48]
In summary format the witness went on to
testify about count 55, the return marked B53, a VAT return submitted
for Super Brush (Pty)
Ltd for the period August 2008. It is for the
period July, August 2008.  It shows standard rated sales of
R917.000 and zero
rated supplies of R11.599.000.  Against that
input tax claimed of R1.510.000.  Then in December he found much
less traffic
on the account.  On 1
st
December there was R50.000 inter group transfer out of the account
and on 3
rd
December there was cheque no. 105 issued for R10.420 and on 15
th
December there were three payments of R17.000 each referenced monthly
cash.  The witness concluded that besides that, there
were no
transfers, no activity substantiating input tax of R1.500.000.
Monkor
Mangement Services bank accounts
[49]
Monkor Mangement Services bank accounts: There is evidence of a
similar pattern occurring, in the sense that there are cheque
swaps,
like can be seen on page C11 57.  There is a cheque deposit on
the 16
th
of November for R943 000.00.  Then, on
the same day, cheque number 477 is issued for R942 564.00.
The cheque,
reflected at page C11 90, C11 90,  a cheque issued
on the 29
th
of July for R1 099 560.00 and that
followed a cheque deposit into the account of 1 100 000.00.
Exhbit
EE
[50]
Entity 14, Square One Imports, counts 136 to 146, which the one set
of documents, filed under the so-called fourteen documents,
marked
EXHIBIT B Looking at the letter, EXHIBIT EE, this entity is referred
to in this letter. On page 43 of the bank statements
which is C14, so
it is EXHIBIT C14 page 43 there appears to be a forex transaction
dated the 22
nd
of December.  It is a forex sale
transaction FX, US dollars, R1 122 215.57.
Forex
[51]
There appears to be another forex entry at page 48, dated the 12
th
of June, forex sale transaction, FX, US dollars, R278 841.59.
There appears to be another one on page 50, on the 3
rd
of
July 2009, FX, US dollars R135 413.21.  Another at page 53,
dated the 11
th
of September 2009.  US dollars bought
for R263 206.82. Another at page 58, dated the 3
rd
of
December 2009.  US Dollars bought for R366 604.07.
The witness concluded that there were no other forex transactions,

besides the five transactions he just referred to.
[52] For entity 14 there
were 11 VAT returns submitted. Entity number 15, Amber Falcon, counts
147 to 160, there are no documents
filed into the EXHIBIT E.
Bank statements, C15, page 51, appears to be a forex entry.
Dated the 17
th
of February 2009, for the amount of
R31 248.90.  Another one at page 63, of C15.  The
amount of R31 754.90
was purchased, or forex was purchased on
the 21
st
of August 2009.  Another one at page 69,
six, nine, a transaction on the 10
th
of November 2009.
A purchase of forex for the amount of R37 709.58. There were no
other forex transactions besides these
three transactions. The bank
statements of entity number 15 Anglo Falcon, EXHIBIT C15, were
referred to.
[53]
The witness referred to two specific entries, the first one being
referenced transfer to C L Stevens the amount being

R40 000.  The second one being transfer with the same
credit card number ending 7058 which is also that for Stevens.
Then
on 30 November there is a general debit with the reference
transfer to C Steven the amount of R40 000. The
two entries
for 14 December the first one being a general debit referenced
transfer to C L Stevens the amount being
R50 000 and
the second one being general debit, transfer to the credit card
number ending 7058 the amount of R70 000.
Then 22 December
there is another transfer to the same credit card account of R25 000.
[54]
Mr Engelbrecht also testified about a cheque on C15 at page 92. It is
a cheque issued by Amber Falcon Properties 149 (Pty)
Ltd dated
11 June 2009 with cheque number 107. It is issued payable
to Van Lures, Cooper and Barlow and the amount is
R2 340 000.
It is signed it “seems to be by accused 3.” At page
59 of the same exhibit C15 the cheque
transaction is recorded on
12 June cheque number 107 in the amount of R2 340 000.
Van Lures, Cooper and Barlow from
his investigation is a firm of
attorneys in the Cape. The witness spoke to one of the partners there
Mr Hein Van Lures
who confirmed that this cheque was
payable to them for a property transaction. (This could be hearsay,
but I will leave it for
the moment)
[55]
The witness then identified a document, a declaration by a purchaser
for transfer duty purposes and it is in respect of a purchaser

Clifford Lloyd Stevens, ID number 5811075175088 and it is
in respect of a purchase of a property for the date of acquisition

being on 3 May 2009 for the amount of R2 600 000
and the property description is section eight as shown and
more fully
described as sectional plan number SS7/179 and the scheme known as
Monte Carlo Flats.  In respect of land
and buildings or
building situated at Camps Bay in the city of Cape Town. The copy for
the court's records was marked exhibit Z.
[56]
The witness received information from Watts, an affidavit from
Ms Watts in which she stated that Basfour 2367 was not

registered as an importer or exporter.
[57]
The witness could not trace any of the entities as registered
importers or exporters. The witness upon examination of the bank

statements did not find any entries in respect of forex transactions.
The witness testified about the bank activities of each company
and
in spite of the declaration of some million-rand sales for the
applicable VAT period there were only two pages that reflect
activity
for that two-month period in the bank statements. The bank activities
did not substantiate what happened as declared on
the VAT return. An
example would be the VAT return marked B 181, the VAT return
submitted for Sunmark International Trading for
the tax period
May 2009.  In this case there is a single month return.
So only for the month of May 2009 on
that return standard rated
sales of R960 450 were declared and zero rated sales which he
assumed are export sales of R9,2-odd
million and then there was total
input tax claimed of R1 451 494,08.  The corresponding
bank statement for that
month one finds at C17 page 48. The witness
had earlier said that the total input tax was R1 451 000
but that is divided
into two amounts one being R1 248 564,80
and the second amount at field 15 is R202 929,28.  Now in
the bank
statements one finds a cash deposit on 29 May of
R1 249 024.  On 29 May cheque number 31 was
issued by
Sunmark International it is for the amount of
R1 248 564,80, which is the same amount that was claimed
under field
14.  However, on 29 May that cheque was
dishonoured as being unpaid and the SARS cheque number 30 issued on
28 May
for R570,77 and bank charges and interest payments of R55
and R1110 there is no other activity on the bank statements.
The
witness concluded that one again has the similar pattern of a
cheque swap with a cheque going out used to substantiate or try to

substantiate the input tax claimed.
Agents
[58]
Importers and exporters make use of the services of agents, called
clearing agents. The practice is that the clearing agent
would submit
documentation to SARS or to customs for the clearance of goods. The
clearing agent would be invoiced and the clearing
agent would pay for
the customs duties and the importer would then pay the clearing
agent. Usually the clearing agent would request
the money for such
payment from the importer up front. In this case there is no evidence
of any payment to any clearing agent.
Even those payments that were
presented specifically as being payment of these duties and of VAT I
have shown that those payments
were simply cheques part of the cheque
swap, payment by cheque deposited into one of the other entity's
accounts or into one of
the entities also part of this group.
Central
Account
[59]
VAT and customs duty need to be paid by the importer so they would
have to find the money somewhere within their cash flow
to pay for
these duties, this VAT. The witness sais that what usually happens as
soon as the funds gets refunded based on the claim,
if there is a
refund, a person will find that money going to the bank account of
that business and being used to offset that cash
flow or that cash
that was taken out the system. This is not what happened here.
As soon as the money or the VAT refund was
received it was usually
transferred by claims transfer to a central account that central
account being CCG 183 CC.
What
was allegedly imported
[60]
The witness said that from the supporting documents, the waybills and
the SAD500's and the invoices the majority of items so
allegedly
imported were software but there was a few imports of or so called
imports of toothbrush handles or something to that
effect but it was
usually software.
[61]
For many years the duties on software were nil. At the time of these
imports there was a duty on the carrying medium.
So if the
software was imported on CD's then the value of the CD was subject to
duty and the witness said if he remembered correctly
it was at 10
percent. The documents or items were purported to be imported by SAA.
He saw from the schedules that the duties were
nil on software.
Software is usually sold via the internet and that is his experience.
You buy it via the internet.
Modus
Operandi
[62]
The witness tried to explain, assuming the state case is proved, how
the accused got away with this: “However, the audits
are done
by desk auditors who operate solely on face value on the
documentation that is supplied to them and if there is a pattern
that
is reoccurring and refunds are claimed in the similar fashion over
and over sometimes an audit would not even be done.
It is when
it becomes allocated to a more or to a field auditor where they would
then look at or to an investigator like me then
we drill down
further.”
[63]
Mr Engelbrecht clarified that the matter relates to import tax not
export tax, as he understands it both are interlinked.
When a
person imports goods, import duty is charged as well as VAT, and as
he understands it, that was the claim on which the import
tax claimed
was based.  As soon as any vendor in South Africa exports goods,
those goods are subject to the documentary requirements
being met,
are zero rated. If a company imports goods, then that is levied at
the time of import, if he has to concentrate only
on VAT. There are
no goods that can enter the country without VAT being levied.
[64]
The input, or the accounting for VAT by any vendor is a time based
accounting.  There are time of supply rules that are
in play
here.  There are two different ways of accounting for VAT, being
the invoiced based and the payments based method.
The payments
based method is a very limited based method, and it only occurs as
far as I am aware, to sole proprietors and CC’s,
and also where
the turnover is less than a threshold. Basically all VAT, or most VAT
is accounted for on the invoice bases.
So, if you have been
invoiced with goods in this month, then you can claim the input tax
and prove it on that invoice.  If
you only sell them next month,
and you have had no other sales, then you have got nothing to
declare.  If you are accounting
for VAT on the invoice bases, it
also does not matter when you get paid for them.  However, if
you do not get paid for them,
or if you do not later pay for that,
then you will have to reverse that at a later stage.
Version
for Mr Coetser.
[65]
Counsel for accused number two indicated her client’s version
by putting the following to the witness: “Sir, my
instruction
is to put it to you that my client’s entities had a long
standing arrangement with the company in America, this
company in
America to which you refer, for them, to buy on account.” The
reply: “Okay.  So, when did they pay
for that?”
Counsel then replied that she was going to ask him because he
inspected the documents. He answered that
there was no payment if the
invoice was issued, or payment should have been then a payment would
be reflected in the bank account
of Square One and it is not and
besides the fact that you are talking about two different legal
entities.
[66]
Counsel argued that there are payments but not at least, to the
quantum that we are talking about and put it to the witness
that
there is mention of Square One Australia.  The witness did not
investigate whether there were any payments from Square
One Australia
to the American companies. He do not have access to that
information.
[67]
Counsel for accused two then put this version: “I am putting it
to you, Sir, that the Australian Square One could have
paid the
American companies.  You cannot, at this stage say that there
were not any such payment, seeing the fact that you
are unable to
access the Australian, as well as the US companies.”
[68]
The witness said: “You are quite right.  I cannot rebut
that.  My issue though is, if there were exports to
the
Australian company, then as well, if that happens, those type of
payments have to be reflected in the accounting records of
any of the
South African companies.”
[69] The witness also
said: “I am saying though that if the Australian Company, if
Square One Australia pays the, a company
in America for the South
African company’s debt, then that debt payment, made by the
South African, by the Australian company,
has to be reflected in the
books of the South African company.  Then, the question must
arise in your mind as to why is the
Australian company not
interacting and purchasing from the Miami company directly?”
[70]
The witness was not aware of one occasion which the entities made use
of a clearing agent.
[71]
A company has no VAT implications if an end user in another country
is used but if the goods come into South Africa first then
you would
have to pay customs and VAT importation, Then, you sell those goods
to another country.  Have them exported at the
zero rate.
So, you can claim back the VAT that you have paid.  If the goods
come into a bonded warehouse and it is in
bond, then the duties on
that is not paid, at this stage, the duties and the VAT is levied,
when they get brought into a bonded
warehouse.  But, those goods
are like, those levies and the VAT is set off, once those goods are
proven to have left the country.
So, it is still levied, but
set off, once it leaves the country.  It is not paid, but set
off.  But, then, again, those
goods, when imported, are imported
with that purpose code.  It is like the same as someone brings
in goods for South African
Consumption, customs and VAT is levied.
But, they are brought into, in bond.  Only when those goods are
removed out
of bond, does that need to be paid.
Cash
cheques
modus operandi
[72]
The witness said he did also testify previously that those cash
cheques that they have picked up on, they found, deposited
in one of
the sister company’s accounts.  The
modus operandi
was that the cash cheque was deposited into another entity.  If
that entity also issued a cash cheque, it was deposited in
another
entity in all instances.
[73]
The witness could not say “for sure” that SARS did not
accept cash cheques before or after 2009 because he did
not
investigate that.  The witness said he would have to check what
dates they were, because at some point in time and again,
he did not
know exactly what date, SARS did not even have a cash office
anymore.  So, if you want to make a payment, you go
to the bank
and make a payment there.
[74]
A representative party, on the VAT forms is whom SARS holds
accountable. The documents in exhibit B reflected SARS stamps on
and
some differ from others.  B42 is a printout.  There is no
stamp on.  Most of the stamps say post received, or
received or
something along those lines.    The question,
regarding the receipt of documentation and not all documents
shown as
evidence reflect the received stamp. If documents are handed directly
to an auditor, they would not have stamped it.
The explanation
that he was given is that the VAT is a risk based system.  If
the risk is mitigated, then, then the payment
will be made without an
audit. If, if for instance an audit is done after each refund claim
is made and the explanation is always
the same and the documentation
is always the same.  Then there will be a time, when it is
accepted and expected that there
will be a refund.  He used an
example: A dairy farmer sells milk.  Milk is zero rated.
So, whatever inputs he has,
he will be able to claim, if he has paid
VAT thereon.  But, he is always declaring all the sales at the
zero rates.
So, he will always be in a refund situation.
So, they are not going to audit him every time.
[75]
The entities before court were not all audited, most, or the majority
did not have documents submitted, because there were
some audits
done, where notes were made on the system, but no documents retained.
The vendor or their representative would normally
sign a VAT return.
Exhibit B15 is an eFiling. The person that is registered for eFiling
could have given the person, who has eFiled
the returns, his password
and logged in on his password.  But, he is the responsible
person, because he is registered to do
it.
Concerning
Mrs Wright
[76]
If a person signs a VAT 201, where the person says: “I certify
that the particulars in this return are true and correct.”

Normally, SARS would hold that person liable for submitting those VAT
return.  The witness referred to B3, B13 as an example.
It is
signed by Wendy Wright.  He said they held Wendy Wright liable.
SARS applied for, through the police, a warrant
for her arrest,
because SARS believed that she was involved. The vendor is held
liable civilly.
[77]
Mrs Wright was a suspect but this changed at the time of the search
because subsequent to the search, they started interviewing
her.
They saw the documents that were kept.  He believed that she had
submitted returns, based on the information that
had been provided to
her.
Cheque
swops
[78]
The witness said “You will see on a number of the bank
statements the term “cheque swap” is used as a
reference.”
The witness did not know what was meant by the term
or what was written on the deposit slip. There were a myriad of
accounts that
the cheques were deposited into, or potentially
deposited into.  And, if there was a multiple deposit, then the
cheque would
be a part of the total deposit.  So, you could not
for sure know that that cheque was deposited into that account.
Concerning
Me Oliveira
[79]
Mr Engelbrecht  said the investigation of all 18 entities was
triggered when Me Oliveira investigated another company.
The accused
was contacted as the accounting or public officer of the four
entities and was requested to submit all supporting documents
for
that tax period.
Version put to witness
by counsel for Mr Coetser:
[80]
The group of companies made use of a central treasury within the
group. Payments done by one of the entities within the group
that
would administer all the financial bits.
[81]
The witness repied: I have not seen that account, and it would have
been out of the ordinary, let me put it that way, if that
was the
case. Because usually companies administer their books for each legal
persona.
Version
put to witness by counsel for Mr Coetser:
[82]
If the witness do not have sight of the accounting records he cannot,
or he is unable to comment regarding loans, intercompany
loans.
[83]
The witness repied: You get intercompany loans.  There were
references to intercompany loans with the transfer of the
VAT refunds
received.
Version
put to witness by counsel for Mr Coetser:
[84]
The witness did not have access to the US and Australian counter
parts, which still formed part of the Square One group,and
therefore
cannot comment on any intercompany loans in that effect. The witness
replied that he could not.
Version
put to witness by counsel for Mr Coetser:
[85]
The central treasury was run by the offshore company, which
administrated the intercompany loans.The witness replied that he
did
have access to any of the offshore company records.
[86]
The witness did  not follow up how much money was paid offshore
by Square One, the listed company. He did not see a direct
link
between that listed company and these companies. He investigated a
syndicate and there were no payments made from Square One,
the listed
company, to these companies or vice versa.
[87]
He did not recall having seen the import code 707070 on the
documents.  He added that  SARS VAT audit does not
regularly
speak to customs, had those systems talked to each other,
the whole scheme would not have worked. It is a loophole in the
system.
Evidence
regarding the stamps used
[88]
Counsel put the following to the witness: “The stamps that were
used, I know that there is a witness from SARS that says
it is not a
SARS stamp.Is there any expert that took a look at the stamps?”
The witness replied:”No, there were not.
The experts will
tell you that they compare apples with apples, not apples with
oranges.” Counsel asked :”These stamps
are still
available?”
[89]
The witness testified that they are not in his possession. The
witness confirmed that during the search some stamps were found
and
said:”if that is what you are talking about.” Counsel
said yes and then the witness answered that those stamps
were entered
into the SAP13’s and into the SAP13 by Colonel Pelser where
they stayed in the 13 and SARS did not take possession
thereof.
The
field auditors
[90]
The field auditors will not just look at that document at face
value.  So, if they receive a document purporting to be
a
supplier’s invoice, they may contact that supplier to
substantiate if that supplier actually issued that invoice.
Or,
if they received and SAP500 they might go to customs to go and audit
if that was legitimately issued.
Company
abroad
[91]
They did not contact the company abroad, if that invoice was issued,
and it purports to be an import, then they would go to
customs to
check of that importation was duly made and entered. On the odd
occasions, they may contact an oversees supplier.
But, there is
protocol involved in that, and they would not do it directly, there
is an office for that. There is protocol when
dealing with oversees
suppliers.
Oversees
payments: Version
[92]
The witness said if you look at all the bank accounts of the 18
entities, there are no such payments to an oversee company.

There were some forex payments, but those were negligible compared to
what austensively was imported.  Secondly, most of the
funds
were transferred into the 705 accounts, CCG103,  if he
remembered correctly.  There were no such payments to the

oversees companies from that account. “I am putting it to you
that payments were made from accounts abroad, not always from
a South
African account.”
The
witness repied:”Show me.”
[93]
The witness was cross examined on his investigation by referring to
Vigan Govender, team leader of the audit, and a Yolanda,
who had to
obtain returns from Krugersdorp. He received copies of documents,
sent by Wendy Wright that he attached to the Vigan
Govender and
Norman Moodley statements.
Manuals
pertaining to audit criminal investigations and the third manual
pertaining to documents or documentation received by SARS.
[94]
Counsel for accused 2 wanted Mr.
Engelbrecht to produce manuals pertaining to audit criminal
investigations and the third manual
pertaining to documents or
documentation received by SARS. The witness said that Ronel van Wyk
could bring it to court. The
court said she is a potential state
witness, that means the state can call her or at end of state case or
make her available to
the defence. Counsel for accused two applied
for a postponement in this regard, the application was argued and the
court made a
ruling in this regard. The court refused the
application.
CROSS-EXAMINED
BY MR MEYER
:
[95]
Mr Meyer asked the witness concerning exhibit J, he replied: The
purpose of the schedule was to show when cheque swaps happened
and
the month where the counts occurred. He did not interview Mr Meyer
nor the other accused. He interviewed Miss Joubert, not
Trevor James.
[96]
The court needs to point out that the witness, Miss Lynette Joubert
is know married and is Mrs Lynette Scafturis. The court
prefers her
new surname as this indicates her current status.
[97]
The witness was not cross-examined by Mr Stevens who appointed
counsel who withdrew and then he had no questions for the witness.
Recalling
of Mr Engelbrecht
[98]
On 1 December 2016 Mr Engelbrecht was recalled for the stamp issue,
as a witness. He testified that stamp number 4 of Mrs Sibande
was
destroyed.
Govender,
P
[99]
Mr Govender is a SARS customs official, based in Durban, he has been
with SARS for 25 years. He is an investigator in the Customs

Investigation Section. In 2010 he audited companies’ export and
import documents. He testified about the computer printouts
in
exhibit J. He looked at the system of which he only has a viewing not
editing function.
[100]
He took the serial number on the E 9(10), the SAD 500, serial number
3952 and in this case, it is the J 2 (05) exhibit. On
the said
exhibit one sees the serial number. But the J exhibit shows the duty
paid as R12 773.74. The importer code is 20412499
which is a
different number which belongs to Xiabawag and not to Copper Sunset.
[101]
He explained the “warehouse entries” that shows in the
importer/exporter column. Customs allows a warehouse to
make no
payment of duty till it is taken out.
[102]
The code is a once off code, for goods less than R20 000.00, the
7070 code. The system will generate a message if the
value is more.
Erroneous numbers will be rejected by the system and it will go back
to the client. There are two systems, he could
not verify between the
two. (NAT 67 and CAPE)
[103]
The witness said you cannot enter or access the data once a number
has been given. You cannot manipulate the system, he knows,
he worked
with this.
Legodi
,M.E
[104]
Mrs Legodi is employed by SARS, almost 12 years. She is an
operational manager. She testified about exhibit Q. Q1 is an invoice

with a SARS stamp, this stamp is wrong as it was not a customs stamp,
the word “Johannesburg “is not on the stamps,
there was
no Johannesburg office. At the time, she was at the Carlton Centre
they did not stamp any commercial invoices. It must
have a number
printed from on the document as proof of submission. Q3 is an example
of how the numbering is done.
[105]
Q1 and Q2 should not have a SARS stamp. The stamp was for O.R Tambo,
they did not do airports documents.
Maharaj
, A
[106]
Mr Arvind Maharaj works at the SARS laboratory with audit
investigations. He received computers from Nico Terblanche a SARS

investigation officer. He testified about the documents which are
signed when the items are collected, exhibit KK was handed in.
It was
handed to Wendy Wright and the witness who signed was Wendy Wright.
KK005 was by Mr Meyer. They operated on instructions
from a SARS
investigation officer. He cannot remember how he got instructions
from Mr Engelbrecht. KK006 was not completed fully
but he cannot
answer why.
[107]
Counsel for Mr Coetser put it to the witness that KK01 to03 was not
on the list of the search and seizure, he replied he could
not
comment on that, it would have been at the scene.
Oliveira
M
[108]
Me Maria Oliveira is employed at SARS, for 25 years. She is currently
a VAT auditor. She has been in the Audit Department
almost 18 years.
The process of an audit: a case is allocated; you send a letter of
engagement. You request documents and upon
receipt you look if it is
imports or exports. There are 4 types: Desk audit, in depth audit,
refund and field audit. She then explained
how it works. One hands
files over to “CI”, criminal investigations, once audit
has been done. For VAT refund claims
you do not need only three types
of documents, you need extra. SAD500, Air Waybill, commercial invoice
but also customs notification
that says goods are released and
sometimes proof of payment.
[109]
She became involved in this case when an auditor came to her for
advice, he wanted to see if Legacy I.T was importing and
exporting.
The case was allocated to her. This entity claimed VAT refunds, a
letter of engagement was sent 5 March 2009. She received
information
from Mr Meyer and she tested the exports. She did not receive
documents, referring to exhibit EE.
[110]
The witness audited about 18 entities as she sourced the documents
from SARS.  The reason being that she never received
documents
from Legacy IT Solutions. Documents she received from Mr Meyer were
SAD 500, invoice and Air Waybill.
[111]
The other entities were receiving refunds as well. She only does
audits, not criminal investigations. She does not gather
information
for criminal investigations, nothing prevents her from continuing
with an audit even if it has gone to investigation.
When documents
were requested mr. Meyer was not a suspect.  She also did not
suspect fraud.
[112]
After receipt of the documents from Mr Meyer she found the exports or
imports did not take place. She did this by testing
it on the customs
and cargo website. She tested the other entities as she wanted to see
if the same thing was happening in other
companies because Legacy was
false. The entities did not provide her with documents so she was
forced to gather other audit files
from previous auditors.
[113]
She was shown exhibit file 10, recognized the auditors and said she
received the documents from the auditors. She received
the same type
of documents, sometimes there was a customs stamp on reading “NA
Office” for customs, yet there is no
office like that. She also
tested the name NA on the system, it is non-existent. An example is
E9(28) and another example is E
9(16).
[114] She tested the SAA
Airwaybills, none were found. She handed the case over to “CI”,
she thinks in January 2010.
You hand over by giving a notice but you
still continue with the audit, she handed it to Riaan Engelbrecht.
[115]
Before the audit she had no suspicion of irregularities, she wanted
to test the other entities to see if they were doing the
same. She
visited Mrs Wright but not Joubert. She also visited Joubert but it
was not a field audit, merely to collect her documents.
She did not
suspect irregularities. She received two lever arch files from a
certain adv Van Der Westhuizen. Riaan Engelbrecht
was present. After
you have handed over to CI you may not give further documents. She
next referred to exhibits in the E file,
E9,E193, E 197, E73. All
letters regarding the audits.E22 (10) and also to C3 (50), bank
account: Her conclusion: “I could
not find any trading, only
inter-company  transfers”. She never saw the accused as
suspects, she is not supposed to
engage a vendor and said if she
suspects fraud, CI will contact the vendor.
Scafturis,L
[116]
Mrs Lynette Scafturis, formerly Joubert, knows the accused.  She
was 17 years old when she started working for Mr. Coetser
or as she
said strictly speaking the group, Square One Group Ltd.
[117]
The witness was not employed after 2010 when “news broke in the
papers about the VAT fraud.” She left the company
as a
financial manager, after 19 years. The company was placed in
voluntary liquidation. She reported to Trevor James at the end,
her
direct managers were Anton Meyer, Hayden Brown, Grant van der Riet
and Trevor James. She was in charge of the VAT returns,
she dealt
with entities 3,4,9, 10 and 14.
[118]
She initially did VAT returns manually but in 2007 she did it via
efiling. In May 2010 she received a call from Mr. Engelbrecht.
That
was after the arrest of accused 1 and 2. Her surname changed after
her marriage and her affidavit, dated 8 March 2011 still
under her
maiden name. She completed the VAT returns for the 5 entities.
[119]
Exhibit K 18 shows the active user as Mr. Meyer, Square One Documents
Solutions, efiling. Exhibit K 51 shows the active user
as Mr. Meyer,
Square One Power Solutions, efiling. Exhibit K 133 shows the active
user as Mr. Meyer, Activated Learning Group,
efiling. Exhibit B 22
(1) is a VAT return. There was a name swop, it was a common thing in
the group. She submitted this return.
She submitted B22(2), B 23 (1)
B24 (1) B76 to B95, those are for Square One Documents and Power
Solutions. B14 is Legacy IT Solutions.
B 76 (1) is for Square One
Power Solutions (Pty) Ltd.
[120]
The witness got the information for special import deals from Mr
Meyer. He gave the figures, when audited he gave the supporting

documents. Mr Coetser was also “pretty much involved.”
She only ever received 3 pages from Mr Meyer and Coetser. For
various
intern suppliers in the group she would receive 20 pages consisting
of shipment documents and multiple other documents.
[121]
The three pages consisted of a supplier invoice, airwaybill SAD 500,
a few times an original,  which was strange to her
as for all
others you received the duplicate copy. She confronted Mr Coetser as
she was concerned about the documents, he told
her not to be
concerned. She asked him if it was genuine and he said there was no
need for other documents. She did not ask Mr.
Stevens. She also asked
Mr Van Der Riet her direct line manager.
[122]
Mr Meyer left the group for reasons unknown to her, he took over
Square One Power and Square One Documents Solutions, she
dealt with
Mr Meyer when he was no longer in the group. The entities were still
on her profile, the internet banking system was
on her name. She
removed herself after May 2010, she requested from Mr. Meyer. She
corresponded via email with Mr. Meyer. Mr. Meyer
was her line manager
at one stage, Mr Coetser was the chairman of the group, he was not in
the same building but only in later
years.
[123]
Mrs Scafturis knew of Mr Stevens, as someone who works for SARS, she
gave him information about refunds, case numbers, documents,
his
involvement was small.  She was not surprised when told Mr
Stevens did not work for SARS, she said: “it would not
surprise
me”.
Square
One group of Companies:
[124]
Mrs Scafturis testified that Square One Power did UP’s and big
diesel generators. Square One Document Solutions was
a distributor of
Xerox printers and consumables, local distribution. Activated
Learning had training material.
[125]
Square One Imports was for electronical stuff, she was surprised that
they were not registered with customs as they were an
import and
export company.
[126]
She mentioned the countries for exports and imports. Goods that were
imported were stored at Square One, those were the 20
page pack
goods. The three page goods were not seen, she only saw one box
metamap software in the warehouse which was there for
about ten
years. She went to Australia to set up Square One Australia. In
Australia she uncovered a fraud by the managing director,
Steve. She
reported this to mr. Coetser, the company traded as a loss, illegal
in Australia.
[127]
She raised journals to Miami 2007 to 2010, under instruction, there
was no support on the bank statement to prove that payment.
[128]
Cheque swaps were done around the 3 page imports. She was contacted
by Wendy Wright in this regard. She said: ”We would
arrange
cheques in their account , they deposit a cheque in our account. Most
times what would happen when we need to issue a cheque,
not funds,
relied on their funds.” She said also asked to raise cash
cheques. She always acted under instruction. All info
came from Meyer
and Coetser.
Apple
was for the personal use of Mr. Coetser.
The
attachments for her affidavit was taken up in Exhibit “L”.
Exhibit
“L”
[129]
Mrs Scafturis testified concerning exhibit “L” by
referring to the contents thereof: She said L5(4) was from Anton

Meyer. L5(006) and B79(2) matches, the  email reads : “greetings
from Santorini” and amounts given , from A Meyer.
L5 (008) and
B81 (1) and (2) matches. L009 says “please keep this between
you and me” from Garth. L10 reads : “writing
for the
documents from Cliff, should be tomorrow.” She called these
documents “the 3 page documents”. She continued

explaining the exhibit L , referring inter alia to L11 where Mr
Stevens was also included in the email, he was cc’d in. In
L12
Maria D Oliveira asked for documents. It was a VAT audit.  Jenny
Faber drafted a response. The witness said :”Garth
and Anton
were involved”. L15 is an email to Cliff Stevens. L16 : “Hi
Garth, Clifford asked me….”. L18
and L19, Jenny Faber
has a letter .L26 and E23 (1) go hand in hand, L26 and E 22 (07) ,
L26(4) and E23 (2) L40: Garth responded:
“after Cliff gives me
feedback” L47 reads: “Hi Anton…long list of
documents.” L50 to L64: Documents
received from Mr Meyer.
Stamps
[130]
She said concerning stamps: “When putting out in prep for an
affidavit, you get the same trend with documents”
[131]
She went on testifying about the “L”exhibits: L51 dates
in middle is double. L66 date is upside down. L51: This
address is
the one of 2002, yet this is May 2008, Darrell lived in a different
state. L56: address is identical to Nigeria Independent
Electroral
Commission. L50 and on: each had the same stamp. L68: Please
transfer…lines up with bank statement, Exh C9 (23).Exh
L (77)
“cheque swops” Anton: We are doing some cheque swops
today..” Garth asked for a cash cheque.
[132]
Cash cheques were deposited many times in CCG. Exh L (94) Anton asks
for a cash cheque, reply: :Code it to hiding”,
transaction
written off, coded to cost of sales. “Hiding” means make
the transaction disappear. Some emails from Anton
refers to “LC”
which was a nickname given to her by Anton, Laura Craft, wore gym
clothes.
[133]
Still on the “L”exhibits: Exh L 96: Anton asks for a cash
cheque, said Clifford will collect. Clifford either
dropped off
documents or he would collect documents. L100: “Once done
please destroy the spreadsheet”. L101 is the
spreadsheet, she
never asked Anton for the reason why she had to destroy it.
She
has emails back to 1998.
Still
on exhibit “L”: L117: Cliff asked to split. (Email Anton
to Lynette)
She
always looked up to Mr Coetser from an early age.
She
referred to her affidavit, par 27, about a tax clearance
certificate.  It was declined, Jenny Faber tried, Mr Coetser
managed to get it, yet there were outstanding amounts.
[134]
In the latter years Mr Van Riet issued cheques and knew they would
bounce. (This is hearsay evidence.)
Mr.
Meyer cross-examination
[135]
Mr Meyer put it to her that she was closer to James than to him, her
answer: “putting to you , you are wrong, you had
a nickname for
me, he didn’t.” Mr Meyer referred to the 2005 financial
results, said amounts were reflected in it,
referring to L100 : her
answer: “O.K.” Referring to Square One, she said the
organigram changed the whole time. There
were auditors. Garth and
Siswe would know.Square One was listed in April 2000. She was a
shareholder. L101 and 102 was created
by her when Anton asked her to
do it.
Cross
examined by Counsel for Coetser
[136] Mrs Scafturis
explained her interaction with the liquidator who was appointed in
the listed company, he requested a debtor’s
list, at the most.
He did not ask for the laptop, which she says is a company asset. She
said it was rare to have site visits,
Maria Oliveira did one in the
end. She does not know which VAT forms she did, she followed
instructions from a senior. She received
email instructions for every
company. Wright had nothing to do with their companies but they did
interact with regards to cheque
swops and other matters.
[137]
It was put to her that she only has ad hoc copies on the business
laptop. She was asked how did she determine which ones to
keep. She
replied that she did not determine which ones to keep, the laptop is
available.
[138]
All information for the companies came from Mr Meyer, the 3 pages,
the follow-ups on VAT returns and the cheque swops. She
said she
coined it “3 page specials.” When asked what is so
special she replied “Hindsight is an amazing thing,
they all
stand out now.” It was the norm to hand 3 pages in, but all
other documents had more than 3 pages.
[139]
She was only aware of payments or transactions between Australia in
2001. Biometrix was Miami.
[140]
The documentation came predominantly from Mr Meyer she cannot
conclusively say from Coetser. She became suspicious and queried

Coetser who said there were actual documentation.
[141]
It was put to her that Coetser never bought companies, she replied in
terms of his structure he did, but it was his issue,
not hers.
Documents from Meyer were cc’d to Coetser.
[142]
Counsel interrogated the witness at length about the listed company.
Also about the Australia business. She was asked about
L68 the CCG
Clients account, it was put to her that it was indeed a loan account.
She replied great, she did not have the support
documents but she
would have asked for the allocation. Concerning L 26 the attachments
could be on an older laptop.
[143]
She believed that Mr Stevens was involved as Mr Meyer said he was
waiting for documents.
Version
[144]
Mr Coetser’s version was put to her as being that the risk of
company auditors are at stake, Mr Meyer is to come and
testify, all
transactions were included in the audit, there was nothing
suspicious. She disagreed, she said it was clear that there
were
intercompany debtors and creditors, Mr Meyer alleged it was a profit
but he negated the profit.
Version
[145]
Counsel then said that it still shows a profit. She said the
spreadsheet showed an alleged profit, the cheque swops give the
money
back, she therefore disagrees with the inference that the profit was
left there. Counsel then said that the witness is not
an auditor. She
replied that the emails shows there was no cost of sales. It was
deemed to be no cost of sale.
Version
[146]
A version was put to the witness that Mr Coetser would rather give
bank statements to SARS than cheques. She replied: “Interesting.

The cheques were cash instead of SARS.”
Version
[147]
Counsel also said that the witness never raised the concerns with Mr
Coetser. She disagreed.
[148]
Mrs Scafturis also said that counsel for Mr Coetser opted not to look
at any other exhibits and out of 30 she could only pick
up 2 [to ask
questions about] but concerning the other 28 counsel [for Mr Coetser]
kept quiet about.
[149]
The company, CCG was a debtor and creditor, the profit was identical.
A balance sheet entry is part of what happened in Coetser’s

loan account. She was not confusing cash flow with profit and loss.
Then there is no point to do a cheque swop.
Version
[150]
It was also put to her that the audited financial statements showed a
profit. She disputed that, she said the cheque transaction
existed,
the schedule alludes to one part, not the other part.
Version
Laptop
[151]
It was said that all her evidence was hearsay evidence because she
could not be fully tested without counsel inspecting the
information
on her laptop. She replied that she had printed the information, the
information reality exists. She was more than
happy and would love to
hand it over to the state. ( The court ordered that the laptop be
handed over to the investigating officer,
17 October 2016 and counsel
could inspect it.)
[152]
On re-examination the witness confirmed that the Square One listed
entity was not part of the charges.
Schoeman
,S M
[153]
Mr Schoeman is employed by the South African Airways in the cargo
division. If the SAA carries cargo, then the documentation
would be
an airbill, a manifesto called air cargo manifest. If there were
goods coming in, the general rule is that a sales agent
would act on
behalf of the client.  The account holder would get a range of
airbills, bigger agents have their own system.
If one imports, i.e.
from Miami, then one must be registered with/as  “TSA”.
The documents could be electronically
transferred.
[154]
Exhibit E 9(9) is a SAA Airwaybill. But the following problems are
encountered with this Air Waybill: No goods description,
you cannot
ship if the contents is  wrong.  Agent’s code is
wrong, it should have started with “001”.
No issuing
agent’s name .The SAA did not do flights from Miami! It was
terminated in 1999. No routing information. The carrier
is SA not
SAA. The final destination is not mentioned. The goods description
and weight cannot be edited once on the system. The
number of pieces
is quite large, 26 is mentioned.  The aircraft contains baggage,
passengers, so weight distribution is very
important.
[155]
Concerning exhibit “M” the witness testified: The witness
investigated 91 Air Waybills and “E” exhibits.
None of
these were recorded on the system, he did an additional audit and
found no skipper or consignee on his system. None of
the Waybills
were accepted by SAA or a third party. None of the entities appeared
on the system. An example: E21 (67) is an export
to Greece, SAA does
not fly to Greece.  The agent code must be on it, it is not on
it. Incomplete bills are not accepted.
Goods description are in the
wrong place. 5800 kg is too heavy. Another example: E21 (87) shows no
routing information. The weight
is  24750 kg , much more than a
flight. He did the spreadsheet.
Sibanda
B
[156]
Me Brenda Sibanda is employed at SARS, Customs, for 29 years as an
administration officer.  She receives documents from
clients.
She has an official stamp which was only allocated to her, it has a
number and she is the sole person to possess
a key to the safe. She
testified concerning exhibit EE. The stamp print is not the same size
compared to her stamp. It is smaller
than her stamp.
[157]
She testified that exhibit “EE” is a letter with a stamp
on it, it is signed by Mr. Meyer and addressed to SARS.
She was
assigned stamp 4.
[158]
Concerning exhibit P she said that P 001 is a register indicating
stamp 4 being issued to her. The witness at first could
not identify
P 001, but when referred to it as (a) which it is, she recognized (a)
and (b) as a spreadsheet which indicates what
she received, with her
signature at the end. Concerning P 002, which is the same as EE, she
said she do not receive things not
related to auditing.
[159]
This witness was at first confused about her affidavit. Counsel for
accused two put on record that the State and the Investigating

Officer and the witness had a discussion during the lunch break, the
state explained that her statement was re-read to her.
[160]
The witness testified that all pages must be stamped, on “P”
only the first page is stamped. The witness testified
that she could
not trace her stamp anymore, it was too long ago, although she tried.
The register was also destroyed after five
years. She insisted that
she would not take documents in which is marked for audit.
[161]
The court may mention that the exhibit with an imprint of her stamp
is on P005, it is  55mm by 35 mm contra the stamp
imprint on
P002 which is 48x32 mm, the naked eye can see the two imprints are
totally different. But the court must decide on the
probative value
of this exhibit.
Viljoen
C
[162]
Mr Carel Viljoen is employed by SARS and is a specialist technical
support officer, he managed customs operating systems.
The
administration employees and users are given a unique “S”
number. A user’s number has to be registered and
there is a
specific IP address. There must be a Bill of Entry number. If a
transfer was not successful, then it will not be transferred,
there
are error methods in place. He would have known if the system was
hacked as he has been on the system for 32 years.
Watts
A
[163]
Me Arnita Watts is an operational specialist at SARS, she identifies
high risk entities as she works in risk management. She
works at SARS
going for 17 years.
[164]
Me Watts had to verify 19 entities. Four of the entities were
registered for imports and exports. The period in question was

January 2007 to March 2010. The entities registered are: Square One
Imports (Pty) Ltd, Monkor Management Services (Pty) Ltd,
Multicupboard
(Pty) Ltd, Superbrush (Pty) Ltd.
[165]
Me Watts testified that exhibit H is a schedule drafted by herself. H
29 reflects the filtered information of Square One Imports
Pty Ltd on
the United States. It is listed date wise from the oldest to
youngest, starting in 2007 ending March 2010. H 30 shows
the customs
value from highest to lowest. The highest being R1 061647, only one
more than a million, from number 4 all  are
under 500 000.
She read the summary: The value or total is R13 993 821.00
and the VAT on it R2 204 578.46]
[166]
The witness compared this list with the “B” exhibit. B136
is a copy of a VAT return for 2007, she could not find
any exports.
B138 she could only find two exports, one for R710.00 and one for
R30.00. In H 10 Coetser is reflected as the director.
Concerning H31
she said if Monkor used the code, the system would have rejected it.
Monkor was only registered for imports. Concerning
B115she said that
Monkor could not claim for exports. Not on the code allocated to
them. B120: There was no claim found under this
code, the claim was
for R9 248 000. B124: There was no claim, R10 403 500.
H31 is a summary of Monkor management
Services Pty Ltd, the totals
are R538 776 imports and VAT R85 613.92. H23 to 27: The
other 3 registered entities showed
no imports
[167]
Referring to some E exhibits, Watts investigated them: E115 (3) E 115
(6) and opined that the SAD 500’s were incorrect:
There are no
importers codes, the agent left out, being a compulsory field. If
these were entered it would automatically be rejected.
The system is
reliable, she used it for 15 years.
Version
[168]
Counsel for Mr Coetser put it that the group of companies might have
more than one code: Watts replied: “yes”.
Counsel also
said she could not verify the integrity of the data and Me Watts said
it was not her responsibility.
Wright
W
[169]
Mrs Wendy Wright  was employed as bookkeeper by Monkor
Management. She was arrested at 38 Monkor Road on 6 May 2010.
Charges
were later withdrawn. She worked for Monkor Management and “all
the other companies Mr. Meyer had”. She was
granted bail and
returned to work. Mr Meyer was also arrested. Mr Coetser was not
available for the arrest, nobody knew where he
was, he disappeared
for two weeks. She stopped working at Monkor round about October
2011.
[170]
Mrs Wright  said she was arrested because she signed a large
number of the VAT returns. Her main functions were to see
that staff
got paid, levies paid, for other entities she did the submission of
VAT returns. She completed the majority of the VAT
returns and
received the information from Mr Coetser, Stevens or Meyer. They used
various ways, emails or the grey box which was
couriered from and
between Mr Coetser’s residence and the office.
[171]
Mrs Wright testified that returns were always mailed. In exhibit B
the VAT registration for CCG carries her signature. The
state
produced Exhibit GG 1 to enable her to refresh her memory about the
names. There were no objections.
[172]
Mr Meyer was introduced as a business partner and the brother in law
to Coetser. She was the bookkeeper but not for all, Mr
Meyer was at
Square One and Miss Joubert did the books. The returns per VAT 201’s
were submitted and signed. The driver would
take them to Megawatt
Park. The majority were refunds being claimed.
[173] She received
instructions via email. If Mr Coetser was there then obviously
verbally. Mr Coetser had an explanation, you never
question him.
Michelle Why was also involved. Mr Coetser explained that the goods
landed at customs and were moved on to other
entities in France and
other places. The financials were done at that side. He said goods
were imported and exported to France,
Germany, England, and
Australia, she could not remember other places.
[174]
The goods imported were biometric equipment, toothbrush handles, from
what she could remember. She saw some boxes. Meta maps
and samples
containing toothbrush handles. She never saw pallets.
[175]
She raised the invoices from import documents given to her from one
of the 3 accused depending on which entity it was. Mr
Coetser would
email so that she did everything under instruction.
[176]
She would do cheque swops, instructed by email, from one entity to
another, to the companies they worked with. Mr Coetser
told her to
clear the accounting system. She received instructions to make the
swop cheques out in cash. The driver would take
cheques for the bank.
[177]
The documents she received had SARS stamps on. She never saw SARS
stamps at her office.
[178]
Mr Stevens was introduced to her by Mr. Coetser. Mrs Wright was told
that he works at the airport at Excise. Mrs Wright said:
“So
was Cheryl.” Mr Coetser also informed her that Stevens was a
co-director at Amber Falcon Properties and Copper
Sunset. Stevens
frequently visited the offices and brought documentation to submit
for him or to collect documents or invoices.
[179]
Concerning exhibit WW she testified that she raised cheque swop
invoices and waybills. She stored documents in a file. SARS
or SAPS
might have taken the file. She kept all emails that Mr. Coetser,
Meyer and Stevens issued instructions on. She kept them
for her
personal reference as they were becoming extremely edgy that there
was so much money involved.  She printed the emails
for her
records and put them in a file which she kept in her office. She took
the file with her after being released on bail, she
found the file
still at the office. She gave the file to her attorney, Combrink, she
did not amend or alter them. Documents were
printed over a long
period.
[180]
She said that exhibit “WW” represents extracts of some of
the emails. “WW” 17 (1) is a billing schedule
sent by
email. It was sent by Coetser to her. It reads: “Hi Wendy
please prepare the invoices for Jan exports as per the
attached. Once
checked please send to Cliff. Thanks Gac.”
[181]
She said WW(1) (a) and (b) were documents attached with schedules. WW
24 (1) is an email and comes from Garth Coetser to Wendy
Wright, the
subject was “Inter Company July 2008.” The contents dealt
with change of format and an address to be varied.
WW 24 (6): The
total VAT claimed R5 156 250.00 for Basfour which is the
same amount in B 161.WW24 (7) tallies with B125.
The handwritten note
on this is her handwriting. WW 24 (12) and B117, VAT for Monkor,
same. WW26 is an email from Coetser to Wright,
it was about ”July
VAT inputs.” The amounts for July are given for Sunmark, Amber,
Monkor Management, Superbrush, CCG
Investments, and Coetser says: “I
will track the docs down when I return – so please claim in the
interim if the vat
period is due  Jun/Jul 25
th
August
or Jul if monthly”. She said returns were submitted and “fairly
often amounts without invoices”. She said
WW 39 was again an
email from G Coetser which lists companies and amounts and says “docs
to follow”. The court will
merely quote the first one: Amber
Falcon R1 249 454.50, there are 7 others.
[182]
Concerning WW 43 she testified that it is an email from Stevens which
instructs her not to send one single document to Oliveira.
The bottom
email on the same page says to Stevens: received “R
1 212 583.19 for GAC Man Con.” She was not
sure why
Stevens said it was not send, Oliveira was an auditor, they
frequently had an audit. About WW 44 (1) she said Moodley
sent to her
requesting proof of payment. He is from SARS, she assumes an auditor.
She sent this email to Coetser and Stevens with
Stevens replying.
Apart from stating that he spoke to Moodley’s team leader, who
guided him in the process. The reply which
she had to give was: “All
export invoices are VAT ZERO RATED. We fail to understand how the
payment of EXPORT invoices worldwide,
got any bearing on VAT claim.
We have provided the necessary bank statement, which prove Multi
Cupboard remit the VAT. Arrangements
between Multi Cupboard and its
Clients and proof of payment DO NOT NOT SUSTANTIATE payment VAT. We
fully hope and trust that this
matter is resolved and hope we can
expect payment of VAT. Cliff.”
[183]
She said WW 45 (1)-(3) is an email from Stevens , she was not to
lodge Basfour if the amount was more than R2 million. In
her evidence
she also referred to WW 55 and WW 59, WW 59 which was to Anton Meyer
where she said they need to do payments from
Imports, a cash cheque,
she explained that Coetser would instruct her to write out cash
cheques and deposit them in the said entities’
bank account.
Stevens dealt with the documentation.
[184]
Concerning WW 62 (1) and (2): Wright says the cheque books are here.
He replies by asking for VAT numbers for certain entities,
referring
to her by saying “Hi Doctor”. WW 63: Meyer mentions a VAT
billing schedule received from Coetser and asks
her for VAT numbers,
company numbers and addresses. The companies are: Basfour, CCG
Investments, Sunmark Factory, Sunmark Farms,
CCG 119 Investments, GAC
Management Consultants. He asked for it because he was going to do
the invoices, the companies were taken
from their offices to his.
[185]
WW 70 is an email from Coetser to her and Meyer. The topic is cheque
swops. Coetser says attend to the cheque swops as per
the attached
and asks that the instructions for the transfer from Investec be
emailed. Cheques to be cash and cleared with Sharron.
She does not
know why the cheques had to be “cash”.
[186]
Concerning WW72 she said she sent an email to Stevens and Coetser
asking for information which was required by Mrs Groblaar,
the
information required by her,are: Customs code/export number; How are
the goods exported? Air or boat. And she says: “I
have given
her the countries where they are exported to. She is only looking at
September at this stage.” Stevens replied
with a
code:”70707070” and said “All goods are exported by
air, hence the Airway Bill.” She testified that
Mrs Grobbelaar
is a SARS auditor.
[187]
WW 77 is an email from a SARS auditor namely I Moodley, asking for a
customs code which Stevens then provided per email, “70707070”,

remarking a new code would be forwarded month end upon receipt. WW 80
is another email from a SARS auditor, Earnest Maphumulo,
who is
described to Stevens as “this man is not accepting just
invoices he wants all the questions below answered or they
can pay
out.” Stevens then replied to this, see the exhibit. WW 81 is
another email from the SARS auditor, Earnest Maphumulo,
who was not
satisfied with the answers given. Stevens replied inter alia that the
documents had no bearing on VAT, the vendor must
prove to SARS that
VAT was paid and the bank statement and SAD 500 “proof that”.
WW 90: Coetser is asking for refunds
and saying “Cliff says
they may come in during the day.” She did not know how Stevens
would know about this but said
he worked closely with SARS or at
SARS.
[188]
Wright frequently received SARS audits because of the nature of the
refunds, being large. She attached supporting documents
namely the
invoice, waybill and an import/export document. She fairly frequently
transferred money to Miami on instructions from
Coetser. Done by IME
invoices to a bank in Miami. Coetser went to Miami at least three
times per year.
[189]
E 9 is a letter signed by Wright. E 9(3) is the I.D. of Stevens, yet
Stevens was not a director but she was told he was. E
9(50) is a
cheque which she wrote out and put in different accounts.
[190]
Cheque swops were done by transferring a similar amount to the VAT
claimed.
[191]
At this point a point of her evidence, an
in limine
point was
made about her facebook status stating she is unemployed, yet she
said she was employed. The court did not hear evidence
under oath, if
the parties want to then they can proffer legal argument.
[192]
Wright wrote and signed E (9). She testified that C8(12) the amount
of R65 000 was paid to Mrs Snyman, Coetser’s
wife. C 8
(47) shows a payment she made to Mr. Coetser. E 169 (5) was also
discussed. IME transfers to Miami was done and she spoke
to a Mr
Solomon in Miami.
[193]
Mrs Wright was cross examined at length by counsel and both
unrepresented accused. (Mr Stevens was unrepresented for some
time.)
[194]
Mr Meyer asked Mrs Wright about her employment history. Mrs Wright
said that she was employed by Monkor Management and a host
of other
companies. She worked for ten years and left sometime in 2010 or
early 2011. The search and seizure took place on 6 May
2010, they
took everything except her file in the corner of her cupboard. They
worked from a list. It was very fortunate for her
that they did not
take her file.
[195]
She said that Michelle Why shared the office with her. Mr Meyer put
it to her that she left in October 2011 and she said yes
Mr Coetser
reduced her salary and she left. It was put to her that it is a
fabrication to say she had 3 “bosses”: she
replied: “I
was reporting to all 3 of them. I might have misconstrued that but
took instructions from all 3, primarily.”
[196]
Mr Meyer asked about doing the books from trial to balance sheet,
about the search and seizure. She was questioned on her
becoming a
state witness, she said there was no deal, she was not fighting for
her innocence. The printing of documents was also
questioned, she
said she printed a lot of documents, maybe from her lawyer’s
office, she cannot state exactly. She was advised
by her attorney to
collect evidence, after being released on bail.
[197]
Mr Meyer disputed Wright’s testimony that she collected
documents in bags. He said he fetched all the documents and
so did
Ramsamy. She said no, she and Michelle went to fetch documents.
[198]
She initially did not print the documents for evidence. Some were
printed before the search and some after.
[199]
Mr Meyer put it to her that he took over the companies handed for him
to do in August 2009: her reply: “Thank you”.
Version
[200]
Mr Meyer put it to her that she made up stories, she might have
printed a file for her own experience but she had no access
to the
evidence: The court assumes that he was saying this because of the
computers being seized. Her reply: “I object, it
is incorrect.”
[201]
When cross-examined by counsel for Mr Coetser she said that SAPS
never took all the files, they were very specific.
[202]
Counsel said that not all documents Wright had, were printed before
the search and seizure: Wright replied that she could
not remember.
She printed on instruction from her attorney. Mr Coetser told her how
to do a VAT return.
Version
[203] It was put to Mrs
Wright that Mr Coetser never taught her, she replied: “I am
saying that he did.”
[204]
It was put to Wright that she did not have a suspicion? She replied:
“Not so.” She explained that she spoke to
others in the
office and to two young auditors. Her basis for suspicion was the
audits. Mrs Wright had a file which the SAPS did
not take.
[205]
It was put to Wright that her interview with the Investigating
Officer was on 27 May 2010. She said that she could not remember
the
date.
WITNESESS
FOR MR MEYER:
Arendz
JO
[206]
Mr Justin Osman Arendz is employed by SARS, Megawatt park in the
Computer Forensic Lab,he knows Mr Maharaj,they work in the
same
department. He was present at the search and seizure. Only in an
advisory capacity. They only make contact with the client
who in this
case was SARS. The procedure would be done by email or phone call.
They would not contact anybody except for the investigator.
He could
not recall Mr Ramsamy but recalled that an Indian person with mohok
hair and lots of jewellery came to collect computers.
Mr Maharj was
the team leader for the search and seizure. The way the file for the
return of the computers was done was not as
they were trained to do.
Faber,
J
[207]
After confirming that Mr Meyer waved his rights to privilege of
lawyer, attorney Jenifer Faber testified that she was advised
to
collect computers from SARS. She was not familiar with the diary of
an investigating officer which was handed in at the trial
within a
trial. She attended meetings with James and Alan Toweel was there.
She dealt with Oliveira many times. Mr Toweel was bombastic.
But they
attempted to get a deferred arrangement. She signed exhibit KK 004.
She did not draft the letter purports to be Mr Meyer
in Exh E21 (92)
(i)
Phanyane
B
[208]
Mr Nelson B Phanyane works at SARS as a manager of the digital
forensic laboratory. Mr Meyer asked him to explain the procedure
when
he partakes in a search and seizure. The witness then replied that as
SARS officer he was not going to respond (saying “not

competent”) on procedures. He did not deal with computers. He
then answered in general terms to some questions asked by counsel
for
Mr Stevens.
Why,M
[209]
Me Michelle Why said she was a bookkeeper to Wendy Wright. Wendy
instructe her in all aspects. After the search and seizure
all
instructions came from Garth. The work was still the same. Wendy was
not there for a while. She was present in the office at
the time of
the search and seizure. SARS wanted a lot of stuff and asked a map
indicating “who sat where”. Wendy was
arrested. They
asked her for the fake stamps. They took all files in the office,
cupboard in the passage and bathroom. She could
not remember about
files not taken. She did not  know about Wendy’s file with
the emails that were not taken according
to Wendy.
[210]
Me Why said she was with Wendy to fetch the file at Megawatt Park.
This was done 2-3 weeks after the search and seizure. They
connected
it again. No access to emails. She got documents from her computer
after it was returned to her when SARS asked for them.
She did not
know when Wendy’s file was printed. Wendy did not speak to her
about concerns as to how things were done, she
also submitted VAT
returns. After the search and seizure she did the Vat returns, Mr
Coetser instructed her.
[211]
Wendy said “Garth told me” how to do “stuff”.
Everything was marked per company, she cannot remember
if there were
files left after SARS left.
[212]
When they collected the computer, they received a phone call and
Wendy said they can go and collect it. She made a statement
and gave
information as far as she could go back. She looked for documents
which she found “either in emails or in the files”.
[213]
Counsel for Mr Coetser put it to the witness that the SARS documents
were not returned to the offices but taken to the Marlboro
warehouse,
she replied: “It could have been the current stuff that I had
at the office.” They always had to to a print-out
in all
transfers so that they knew what was paid. She made a statement on
20
th
September 2010, counsel for Coetser said the files
were returned in December 2010 and she replied :”We print from
the system,
go to that day and we print, go into FNB, choose a pay
out, get it.” Wendy told her that she got instructions from Mr
Coetser.
Me Why said she herself made a statement with annexures in
excess of 57 pages.
WITNESESS
FOR MR COETSER:
Du
Toit M
[214]
Mr Morne Du Toit is employed by SARS in the criminal investigation
unit. He was requested to attend a search and seizure at
Mr. Coetser’
s home. There was a search warrant, he entered the house, he was not
alone, there were SAPS people and two ladies
from SARS. He found a
small white box with stamps and it had SARS impressions on them. A
date stamp was notable. He took photos
of it on his cellphone. He
went to Mrs Coetser and the attorney and informed them.
[215]
Mr Du Toit said that Mrs Coetser asked about the implications and he
said it was a serious customs offence. The attorney said
that he had
planted it. He took the stamps to the SAPS officials, it was sealed
in a SARS evidence bag.
[216]
Mr Meyer, when cross examining the witness, asked him who paid for
his legal representative. He was stopped by adv Dewrance
from
answering the question. Adv Dewrance was present in court. The court
warned Mr Du Toit of his legal privilege and he decided
not to waive
it.
[217]
The photos which Mr Du Toit took, were handed in as exhibit SS, SS1
is a photo Mr Coetser’s office before  they
started the
search. SS2 is a photo of the SARS stamp and impression on the stamp.
SS3 Mr Coetser’s bedroom. SS4 photo of
2 Pietermaritzburg
colleagues. SS5 actual cabinet with a box open with the stamps.
Gouws,
C
[218]
Mr Christiaan Gouws is a director from the Shelf Company Warehouse.
His company lodges registrations daily,manually and
electronically,errors
do occur.
[219]
Mr Gouws was referred to Exhibit files A1-11  to A2-18 but
Monkor ransfer Secretaries cannot be a director  in terms
of
section 69(7)
(a) of the
Companies Act 71 of 2008
.
James
T
[220]
Mr William Trevor James knows Mr Meyer, Mr Coetser and Mr Stevens. He
knows Mr Meyer as the brother-in-law to Coetser, Coetser
as auditor
at a company he was working for and Stevens as a friend, colleague
,business acquaintance of Coetser. In approximately
1990 Mr Coetser
assumed the role as financier as majority shareholder of the Square
One company. He cannot remember if the shares
were bought in
Coetser’s own name or not.
[221]
Mr James was the M.D. and the company was very small, he did not do
tax or VAT returns. He knows Lynette Joubert. They had
a normal
business relationship. He advised her to see an attorney. She could
hardly function, she was scared, “petrified
to say the least”.
He could not recall that she raised issues round the VAT returns.
[222] He testified about
imports from USA which started in 1993/1994 going on for a fairly
long period of time, imported a fair
amount of items, saw it in the
warehouse.
[223]
He said that there was fraud in Australia, they would have asked Miss
Joubert to check the records. They imported a great
deal from the
USA, not just apple products. He was the mediator in the office and
tried to settle disagreements in the company.
He met with Alan Toweel
for the listed Square One Group Ltd.He met with Reginald, Jenny Faber
and SARS. Toweel was aggressive in
the meeting. He does not know Mr
Engelbrecht.
[224]
The state asked the witness whether he knew the 18 entities, the
names were read out to him. Concerning Legacy IT he set it
was set up
in 2000 when the Nigeria election took place, it had to import stuff.
Concerning Square One Document Solutions in the
group, imported
techtronics and then bought Xerox in Isando.Square One Power was part
of the groupbut was disposed of in 2006/2007.
Activated Learning
Company they had early 1990-2000 but was disposed off and ceased
trading in 2003/2004. Square One Imports was
a company they had but
ceased in 1999. KPMG took it out and put it in Basfour.
[225]
The state showed commercial invoice Exhibit E (9) (8) to the witness
after being warned in terms of
section 203.
He had no clue as to why
his name was on the document. It also has a Durban telephone number,
he never stayed there.
[226]
On re-examination he said that he could not recollect what had
happened to  Activated Learning.
Karam
PJ
[227]
Mr Patrick J Karam testified about his daughter’s account with
the bank., he was a signatory to it. An amount of R700 000.00

was deposited into her account. The bank said it was erroneous.
Krause,
RC
[228]
Before Mr Krause testified, Mr Coetser confirmed waiving his
privileged rights.
[229]
Mr Roelof Cilliers Krause is an attorney who was instructed by Mr
Coetser to review the two magistrate’s orders concerning
search
and seizures. He made arrangements with the prosecutors to get what
was seized. Two actions were to take place: the customary
interdict
and review. He knows adv Barnard who was the DPP’s counsel in
this matter. All equipment was at SARS. He also dealt
with adv
Oosthuisen. He was not personally involved, Mr Pieter Du Plessis
conducted this , the agreement was made an order of court
on 2
December 2010. He did phone Oosthuisen and Barnard in this regard.
When Oosthuisen said that they will not use any of the

information,then two agreements were reached. He was never informed
that the articles were at Megawatt Park.
Moore,
D
[230]
Mr Dominique Moore is a chartered accountant, he knows Mr Coetser, he
did his articles with him. He knows Wendy Wright. He
worked in the
same house, the set-up was residential property. She did not discuss
VAT issues with him. He could not recall if
there were files in her
office after the search and seizure.
Motsepe
J
[231]
Mr Josh Motsepe works at SAA Cargo. He testified about airwaybills
which had a prefix “083” but the prefix of
Lufthansa
differs from one airline to another. Some of the airlines do have a
code share. The airlines do not share information,
they will not have
a record only when Luthansa tells them.
[232]
He was given several airwaybills by Mr Coetser which he checked but
he could not get any record. He cannot say why not, he
could assume
it might have been used by another airline but he cannot say.He knows
Fanie Shoeman very well. Fanie is the I/T manager
and he agrees with
Fanie.
Muzariri
RT
[233] Mr Reginald Tafara
Muzarari was part of the Square One Group, inter alia as managing
director.  He is a chartered accountant.
Anton Meyer was
financial manager of the Square One Group from 2004 to 2007.He knows
Lynette Joubert, she was a senior bookkeeper.
[234]
He could not recall if the audited reports of 2008/9 were qualified
or not. 2008 was finalized but not 2009. The group went
into
liquidation in 2010. There was more than one bank account as there
was a separate bank account for a separate function.
[235]
The state asked him whether he had any knowledge of the 18 entities.
He repied that the 18 were not part of the group.
Pelser
J
[236]
Mr Jacob Pelser is a colonel in the SAPS. He is the investigating
officer in the matter, certain documents and goods were
seized
including stamps. These were booked in at the SAP13 store in Sandton.
They were sealedin an exhibit bag. In the bag was
one big carton box,
a date stamp, two numbering stamps.
[237]
Exhibit
SS5
was shown to the witness,he said the staps look similar
to those in
SS5.
[238]
The stamp in the box does not look similar and in comparison with
exhibit E it also does not look similar to those in the
box. He could
not explain this. He was not at the scene and according to his
observation the chain of evidence was not broken.
[239]
He did not know how many false stamps were used. There is a stamp by
Du Toit which is not in the exhibit bag.
[240]
The stamp impressions were handed in as exhibit CCC. The impressions
were numbered: Number one shows the numbering stamp 8406,
number two
shws a numbering stamp 3970. Number 3 shows a stamp with the
following words on it,all in capital letters: CUSTOMS O.R.
TAMBO
INTERNATIONAL AIRPORT (SIGN)SARS(IN ITALICS) 2008-08-23 ONE REVENUE
COLLECTION.
Radebe
S
[241]
Me Sharon Radebe is employed by First National Bank. She knows Mr
Coetser and Mr Stevens. They were one of her clients under
one of the
company groups. There were two accounts for the same company for
which she did a check, it is a norm to use more than
one account for
a company. Exhibit “EEE” was handed in.
Ramsamy
JD
[242]
Mr Jason Desgia Ramsamy knows Mr Coetser from the apple store. Mr
Coetser’s company, Square One Imports, imported for
him,
multiple occasions and substantive volumes. He met Clifford Stevens
at the Square One offices, Clifford is also an apple evangelist.
He
knows Anton through Mr Meyer and he knows Anton’s son. He knows
Mr Maharaj a SARS contact with whom he consulted. He cannot

understand why Maharaj could not recall him as he is someone to be
remembered. He gave Maharaj an editing package which he should
still
have.
[243]
He has not met with Arendse formally. He did fetch stuff for Coetser
but needed a letter of authority. He instructed Martin
Smit to help
in getting a tax clearance certificate. He referred Coetser to BDK,
Ian Small Smit and not to adv Van Der Westhuisen.
Adv Frans Van Der
Westhuisen is Martin’s ex father-in-law. He only knows of him,
he was the person to assist them.
[244]
Mr Ramsamy said Garth irritated Toweel ,because of Garth’s
lifestyle. He assumed that Square One was registered as an
importer,
the equipment met all the criteria and the boxes had the labels. He
had a system in place to track the number of the
imports coming from
America. There were tracking numbers to validate the warranty for
hundreds of items. He, his wife and the store
manager did check all.
The shipping documentation had the serial numbers.
[245]
Mr Ramsamy was surprised to hear (from the state in cross
examination) that only one of the 18 entities were registered.
Spies
A
[246]
Me Antonette Spies is a SARS employee. She disagreed with the
testimony of Me Oliveira who said that she, Spies, handled refund

claims. She did not handle the documents but only handed over her
report to Me Oliveira. She still has documents in her cupboard
that
was handed over to Maria.
Swart
J.N
[247]
Before the witness testified, Mr Coetser indicated that he waved his
legal privilege.
[248]
Mr Jacobus N Swart ,an attorney, had to go to Mr Coetser’s home
on 6 May 2010. There was a search and seizure taking
place, Mrs
Coetser was extremely upset and she was crying, a white male came
running outside and he had stamps and showed it to
the witness and
said to the witness:” What do you say of these?” He had
stamps in both hands. He could not remember
how many but could be
five or six.
[249]
He can remember that he briefed adv Van Der Westhuisen on a tax
matter, he believes it was Document Solutions. He cannot remember

because the file was destroyed after five years. It was a tax query
unrelated to this matter. The advocate became demanding as
the last
payment to him was done in June 2010.The advocate was not briefed
from his office about documents after the search and
seizure. If a
legal person does not have a mandate then you are accountable to your
responsible body.
[250]
There was a free for all at the search and seizure, he would be
speculating as he did not know where they came from.
Van
Der Merwe LBR
[251]
Mr. Dawid Ryk Van Der Merwe is an admitted attorney who is also a
liquidator. He was approached by Mr Coetser in connection
with a
section 311
Compromise offer. That was in 2008 and the company was
Trecor (Pty) Ltd. Mr Coetser approached him for a tax clearance
certificate.
Affiliated companies use each other’s accounts.
Visser,James
[252]
Mr James Gerhard Visser is employed by SARS. Maria asked him if he
knew somebody at the airport, asked his assistance. He
helped her. He
could not recall why he signed and what he signed. He wanted the case
to be allocated to him.
[253]
Mr  Meyer asked this witness who paid for his legal
representation, who is in court and the court refused the question
as
it is privileged information.
End of Witnesses
SECTION 174
APPLICATION
[254] At the end of the
evidence for the State, Mr Meyer sought a discharge in terms of
section 174
of the CPA, the court refused the application and gave
short reasons for its refusal. The court in fact dismissed the
section 174
application but then realized that it had not given Mr
Meyer an opportunity to respond in rebuttal as the state was opposing
the
application. The order was rescinded immediately and Mr Meyer was
given time to prepare a rebuttal. The rescission order was based
on
section 298
of the CPA, although there is also room for a superior
court to rectify its mistakes according to the common law. Mr Meyer’s

rebuttal was heard and the application dismissed. The court did not
elaborate on the reasons as to why it was dismissed.
Witness’
credibility
[255] The court listened
to more than twenty witnesses in the trial and in the trials within a
trial and can from the outset say
that out of all the witnesses who
testified, the court could not find one witness who was untrustworthy
or whose evidence could
be seen as false or a fabrication of the
truth. There could be discrepancies and uncertainties but such
discrepancies and uncertainties
are minor and could mostly be due to
the fact that the events happened more than six years ago when they
testified.  These
do not go into the real issues.
[256] Fact is, all the
employees who testified, that is Mrs Wright, Scafturis and Why, did
not contradict one another in material
ways. The two other staff
members, managing directors, Mr Trevor James as well as Mr Reginald
Muzariri also corroborated the evidence
of the employees. Me Why
corroborated Wright about the fetching of documents at Megawatt.
Whether they had permission or not, they
did go to Megawattpark. Mr
Maharaj from SARS confirmed this.
[257] Me Why said Mrs
Wright did not talk to her about the VAT concerns, Wright said she
did. Surely this cannot make either of
them lying witnesses. The
court is of the opinion that Me Why could not remember whether they
spoke about this, a couple of reasons
could have been the cause, the
loss of memory due to effluxion of time, the fact that she did not
primarily deal with the VAT returns.
Be that as it may, fact is the
VAT returns bothered both Wright and Scafturis who were not from the
same offices. Both said that
they spoke to Coetser. There is
corroboration from the two in this regard.
[258] The only point that
could be contested is whether Mrs Wright spoke to Mr Coetser and the
auditors. Mr Coetser did not testify
which leaves the question open.
Mrs Wright was quite sure about this, she said: “Mr Coetser had
an explanation, you never
question him. Michelle Why was also
involved. Mr Coetser explained that the goods landed at customs and
were moved on to other
entities in France and other places.”
The auditor who testified in court, Mr Moore said he did not discuss
VAT issues with
him. Mr Moore could not remember if there were files
left after the search and seizure.
[259] What the employees
had in common was the fact that they, Wright, Scafturis and Why, all
completed VAT returns on instructions
from Mr Coetser or Meyer.
Witnesses’ legal
representation.
[260]
Before dealing with the evidence, I need to point out that several
issues were raised concerning the legal representation
of a witness.
The issues started after the state had closed its case and the
defence wanted to call state witnesses who now had
become available
to the defence. Many of these witnesses were SARS employees. The
judgment I gave concerned the right to
call witnesses by the defence
and the rights of a witness not to testify. The background to this
judgment was the application made
by SARS to this court to rule that
the witnesses who were subpoenad by the defence, not be called. SARS
objected to the calling
of the witnesses on two grounds:
Non-adherence to formalities and state privilege in terms of the Tax
Administration Act, Act 28
of 2011 (“the TAA”). Closely
linked to this dispute is a judgment I made concerning the right to
consult with a witness,
even though the witness might be open to
incrimination or not to be a compellable witness. SARS maintained
that SARS officials,
representing the Commissioner not to be
compellable witnesses.
[261]
The orders made concerned consultations with the witnesses in the
presence of the witness’s legal representative. The
next issue
was whether the witness could have legal representation whilst
testifying. This would be tantamount to a watching brief.
I allowed
this based on the rights as is reflected in our constitution
concerning equality and fairness. Fairness dictates that
a person who
could face prosecution for disclosing matters which he/she were
barred from doing, especially under the TAA, be legally
represented
for assistance. In any event, the court has a discretion to act as
well.  The judgments concerning the two issues,
the right to
call witnesses by the defence and the rights of a witness not to
testify. Also, the right of a witness to legal representation
had as
background the application made by SARS to this court to rule that
the witnesses who were subpoenad by the defence, not
be called. SARS
objected to the calling of the witnesses on two grounds:
Non-adherence to formalities and state privilege in terms
of the Tax
Administration Act, Act 28 of 2011 (“the TAA”). As
mentioned, closely linked to this dispute is a judgment
I made
concerning the right to consult with a witness, even though the
witness might be open to incrimination or not to be a compellable

witness. SARS maintained that SARS officials, representing the
Commissioner not to be compellable witnesses.
[262]
The first issue the court had to determine was that of the
locus
standi
of SARS to bring this application before this court. The
question is asked namely on what grounds may SARS approach the court
if
SARS is not a party to the proceedings, that is if one assumes
that the case is about the State versus the accused. Although SARS
is
the complainant in the matter, the broad approach would be to frown
upon a complainant who refuses to testify, whether for the
state or
for the defence.
[263]
It is not negotiable that in disputes the basis of our law is the
rule of law, all parties, including witnesses, must be heard.
The
logical next step would be to say if a witness wants to be heard and
his/her legal representative is in a better position to
explain
his/her position, then it should be allowed.
[264]
In
S
v Heyman
[1]
two appellants had been called as witnesses in a criminal trial. Both
appellants refused to be sworn in or to make an affirmation.
The
Court a quo sentenced them to eight and five days imprisonment. Once
these sentences had been served, the appellants were called
again as
witnesses and once again refused to be sworn or make an affirmation.
The appellants were then sentenced to imprisonment
to which the
appellants appealed against. The appeal was based on the Court a quo
refusing to allow the appellants legal representation
when they faced
criminal charges and the severity of the sentences. The legislation
applied regarding the refusal to be sworn or
make an affirmation has
been repealed, namely section 212(1) of the Criminal Procedure Act 56
of 1955. To paraphrase, the Act stated
that any witness that refuses
to be sworn or make an affirmation may have the court enquire into
why the witness has refused unless
there is a “just excuse”.
[265]
The court
stated that there seems to be no ground upon which a witness would be
denied legal representation.
[2]
This case is not of any assistance in the present situation as it
dealt with witnesses who were already in court before a judge.
In
Smit v
Van Niekerk
[3]
the respondent wanted legal assistance whilst testifying before a
magistrate in terms of section 83 of Act56 of 1955. Again,
not really
applicable in our situation. But the person questioned had been
allowed legal assistance at the interrogation. In both
these cases
the ratio was that the witnesses faced or could face prosecution.
[266]
In the
U.S.A the case of
In
re Groban
164
Ohio St. 26
(1955)
was regarding a statute that allowed fire marshals to hold private
investigations regarding the causes of fires. The witnesses
called
refused to testify unless their legal representatives were present.
The court held that a witness cannot insist, constitutionally,
on
being represented by their legal counsel.
[4]
[267]
Many cases deal with an insolvent person’s right to legal
representation. In
Appelson
v.
The Master and Others
,
1951 (3) S.A. 141
(T) at p. 146, Dowling, J., observed "it
cannot be said at common law that a witness has a right as such to be
represented
by a legal adviser who would be entitled to intervene in
the proceedings" As a general statement that is no doubt
correct.
It has, however, by no means been unusual for a witness at
an enquiry, in insolvency proceedings, for instance, although not
then
in law entitled thereto, to be allowed professional assistance,
where his examination was "a step in litigation hostile to
such
witness" (
Shamosewitz
v
Shamosewitz and Schatz's
Trustee & Adler, N.O.,
1913 W.L.D. 213
at p. 218).
[268]
The insolvent person’s right to legal representation is now
seen in
sec. 65
(6) of the
Insolvency Act, 24 of 1936
and it
now makes express provision to the effect that an insolvent or other
person who is called upon to give evidence at
a meeting of creditors
is entitled to be assisted at his interrogation by counsel, an
attorney or agent.
[269]
The denial of legal assistance, by a trustee to an insolvent person,
is denying that person his/her fundamental rights namely
to be heard,
but not only heard, to be properly heard. If a trustee and especially
a provisional trustee, denies to see or consult
with the lawyers of
the insolvent, how can that trustee justify his/her actions when the
trustee has a duty to objectively investigate
the financial affairs
of the insolvent? Surely this is not the rule of law but rather an
arrogant approach.
[270]
The right to equality is not infringed; The
defence and the state are equal in court.
The public interest
is compelling, all relevant evidence should be heard and the court is
the place where this is done. To this
end it is vital to ensure that
persons who are in a position to give important information do not
evade supplying it. A
witness who was properly
subpoenaed is obliged to attend and should raise objections to the
presiding officer.
[271]
I know of no ground upon which a witness could be denied the right,
after being called as a witness, to consult his legal
adviser before
deciding upon conduct in court which would there and then expose him
to possible criminal charges. In my opinion,
a witness who is
subjected to incrimination in the light of
section 203
of the
Criminal Procedure Act, 1977
is entitled to be assisted by his
counsel or attorney or to consult his legal adviser, if he genuinely
and
bona fide
so desires.
[272] I, however, had to
caution SARS as the following transpired: Suddenly an attorney of
record came on board and insisted that
counsel who wanted to call a
witness, work through their offices and arrange for consultations
through their offices. I ruled that
this is not how it works. A
witness who is approached by the state or defence is obliged to
co-operate alternatively a subpoena
could be issued or even a court
order. The fact that the witness has an attorney merely implies that
the witness can make use of
the attorney and not that the state or
counsel must work “through the attorney.”
[273]
The circumstances in which the officials of SARS want to be legally
represented now are such that it is perfectly obvious
that the
request to be represented is not linked to a fear of incrimination
but rather a concern about the privileged information
which they may
have to divulge. The court found that SARS had
locus standi
to
approach the court.
[274]
SARS was concerned about the amount of potential SARS witnesses being
called merely to testify about procedures or procedural
manuals. I
repeat what has been said in this case on 29 January 2016 when
judgment was given in connection with a
subpoena duces tecum
:
At par 32-33 I said: “
Constitutional rights
are tested by the Constitution not by manuals. Non-adherence to
constitutional rights can be seen with or
without office manuals. If
an office manual makes provision for an inspector to follow
procedures X, Y and Z and the inspector
only follows procedure X,
will that be unconstitutional? It would only be unconstitutional if
procedures X, Y and Z itself are
unconstitutional. But even if X, Y
and Z are not in the manual and they are constitutional requirements,
then despite it not being
here, the accused may stand on his rights.
That is why I said that the compliance to Standing Orders are mere
administrative rules.
Many rules and manuals have been tested by the
values of our constitution. This comes out during a court case when
evidence is
given and unconstitutional acts come to light.”
Tax
Administration Act, Act 28 of 2011
[275]
In the same judgment, I discussed t
he Tax
Administration Act, Act 28 of 2011 (“the TAA”) which
prohibits the disclosure of the information sought to be
produced.
The question to be asked is whether the TAA finds application in casu
or not.
[276]
The Tax
Administration Act, Act 28 of 2011 (“the TAA”) prohibits
the disclosure of the information sought to be produced.
As seen in
section 68(1)(d) of the TAA which makes information related to
investigations and prosecutions described in section
39 of PAIA,
confidential information. This section read with section 202 of the
Criminal Procedure Act of 1977 (“CPA”)
renders the
Commissioner not to be a compellable witness unless there are
jurisdictional facts which indicate unconstitutional
actions.
[5]
[277]
However, in the current case the transitional provisions make
prvision for exceptions to the rule of applying the TAA from
date of
inception, 1 October 2011, one exception being criminal prosecutions
i.e. where prosecution for a tax offence has been
instituted the
prosecution will proceed based on the original wording of the
relevant tax offence and tax appeal proceedings before
a court which
commenced before the Act came into operation will continue, and be
disposed of, by the court as if the Act had not
come into operation.
[278]
Section 269 (6) of the TAA reads that the commission of an offence
before the commencement date of this Act which is a statutory
offence
under the provisions of a tax Act repealed by this Act, may be
investigated by SARS, in the manner referred to in Chapter
5, and
prosecuted as if the statutory offence remained in force.
[279] Having said this,
section 270 of the TA A provides as follows: Subject to this Chapter,
this Act applies to an act, omission
or proceeding taken, occurring
or instituted before the commencement date of this Act, but without
prejudice to the action taken
or proceedings conducted before the
commencement date of the comparable provisions of this Act.
[280] The following
actions or proceedings taken or instituted under the
provisions of a tax Act
repealed by this Act but not completed
by the commencement date of the comparable provisions of this Act,
must be continued and concluded under the provisions of this Act
as if taken or instituted under this Act:
(a)
…
(b)
…
(c)
an
inspection, verification, request for information, audit, criminal
investigation, inquiry or search and seizure;
(d)
…
(e)
…
(f)
…
(g)
…
[281]
In casu  the charges are still in terms of “provisions of
a tax Act repealed”.  I here refer to the
alternative
charges in the indictment, that is section 59 (1) (a)  of the
VAT Act 89 of 1991. This  specific section
was  repealed by
the TAA!
[282]
In summary therefore:
i. The TAA makes
information relating to investigations and prosecutions confidential.
ii. Offences prior to the
TAA is seen as if the TAA had not come into operation.
iii. But the TAA is
applicable to actions or proceedings NOT completed and must be
continued under the TAA referring to specific
actions namely an
inspection, verification, request for information, audit, criminal
investigation, inquiry or search and seizure;
[283]
The TAA can therefore only apply to specific actions namely an
inspection, verification, request for information, audit, criminal

investigation, inquiry or search and seizure after 1 October 2011.
[284] There are new
confidentiality provisions contained in the TAA which could differ
from the “Preservation of Secrecy”
provisions previously
contained in section 4 of the Income Tax Act 58 of 1962 ("the
Act").
[285] The term “SARS
confidential information” is defined in detail in section 68(1)
of the TAA and includes items such
as information subject to legal
professional privilege vested in SARS and information supplied in
confidence by a third party to
SARS, the disclosure of which could
reasonably be expected to prejudice the future supply of similar
information, or information
from the same source.
[286] In terms of section
68(2)(a) and (b) of the TAA, a person who is a current or former SARS
official, may not disclose “SARS
confidential information”
to a person who is not a SARS official; or a SARS official who is not
authorised to have access
to the information.
[287] However, in terms
of section 68(3) of the TAA, a person who is a SARS official or
former SARS official may disclose “SARS
confidential
information” if: the information is public
information; authorised by the Commissioner; disclosure is
authorised under any other Act which expressly provides for the
disclosure of the information despite the provisions in Chapter
6 of
the TAA; access has been granted for the disclosure of the
information in terms of the Promotion of Access to Information
Act;
or required by order of a High Court.
[288]
Looking at the nature of the documents required, the second
respondent wanted   manuals and or policy documents
and or
guidelines regulating the process. But the documents pertaining to
getting information about the companies clearly falls
in the category
of public privilege. SARS not only needs to be put in a position to
query an entity but also needs access to company
records to verify
information.  It is trite that SARS may make use of state
departments i.e. police records about directors,
when auditing tax
returns and VAT returns.
Constitutionality
of the TAA
[289]
Accused two had in mind that SARS was in a sense setting a trap for
the accused. SARS was obtaining documents and information
when
criminal proceedings were pending or anticipated. However,
proceedings are anticipated where a person would say “I better

be careful what I say, I might get into trouble, even go to court”.
See
United Tobacco Company v Goncalves
1996 (1) SA 209
(W). On
this point the second accused would fail as SARS are auditors with
powers to verify forms and all documents lodged with
it. No traps are
set when they merely do their work.
[290]
The law applicable prior to the TAA is in my opinion the law to
apply, unless the defence wants to enquire about what had
happened
after 1 October 2011. I doubt this as the first appearance of the
accused was 11 May 2010. (Later for accused 3)
[291]
Even if the
SARS officials are competent witnesses, the question of relevancy
should also be addressed.
The
court has to consider the rationale for excluding evidence. The
Honourable Van Der Merwe, J said the following pertaining to

relevancy:
[6]
“At the time when the application was brought I referred to
what was said by Schreiner JA in
R
v Matthews and Others
1960
(1) SA 752
(A) at 758A - B:  'Relevancy is based on a blend
of logic and experience lying outside the law.' In the law of
evidence
much time is usually spent on the question of what evidence
is relevant and admissible and what is irrelevant and therefore
inadmissible.
See eg Zeffertt, Paizes and Skeen
The
South African Law of Evidence
at
219 - 25; Schwikkard and Van der Merwe
Principles
of Evidence
(2
ed)  at 45 - 55; Schmidt
Bewysreg
(4
ed) at 387 - 92. What is clear, though, is that the question of
relevancy can never be divorced from the facts of a particular
matter
before court.”
[292]
One should also look at section 210 of the CPA which reads:
No
evidence as to any fact, matter or thing shall be admissible which is
irrelevant or immaterial and which cannot conduce to prove
or
disprove any point or fact at issue in criminal proceedings.
[293]
In a criminal case, the points in issue are demarcated by the extent
to which the allegations in the charge sheet are disputed
by the plea
(as supplemented by a plea explanation). Evidence that proves or
disproves such s point in issue is relevant. There
may, however, also
be evidence that does not directly prove or controvert a point in
dispute but
tends
to do so. Such evidence is, as a
rule, admissible. It was said that relevance is based on a mixture of
common sense, logic and experience
– and not on rules of law (
R
v Matthews and Others
1960 (1) SA 752 (A)
at 758A–B).
[294]
In principle, the relevance of a fact is determined by the probative
value it has regarding the facts in dispute; and the
relevance of a
fact determines the admissibility of evidence regarding that fact.
But relevant evidence can also be disallowed
where the evidential
value thereof is overshadowed by the danger of (a) unfair prejudice
caused thereby, (b) confusion of points
in issue and (c) excessive
delay, waste of time or unnecessary duplication of evidence.
[295] The court ordered
SARS witnesses to appear and be assisted by counsel. (this did not
give the counsel of a witness the right
to ask questions, but it was
tantamount to a watching brief.)
Documentation
[296] This case primarily
concerns documentary evidence.  When looking at documentary
evidence, one should bear in mind that
the CPA makes provision for
tendering evidence based on documents in sections 212, 236,234,
221and 222. There are at least three
other acts to look at when
dealing with documentary evidence in criminal cases: 1)
Section
(15) of the
Electronic
Communications and Transactions Act, 25 of 2002 (ECT Act); 2) T
he
Law of Evidence Amendment Act 45 of 1988
; 3) Sections 33 to 38 of the
Civil Proceedings Evidence Act.
[297]
The state relied on
section 15 (4) of the
ECT Act.
Starting with 15 (4), it prohibits the “rules of evidence”
from excluding the admissibility of a data message
merely on the
grounds that the message is not an original “if it is the best
evidence that the person can adducing it can
be expected to obtain.”
It states: “In any legal proceedings, the rules of evidence
must not be applied so as to deny
the admissibility of a data
message, in evidence ---- (a) on the mere grounds that it is
constituted by a data message; or (b)
if it is the best evidence that
the person adducing it could reasonably be to obtain, on the ground
that it is not in its original
form.”
[298]
As
was pointed out in
Ndlovu
V Minister of Correctional Services
[7]
,
this
subsection facilitates admissibility by excluding evidence rules that
deny the admissibility of electronic evidence purely
because of its
electronic origin. Section 15 places electronic information on the
same footing as traditional paper-based transactions,
and thus does
not do away with the requirements governing the admissibility of
documentary evidence which are relevance, authenticity
and
originality.
[299]
Section
15 (1) does not, however make all data messages automatically
admissible. According to the ECT Act data messages are the
functional
equivalents of documents and therefore, except where the Act
specifically provides for exceptions, the ordinary common
law
requirements for the admissibility of documents must be adhered
to.
[300]
In
Ndlovu
v Minister of Correctional Services,
(supra) the court held that in common law a document will only be
admissible if three requirements are met:
(a) the statements
contained in the document must be relevant and otherwise
admissible;
(b) the authenticity of the document must be proven;
and
(c) the original document must normally be produced.
[301]
According
to the Ndlovu case, section 15(1) has not abolished these
requirements. In addition in the case of private electronic

documents, admissibility can only be achieved through proving: (a)
production: The use of data messages as documents is permitted
by
Section 17(1) provided that certain conditions are met namely: that
the method of generating the electronic form of that document

provided a reliable means of assuring the maintenance of the
integrity of the information contained in that document S17(1)(a);

and that it was reasonable to expect that the information contained
in the data message would be readily accessible so as to be
usable
for subsequent reference S17(1)(b).
[302]
Section
14 requires that the integrity of the information contained in the
data message be assessed: has it remained complete and
unaltered
except for the addition or endorsements or changes which arise in the
normal course of communication, storage or display
(S14(2)). The EFT
Act also requires that the information be capable of being displayed
or produced to the person to whom it is
to be presented (S14(1)(b).
[303]
Section
16(1) of the Act requires that for data messages to comply with the
high evidential requirements, three requirements must
be met:(a) the
information contained in the data message has to be accessible for
subsequent reference;(b)  the data message
has to be in the
format in which it was generated, sent or received or in a format
which can be demonstrated to represent accurately
the information
generated, sent or received; and   (c) the origin and
destination of the data message and the date and
time it was sent or
received can be determined.
[304]
In
proving the integrity of the data messages it is important that a
chain of custody be established and demonstrated for example
by
demonstrating established electronic storage and restricted access,
the use of devices that limit access without passwords,
encoding and
entry logs when and by whom documents have been accessed or
changed.
[8]
[305]
Looking
at the authenticity requirement we note that it is defined as the
capacity to prove the digital object is what it purports
to be. It
authenticity is preserved by the use of techniques to prevent the
data from being manipulated, altered or falsified deliberately
or
inadvertently.
[9]
[306]
The
most common way of proving the authenticity of private documents
would be to call the author(s) to identify the documents:
[10]
The
ECT Act does not attempt to enumerate any specific criteria that
should be applied, this is due to the fact that there are different

types of data messages so it would be difficult to formulate
prerequisites for authentication which would apply to all types. In

the
Ndlovu
case the court had an opportunity to analyse the authenticity rule as
found is Section 15 of the Act but declined to do so.
[307]
The
Irish Law Commission provides guidelines that could be considered by
a court in determining whether or not the electronic or
automated
evidence and resulting documents are authentic by determining, these
include: (a) whether the secondary media (discs,
USB keys) upon which
the information was stored have been damaged or interfered with in
any way; whether proper record management
procedures were in
operation; whether proper security procedures were in place to
prevent the alteration of the information of
the information
contained in the drive file or secondary storage device prior to the
information being reproduced in permanent
legible through a
printout.
[11]
[308]
Only once a data message is admitted into
evidence, it must be given the due evidential weight in terms of
s15(2) of the ECT Act.
In assessing the evidential weight of a
data message, regard must be had to the reliability of the process of
generation, storage
and communication of the data, of the
preservation of integrity, of the identification of the originator
(proof of authenticity
and any other relevant factor (s 15 (3)).
[309]
The
honourable Judge of the Supreme Court, judge Wallis can be
quoted:
[12]
“
Whilst
the best evidence rule seems everywhere to be in retreat that does
not mean that a court must accept as accurate secondary
evidence of a
document or other form of writing, such as a text message. The fact
that it has been thought necessary to make elaborate
provision in a
statute for the admissibility in evidence of such messages
demonstrates the need for caution in this regard. Here
the original
message would have been admissible provided the court was satisfied
that it had been generated, stored and communicated
in a reliable
manner; that its integrity had been maintained in a reliable manner
and after taking into account any other relevant
factor. Perhaps the
oddities about this message would have been explained had the
original been produced as it should have been.”
[310]
Schwikkard
and Van Der Merwe describes the concept of evidence clearly:
“Evidence is either admitted or not admitted.
It should
conceptually not be confused with to what degree weight is given to
evidence.”
[13]
[311]
The court could not find fault in the documents
provided by the state in terms of the EFT Act, as set out in schedule
D of the indictment.
T
he documentary evidence was introduced
by state witnesses. Mr  Engelbrecht introduced the documents
which were corroborated
by state witnesses. Me Oliveira collected
documents, Mrs Wright collected documents and so did Mrs Scafturis.
The auditors also
collected documents.
[312]
The auditors come in when during the trial the court had to
deal with section 34 of the Civil Proceedings Act, 25. The state
applied
for an order that the affidavits together with the annexures,
affirmed under oath by 15 auditors,be allowed without having to call

the auditors. The court also dealt with exhibits “E”. A
separate judgment concerning the auditors had been given. Even
at the
end of state case and of the defence case, no evidence emerged to
convince the court to re-look at its previous findings.
[313]
The court finds that the state proved the documents per
schedule D of the indictment.
The first conclusion
is that the evidence which arose after the trial within a trial and
at conclusion of state case and also after
defence case, did not
alter the judgment of the trial within a trial nor the judgment
concerning the auditors.
[314]
Taking into consideration the documentation and the evidence
concerning the documents, the undisputed common cause evidence
is as
follows:
1. The 18 entities were
all registered for VAT. Mr Coetser was the representative per VAT 101
for all entities except for number
7 (S Carter) and number 15
(Stevens). Mr Meyer was not a representative of any of the entities.
This is reflected in exhibits B1
to 198.
2. The four entities
fraudulently claimed VAT refunds as per Schedule B taking into
account the exhibits mentioned in the schedule.
3. The amounts mentioned
in the supporting documents for the VAT refunds are all false.
4. These entities did not
trade.
5. SARS paid out the
refunds claimed as reflected in Schedule B.
6. The total VAT refunds
were withdrawn from the entities’ respective accounts within a
day or two of being deposited by SARS
into their bank accounts.
7. There were many inter
account transfers where money was transferred in respect of the VAT
refunds as per exhibit C, to other
entities and to Mr Coetser and to
Mr Stevens. There were also many cheque swops and cash cheques.
[315]
The only real factual question to be determined is whether the
version of the accused should be believed, namely that the
accused
had another account from which the VAT refunds were properly
administered.
[316]
Looking at the evidence concerning forex transactions, it is clear
that there were no forex transactions linked to the VAT
claims. Mr
Engelbrecht testified concerning a few forex entries on the bank
statements, for example entity number 15, Amber Falcon,
where there
appears from the bank statements, C15, page 51, to be a forex entry.
Dated the 17
th
of February 2009, for the amount of
R31 248.90.  Another entry was spotted at page 63, of C15.
The amount of R31 754.90
was purchased, or forex was purchased
on the 21
st
of August 2009.  Another one at page 69,
six, nine, a transaction on the 10
th
of November 2009.
A purchase of forex for the amount of R37 709.58.  Mr
Engelbrecht concluded that “There
were no other forex
transactions besides these three transactions.” Other forex
entries were referred to but they cannot
be proof of forex
transactions relating to the VAT claims. Watts stated that Moncor
Management was indeed registered as an importer
and exporter.
On the schedules that were attached to her statement, there are no
exports for the period for the period January
2007 to March 2010.
Although there are imports, the largest import recorded, required a
VAT payment of R29 485.54.
C11, page 117 the entry dated
19 March 2009 is a CAMS transfer inter, inter company bank transfer,
of R1 361 603.70,
reference for forex payment, it is being
transferred from Moncor Management Services to another account within
the group. There
is a forex transaction at C11 116. On the 23
rd
of March, there is a forex sale transaction FX, reference Oak Trust
ST for R1 361 603.70.  That money was transferred
into
Moncor Management, for the purchase of this sale, of this forex on,
four days later, on the 23
rd
of March.
[317]
The importers and exporters of the business entities in whose names
the false invoices had been produced were not called.
The names are
reflected in Schedule F to the indictment. They could also be
referred to as agents. Mr Engelbrecht had this to say:
“I am
saying though that if the Australian Company, if Square One Australia
pays the, a company in America for the South
African company’s
debt, then that debt payment, made by the South African, by the
Australian company, has to be reflected
in the books of the South
African company.  Then, the question must arise in your mind as
to why is the Australian company
not interacting and purchasing from
the Miami company directly?” He was not aware of one occasion
which the entities made
use of a clearing agent.
[318]
The evidence of Mr Engelbrecht was corroborated by Mr Schoeman, the
state witness employed by the South African Airways in
the cargo
division. He said that if the SAA carries cargo, then the
documentation would be an airbill, a manifesto called air cargo

manifest. If there were goods coming in, the general rule is that a
sales agent would act on behalf of the client.  The account

holder would get a range of airbills, bigger agents have their own
system. If one imports, i.e. from Miami, then one must be registered

with/as  “TSA”. The documents could be
electronically transferred. Mr Schoeman said that exhibit E 9(9) is a
SAA Airwaybill. But the following problems are encountered with this
Air Waybill: No goods description, you cannot ship if the contents
is
wrong. He then referred to the agent’s code being wrong, it
should have started with “001”. No issuing agent’s

name and the SAA did not do flights from Miami! It was terminated in
1999. No routing information. The carrier is SA not SAA. The
final
destination is not mentioned. The goods description and weight cannot
be edited once on the system. The number of pieces
is quite large, 26
is mentioned.  The aircraft contains baggage, passengers, so
weight distribution is very important. The
witness investigated 91
Air Waybills and “E” exhibits. None of these were
recorded on the system, he did an additional
audit and found no
skipper or consignee on his system. None of the Waybills were
accepted by SAA or a third party. None of the
entities appeared on
the system. An example: E21 (67) is an export to Greece, SAA does not
fly to Greece.  The agent code
must be on it. Incomplete bills
are not accepted. Goods description are in the wrong place. 5800 kg
is too heavy. Another example:
E21 (87) shows no routing
information.  Weight is 24750 kg, much more than a flight.
[319]
Watts stated that Moncor Management was indeed registered as an
importer and exporter.  On the schedules that were attached
to
her statement, there are no exports for the period for the period
January 2007 to March 2010.  Although there are imports,
the
largest import recorded, required a VAT payment of R29 485.54.
C11, page 117  the entry dated 19 March 2009
is a CAMS transfer
inter, inter company bank transfer, of R1 361 603.70,
reference for forex payment, it is being transferred
from Moncor
Management Services to another account within the group. There is a
forex transaction at C11 116. On the 23
rd
of March,
there is a forex sale transaction FX, reference Oak Trust ST for
R1 361 603.70.  That money was transferred
into Moncor
Management, for the purchase of this sale, of this forex on, four
days later, on the 23
rd
of March.
[320]
The witness called by the defence, Mr Motsepe corroborated Mr
Schoeman and without hesitation said that he agrees with Mr
Schoeman.
[321]
The existence of the scam and its
modus operandi
is
further corroborated by the admitted documents, which are evidence
that the accused registered the entities, submitted the VAT
returns
and that the VAT refunds that were fraudulently claimed were paid
out. The bank statements are objective evidence that
the entities did
not trade and existed solely to submit false VAT claims, as testified
to by the state witnesses.
[322]
In as far as the defence relied on contractions in the evidence of
the state witnesses, the court cannot agree that the contradictions

were major contradictions.
[323]
Not every error, inconsistency or contradiction made by a witness
will affect his or her credibility. A court is enjoined
to weigh up
the evidence of the witness as against the totality of the evidence
produced by the State. The ultimate test is whether
after treating
the evidence with the due circumspection, the court is satisfied
beyond a reasonable doubt that the story told is
essentially true.
[324] There were various
versions proffered by the accused during the trial and especially
during cross examination. The version
put to Mr Engelbrecht by
Counsel for accused number two is as follows: “Sir, my
instruction is to put it to you that my client’s
entities had a
long-standing arrangement with the company in America, this company
in America to which you refer, for them, to
buy on account.”
The reply: “Okay.  So, when did they pay for that?”
Counsel then replied that she was going
to ask him because he
inspected the documents. He answered that there was no payment if the
invoice was issued, or payment should
have been then a payment would
be reflected in the bank account of Square One and it is not and
besides the fact that you are talking
about two different legal
entities.
[325] Counsel argued that
there are payments but not at least, to the quantum that we are
talking about and put it to the witness
that there is mention of
Square One Australia.  Mr Engelbrecht said he did not
investigate whether there were any payments
from Square One Australia
to the American companies. He does not have access to that
information.
[326] Counsel for accused
two then put this version: “I am putting it to you, Sir, that
the Australian Square One could have
paid the American companies.
You cannot, at this stage say that there was not any such payment,
seeing the fact that you
are unable to access the Australian, as well
as the US companies.”
[327] The witness said:
“You are quite right.  I cannot rebut that.  My issue
though is, if there were exports to
the Australian company, then as
well, if that happens, those type of payments have to be reflected in
the accounting records of
any of the South African companies.”
[328] The witness also
said: “I am saying though that if the Australian Company, if
Square One Australia pays the, a company
in America for the South
African company’s debt, then that debt payment, made by the
South African, by the Australian company,
has to be reflected in the
books of the South African company.  Then, the question must
arise in your mind as to why is the
Australian company not
interacting and purchasing from the Miami company directly?”
[329]
The witness was not aware of one occasion which the entities made use
of a clearing agent.
[330]
Closely linked to this version is the version that Monkor Management
did all the administration and that the fact that companies
can have
more than one bank account. This cannot take the matter further.
[331]
The version put to Mr Engelbrecht was that the group of companies
made use of a central treasury within the group. Payments
done by one
of the entities within the group that would administer all the
financial bits. The witness repied:”I have not
seen that
account, and it would have been out of the ordinary, let me put it
that way, if that was the case. Because usually companies
administer
their books for each legal persona.”
[332]
Mr Engelbrecht’s evidence was partially correct. Me Radebo of
FNB confirmed that companies could have inter-company
accounts and
she was corrborated by the two managing directors, Mr Trevor James
and Mr Muzariri.
[333]
The same version from a different angle was put to Mr Engelbrecht
namely that if the witness did not have sight of the accounting

records he cannot, or he is unable to comment regarding loans,
intercompany loans. The witness repied: “You get intercompany

loans.  There were references to intercompany loans with the
transfer of the VAT refunds received.” The follow-up on
this
version was then put namely that the witness did not have access to
the US and Australian counter parts, which still formed
part of the
Square One group,and therefore cannot comment on any intercompany
loans in that effect. The witness replied that he
could not. From
this the version was put more clearly namely that the central
treasury was run by the offshore company, which administrated
the
intercompany loans.The witness replied that he did have access to any
of the offshore company records.  Mr Engelbrecht
said that he
did  not follow up how much money was paid offshore by Square
One, the listed company. He did not see a direct
link between that
listed company and these companies. He investigated a syndicate and
there were no payments made from Square One,
the listed company, to
these companies or vice versa.
[334]
Mr Engelbrecht did not recall having seen the import code 707070 on
the documents.  He added that SARS VAT audit does
not regularly
speak to customs, had those systems talked to each other, the whole
scheme would not have worked. It is a loophole
in the system.
[335]
It is trite
that the onus rests upon the State to prove the guilt of the accused
beyond reasonable doubt, after weighing up all
the evidence before
court and in a holistic manner. This has been stated in a long line
of cases and needs no further elaboration.
[14]
[336]
It may be,
that even if an accused’s version is improbable, he is entitled
to an acquittal if it is reasonably possibly true.
In
Monageng
v S
[15]
the
court described proof beyond reasonable doubt as: “. . .
evidence with such a high degree of probability that the
ordinary
man, after mature consideration, comes to the conclusion that there
exists no reasonable doubt that the accused has committed
the crime
charged.”
[16]
[337] The state witnesses
agreed that there could be more than one account per company but
their investigations showed no further
dealings. The defence had the
best opportuniy to refute this when two managing directors testified.
The defence called the two
managing directors, Mr Trevor James and Mr
Muzariri.
[338]
Mr James testified about imports from USA which started in 1993/1994
going on for a fairly long period of time, they imported
a fair
number of items, he saw it in the warehouse. In this regard Mr James
contradicts Scafturis but he corroborates her in other
ways, for
example by confirming a Nigerian link, her working “under”
him and confirming that he had no knowledge of
the VAT returns of the
18 entities. He would have been the better witness to provide the
financials and evidence of interaction
with other companies
especially the listed company.
[339]
In exactly the same fashion Mr Muzariri could have explained the
financial situation between the 18 entities and the listed
company.
Mr Reginald Tafara Muzarari was part of the Square One Group, inter
alia as managing director.  He is a chartered
accountant. The
group went into liquidation in 2010. There was more than one bank
account as there was a separate bank account
for a separate function.
The state asked him whether he had any knowledge of the 18 entities.
The 18 were not part of the group.
[340]
Still on this issue, one could have expected the liquidators to bring
the books and show that the state was wrong. Alternatively,
when Me
Radebe,who testified as FNB “deal specialist” handed in
the accounts confirmation letter of Monkor Management
Services (Pty)
Ltd , she could have brought along all the bank statements. One
should bear in mind that the onus did not shift.
But at end of state
case there was a prima facie case made otherwise the court would have
granted a section 174 acquittal.
[341]
In addition to the evidence of Me Oliveira, Mrs Wright and Mrs
Scafturis as well as the documentary evidence, in that the
Mr Coetser
and Meyer were the masterminds in supplying the information for the
VAT returns. The undisputed facts point to the guilt
of all three
accused.
[342]
It was not disputed that the entities were registered for VAT. Mr
Engelbrecht took the court through exhibit A establishing
the 18
entities which were registered for VAT per the VAT101 documents.
There were an additional 2 entities which were not registered
for
VAT.
[343]
The amounts for the Vat claims came from Mr Coetser and Mr Meyer. Mr
Stevens made inputs concerning the VAT claims. Mrs Wright,
Why and
Scafturis testified that the accused received and responded to all
correspondence from SARS on behalf of the entities.
The accused had
access to all the bank statements from which it would have been
immediately apparent that the entities received
no income other than
the VAT refunds. A rough calculation shows that if VAT was refunded
in the amount of R147 million and R 600 000,
then a total
of purchases in excess of R1 billion and R50 million would have had
to go through in respect of the 18 entities to
justify the VAT that
was claimed on their behalf.
[344] A cursory glance at
the bank statements, whose contents are not disputed, would have
revealed that these entities do not trade
and never had these
amounts, or anything vaguely resembling these amounts, in their bank
statements. It would have been immediately
apparent that refunds in
the amounts claimed, or at all, were fraudulent.
[345] The conclusion is
thus that the three accused were involved in the VAT claims. They
were involved as was testified by the
state witnesses, their names
appear on emails where they were the sender, or where they were
copied in. The entities were interconnected.
Schedule A to the
indictment, a reflection and summary of the representatives for VAT
purposes, the signatories on the bank accounts
and the status of the
members in the different companies, show the interaction of all.
Similary, the inter account transfers in
schedule C, which is based
on documentary proof, reflects this.
Common Purpose
[346] There is no doubt
about this. The question is whether there was a common purpose in
this regard to work together or should
each be held liable only as
far as the documents proof that they were involved. But then one
would be ignoring the evidence of
the state witnesses. At first
glance, it appears as if Mr Stevens was not involved to a large
extend, his name is only linked to
two entities namely number 15,
Amber Falcon and 17 Sunmark International Distributors. The role he
played in the two entities:
For entity number 15, Stevens was a VAT
101 representative, he was a member per the CK documents and he was
an authorised bank
signatory. For entity number 17 Stevens was only a
bank signatory.
[347] The first VAT fraud
on record is January 2007, exhibit B14.(Entity 3). Concerning entity
number 15: The first VAT that was
claimed was in October 2007. See
exhibit B147. The last amount claimed was in March 2010. (Exhibit B
160). Concerning entity number
17:  The first VAT that was
claimed was in February 2007. See exhibit B170. The last amount
claimed was in January 2010. (Exhibit
B186). The first inter account
transfer took place on 16 March 2007 (Entity 17). The first inter
account transfer of entity number
15 took place on 1 February 2008
and the last on 27 January 2010. The first inter account transfer of
entity number 17 took place
on 16 March 2007. The last transfer was
made on 21 January 2010.
[348]
By only looking at the two entities where Mr Steven’s name
features it is apparent that he was involved by at least
February
2007.Mr Engelbrecht testified concerning entity 15: Amber Falcon: Mr
Garth Coetser, accused 2, signed the letter for Mr
Stevens, accused
3, to open a bank account: C15-099. Mr Meyer signed B157 the VAT 201
relating to Amber Falcon. B158 was also signed
by Mr Meyer.
[349] Mr Engelbrecht
testified concerning entity number 15, Amber Falcon, counts 147 to
160, there are no documents filed into the
Exhibit E.  Bank
statements, C15, page 51, appears to be a forex entry.  Dated
the 17
th
of February 2009, for the amount of R31 248.90.
Another one at page 63, of C15.  The amount of R31 754.90
was purchased, or forex was purchased on the 21
st
of
August 2009.  Another one at page 69, six, nine, a transaction
on the 10
th
of November 2009.  A purchase of forex
for the amount of R37 709.58. The bank statements of entity
number 15 Anglo Falcon,
Exhibit C15, were referred to. The witness
referred to two specific entries, the first one being referenced
transfer to C L Stevens
the amount being R40 000.
The second one being transfer with the same credit card number ending
7058 which is also that
for Stevens. Then on 30 November there
is a general debit with the reference transfer to C Steven the
amount of R40 000.
The two entries for 14 December the
first one being a general debit referenced transfer to C L Stevens
the amount
being R50 000 and the second one being general debit,
transfer to the credit card number ending 7058 the amount of
R70 000.
Then 22 December there is another transfer
to the same credit card account of R25 000.
[350]
Coming back to the dates, the first VAT fraud on record is January
2007,but for  entity 17 it is February 2007. Could
it be that Mr
Stevens was a late comer? I doubt this. The reason why I say this is
that one should not look at the directorships.
Accused one was
director of only two entities, number 9 and 10. Yet it is clear that
he was involved with the other entities as
well.  Although the
company where Mr Stevens was a director only claimed a month after
the first overall claim was made, one
should keep in mind that the
claims are done for VAT refunds based on activities the 2 months
prior to the claims. Even if this
has not been proved, the VAT
refunds were not denied.
[351] The three accused
worked together. Mrs Wright explained concerning exhibit WW 45
(1)-(3): This was an email from Stevens ,
she was not to lodge
Basfour if the amount was more than R2 million. In her evidence she
also referred to WW 55 and WW 59, WW 59
was to Anton Meyer where she
said they need to do payments from Imports cash cheque, she explained
that Coetser would instruct
her to write out cash cheques and deposit
them in the said entities’ bank account. This email is a good
example of all 3
parties being involved. Coetser and Meyer on email
and Stevens mentioned in the email! Coetser asks Meyer to print out
the attached
“doc for Cliff and the IME invoice and arrange to
get to him.”
[352] The evidence of the
state clearly demonstrates a common purpose. The requirements for a
common purpose is set out in
S v Safatsa and Others
1988
(1) SA 868
(A), namely that certain prerequisites are to be
satisfied. In the first place, presence at the scene, secondly
knowledge of the
crime being committed and thirdly the intention to
make common cause with those who were the perpetrators. Fourthly, he
must have
manifested his sharing of a common purpose with the
perpetrators by himself performing some act of association with the
conduct
of the others. Fifthly, he must have had the requisite
mens
rea
in respect of the crime which includes that he must have
foreseen the possibility of the actions taken place and performed his

own act of association with recklessness as to whether or not the
crime would take place.
[353] The requirements as
set out in
S v Safatsa and Others
pertained to crimes against
the person, the same principles apply for crimes against property.
The state in its Heads of Argument
takes the basic requirements and
makes it applicable to crimes against property. In short the state
says that the scene of the
crime is cyberspace. This is a valid
point, the scene in this case varied from cyberspace to various
offices, perhaps even state
buildings. The accused were well aware,
had knowledge of the crime being committed. The accused had the
intention to make common
cause with those who were the perpetrators.
This is evident in all the emails, the inter-company transfers, the
cheque swops. The
witnesses testify about the accused working in
tandem, as a team. The accused have manifested the sharing of a
common purpose by
performing acts of association with the conduct of
the others. It is a given that the documents contained fictitious
information
and from this the only inference is that the accused must
have had the requisite
mens rea
in respect of the
crimes. The conclusion is that the accused acted with a common
purpose.
[354]
The court
found that the accused acted with a common purpose. The court now has
to establish what crimes were committed. The crime
of fraud according
to Snyman can be defined as: “The unlawful and intentional
making of a misrepresentation which causes
actual prejudices, or
which is potentially prejudicial to another.”
[17]
[355] The accused, by
allowing the VAT returns to be submitted, intentionally
misrepresented the truth. Certain claims were paid
out and others not
but those VAT claims were potentially prejudicial to SARS, and
therefore amount to completed acts of fraud.
The accused should,
accordingly, be found guilty of fraud on these charges.
[356] The improbability
in the accused’s version was that the exculpatory version was
withheld from SARS and the police for
at least five years. While
fully acknowledging an accused’s right to remain silent, the
probability of the accused never
providing their version to the
authorities if they were indeed innocent coupled with the evidence in
court, are too remote to be
probable.
[357] It is common cause
that the following amounts were paid into the accounts of the 18
entities, R 147,647,214.02 and the potential
loss, thus amounts not
paid out, was R68,721,518.00, this means the total VAT claimed was
R216,368,732.02.
[358] In view of the
above and taking the evidence into account in its totality, it is my
view that the State has indeed discharged
its onus and the accused’s
involvement in the VAT scam has been proven beyond reasonable doubt.
Any inferences to be drawn
from the documents are consistent with the
proven facts and exclude any other reasonable inference, save that
the accused is guilty
of fraud as per counts 1 to 198
including certain of the fraud counts , the so-called “potential
prejudice counts”,
where fraudulent VAT claims were submitted,
but not paid out.
Forgery, Uttering,
Money Laundering.
[359] What remains to
determine is whether the accused are guilty of the other counts,
counts 199 to 237 forgery, read with the
provisions of section
51(2)(a) of Act 105 of 1997. Counts 238 to 276 uttering,
read with the provisions of section
51(2)(a) of Act 105
of 1997. Counts 277 to 356 money laundering, in terms of section
4(b)(i) read with the
provisions of sections 1 and 8 of the
Prevention of Organised Crime Act 121 of 1998 (“POCA”).
[360] I will discuss the
three crimes as separate crimes as they are indeed separate. These
are not a duplication of crimes, there
are elements of each crime
which make each one unique, in other words the test of duplication
whether one crime is proof of the
other, can be applied. One can take
fraud into this scenario as well. Fraud, as we saw
supra,
is
the unlawful and intentional making of a misrepresentation which
causes actual prejudices, or which is potentially prejudicial
to
another. Forgery has not been proved when fraud has been proved, for
forgery the act of making a false document is needed, see
infra
.
Even when forgery is proved, then uttering is not proved. The act for
uttering consists in passing off or communicating a false
document.
Thus a forged document must come to the knowledge of the victim or
potential victim. Similarly, the crime of money laundering
is not
proved when any of the abovementioned crimes are proved. The act for
money laundering, a statutory crime, refers to any
act that disguises
the criminal nature or the location of the proceeds of a crime. See
infra
.
[361] The courts have
always seen forgery and uttering as two separate crimes:
R v
Johnston
1960 (2) SA 658
(T).
Forgery
[362]
Snyman’s
definition of forgery is that it “consists in unlawfully and
intentionally making a false document to the actual
or potential
prejudice of another.”
[18]
Joubert
defines
forgery as follows: Forgery is  committed by unlawfully creating
a false document with intent to defraud to the actual
or potential
prejudice of another. It is a species of fraud. In forgery the
misrepresentation takes place by way of the falsification
of a
document. Apart from this, all the requirements of the crime of fraud
must be present, such as the intent to defraud and the
actual or
potential prejudice. However, whereas fraud is completed only where
the misrepresentation has come to the notice of the
representee,
forgery is completed the moment the document is falsified. If the
document is then brought to the attention of others,
a separate
offence is committed, namely uttering the document.”
[19]
[363]
The
Supreme Court of Appeal discussed forgery in
S
v Banur Investments (Pty) Ltd
[20]
. The Honourable Judge
Rumpff quoted
S
v Dreyer
as follows: “The essence of forgery seems to me to be that the
forged document is in some way an imitation of
a genuine
document and not merely a document which contains a false statement;
it is a counterfeit or spurious representation of
a genuine document;
or it may suppose the existence of a genuine document, of which the
forgery is in some way a false representation.
Cf. Burrows,
Words
and Phrases
,
vol. 2,
s.v.
'
forgery'.”
[364]
The
honourable judge Rumpff concluded that our case law shows that
forgery of a document takes place when the contents thereof is

changed and therefore does not reflect the original contents or when,
contrary to the actual facts, purports to be drawn on behalf
of or by
a person. The learned Judge of the Appeal Court then referred to the
English law as follows: “A writing is not a
forgery when it
merely
contains
statements
which are false, but only when it falsely purports to
be
itself
that which it is not. Thus in
Re
Windsor
it
was declared: 'Forgery is the false making of an instrument
purporting to be that which it is not, it is not the making
of an
instrument which purports to be what it really is, but which contains
false statements. Telling a lie does not become a forgery
because it
is reduced into writing.' The simplest and the most effective phrase
by which to express this rule is to state that
for the purposes of
the law of forgery the writing
must
tell a lie about itself
.
Hence a conveyance which contains false recitals or states
incorrectly the price paid is not thereby 'false'. And a letter or

telegram sent to a newspaper containing false news is not a forged
document; although it would be if it were sent falsely in the
name of
one (e.g. the official reporter) who did not send or authorise the
sending of it, for in such a case it would purport to
be
his
message,
which it is not.'
[21]
[365]
The charges for forgery are summarized in schedule
“E”, “Forged Supporting Documents” and are
only applicable
to the following entities:
Counts 9-13: Copper
Sunset (2);Counts14-21; Legacy IT Solutions(3);Counts 22-24: Square
One(4);Counts 30-47: CCG Rentals (6);Count
56: Superbrush (7); Counts
72-74: Geo Relational (8);Counts 84-91: Square One Power (9);Count
115: Monkor Management (11);Counts
126-129: CCG 119 Investments
(12);Count 133:Sunmark Farms (13);Count 143: Square One Imports
(14);Counts 170-179: Sunmark International
(17);Counts 193 –
198: Multi Cupboard (18).
[366]
It has been proved by the witnesses that the VAT invoices lodged
contained  false information. The VAT claims were false
and were
submitted to SARS with the intention of defrauding SARS by securing
VAT refund claims. It has also been proved that the
documents which
were lodged in supporting the VAT claims, contained false
information. I can merely mention the witnesses who testified
in this
regard: Engelbrecht, Schoeman, Watts, Scafturis and Wright. The
supporting documentation contained false information: Me
Oliveira
tested the SAA Airwaybills, none were found. If none were found on
the system, then they were forged. Mr Schoeman investigated
91 Air
Waybills and “E” exhibits. None of these were recorded on
the system, he did an additional audit and found no
skipper or
consignee on his system. None of the Air Waybills were accepted by
SAA or a third party. None of the entities appeared
on the system. An
example: E21 (67) is an export to Greece, SAA does not fly to
Greece.  The agent code must be on it, not
on it. Incomplete
bills are not accepted. Goods description are in the wrong place.
5800 kg is too heavy. Another example: E21
(87) shows no routing
information.  Weight is  24750 kg , much more than a
flight. He did the spreadsheet.
[367]
The evidence is therefore that the accused were aware of, and played
a role in the forging of these documents, they acted
in common
purpose, as discussed
supra
, and must accordingly be found
guilty of forgery as charged.
Uttering
[368]
Snyman
defines the crime of uttering as consisting in “unlawfully and
intentionally passing off a false document to the actual
or potential
prejudice of another
.
”
[22]
It has been proved that false invoices were handed to SARS and that
the accused acted in common purpose in forging the documents
and it
has also been proved that the accused, acting in common purpose,
presented the documents to SARS.
[369] The only conclusion
to be drawn, is that the accused uttered and presented forged
documents to SARS well knowing that they
were false and in the
knowledge that they would result in actual or potential prejudice to
SARS. As a result of the submission
of these false documents, VAT
refunds which were not owing were paid out as a result of the
uttering. The State has, therefore
shown beyond reasonable doubt that
the accused is guilty of forgery and uttering as per counts 199 to
276.
Money laundering
[370] The accused, the
state alleged, laundered the proceeds of the fraudulent VAT refunds
relating to the entities especially by
way of intercompany transfers
called cheque swops.
[371] In essence money
laundering means to get “hot money” and then to get rid
of the “hot money” and then
to recycle it. The money can
be camouflaged, filtered through fake companies by means of “cheque
swaps”. Company A
swap with company B for a fake purpose. The
term “swap’ can also read “swop”. Cheque
swops could be a disguise
for money laundering.
[372]
Money
laundering refers to any act that disguises the criminal nature or
the location of the proceeds of a crime.
[23]
The provisions combating money laundering in South-Africa have
broadened this concept to virtually every act or transaction that

involves the proceeds of a crime, including the spending of funds
that were acquired illegally. POCA defines money laundering as
an
activity which has or is likely to have the effect of concealing or
disguising the nature, source, location, disposition or
movement of
the proceeds of unlawful activities or any interest which anyone has
in such proceeds and includes any activity which
constitutes an
offence in terms of s 64 of the Act.
The
courts have
relied
on the definitions set out in FICA and POCA to define money
laundering.
[373]
In section
1 of FICA
[24]
‘money
laundering’ and ‘money laundering activity’ is
defined as an activity which has or is likely to
have the effect of
concealing or disguising the nature, source, location, disposition or
movement of the proceeds of unlawful activities
or any interest which
anyone has in such proceeds and includes any activity which
constitutes an offence in terms of section 64
of FICA or section 4, 5
or 6 of POCA. POCA does not define the term ‘money laundering’
but only describes the crime
in section 4.
[374]
The
concealment element has been discussed in
a
most recent case by Nicolls J.
[25]
In this case the
accused in this matter had been specifically charged in terms of
section 4(b)(i) of POCA. The learned Judge said: “
What
is
apparent from the above cases is that in order to be found guilty of
money laundering, there must be a clear intention to hide
or conceal
what is often referred to as “hot” money. This entails
the laundering of the illegal funds to convert them
into “clean”
money, which the criminal can safely spend. As stated in De Koker,
money laundering is by its very nature
a secretive practice. I am not
persuaded that by spending the proceeds of fraud, a conviction of
money laundering should follow
axiomatically. Instead, there has to
be an element of concealment which must be proven or inferred”.
[26]
[375]
The
honourable Judge then concluded: “In this matter, the monies
were merely divided and spent by the parties. On occasion,
cheques
were deposited into the SPI Brokers bank account. This was an entity
wholly owned by the accused and no extensive investigation
would have
been required to trace the money.”
[27]
Therefore, the conclusion is that the State has to prove some action
indicating secrecy or concealment.
[376]
In the Van
Der Linde case
[28]
the
following is said about money laundering: “Money laundering is
said to take place in three stages namely placement, layering
or
integration. Placement takes place when the proceeds of crime enter
the banking system. Typically, the criminal with a large
sum of cash
moves it to another country or location so that placement can take
place with greater safety. Frequently a large sum
is split up into
smaller amounts which can then be deposited into different bank
accounts without raising suspicion. The second
stage is known as
layering, which is the process of separating the funds from their
illegal source. The source of money is disguised
by moving the funds
through accounts of financial institutions, thereby, blurring the
trail of the money.”
[377]
The 3 accused in this matter has been specifically charged in terms
of section 4(b)(i) read with the provisions of sections
1 and 8 of
POCA. Section 1 of POCA defines the proceeds of unlawful
activity as: “. . . any property or any service,
advantage,
benefit or reward which was derived, received or retained directly or
indirectly, in the Republic or elsewhere, at any
time before or after
the commencement of this Act, in connection with or as a result of
any unlawful activity carried on by any
person, and includes any
property representing property so derived.”
[378]
POCA
creates three main general money laundering offences in section 4,
section 5 and section 6.
[29]
A
person who knows or ought reasonably to have known that property is
or forms part of the proceeds of unlawful activities, commits
an
offence under section 4. Section 5 determines that if a person has
known or ought reasonably to have known that another person
has
obtained the proceeds of unlawful activities and enter in any
transactions, agreements or arrangements will commit an offence.

Lastly a person will commit an offence under section 6 if the person
who acquires, uses or possesses property and who knows or
ought
reasonably to have known that it is or forms part of the proceeds of
unlawful activities of another person.
[379]
Sections 4,
5 and 6 set out certain requirements that need to be met before an
accused is guilty of the offence of money laundering.
The first
requirement is knowledge or reasonable knowledge of property being
part of the proceeds of unlawful activities.
[30]
Secondly the person must enter into an agreement or perform an act in
connection with such property.
[31]
Thirdly, the agreement or act must have a specific and certain
effect.
[32]
The effect could
result in the concealment and disguising of the property as well as
the assistance to disguise or conceal the
property.
[380]
In
S
v De Vries
[33]
the accused were
inter
alia
charged with contravening section 4 of POCA. Two accused were selling
stolen cigarettes to a third accused. The effect of the transaction

with the third accused was to conceal or disguise the source and
location of the property forming part of the proceeds of the unlawful

activity (robbery). The court ruled that the buyer knew or should
reasonably have suspected that the cigarettes were stolen. By
buying
the cigarettes, the buyer concealed or disguised the source,
disposition or movement of property, or its ownership, therefore
all
three were found guilty of contravening section 4.
[34]
The knowledge of unlawfulness to prove intention
[35]
can be divided into two subsections:
[36]
The knowledge of the existence of the particulars of the elements of
the crime.
[37]
The knowledge
of unlawfulness or awareness of the act committed.
[38]
The accused must at least be aware that there are no grounds of
justification to cover his conduct.
[39]
[381]
The
offences in section 4, 5 and 6 can be committed either intentionally
or negligently.
[40]
It is
generally accepted that a statutory offence is committed
intentionally, unless otherwise stated.
[41]
The crime can also be committed negligently as we see from the
recurrence of the word ‘
reasonable
’.
[42]
[382]
It is
generally accepted that conduct is not unlawful unless it is
committed with a guilty mind (
mens
rea
or
fault).
[43]
Mens rea
or fault is divided into two further categories, namely intention
(
dolus
)
or negligence (
culpa
).
[44]
The two cannot overlap each other.
[45]
When it comes to common law crimes
[46]
the State must prove that an accused committed the offence with the
necessary intention.
[47]
[383]
POCA
requires that the effect of the agreement or act must be that of
concealing or disguising the nature, source, location, disposition
or
movement of the said property or the ownership thereof or any
interest which anyone may have in respect thereof; or that of

enabling or assisting any person who has committed or commits an
offence, whether in the Republic or elsewhere- to avoid prosecution;

or to remove or diminish any property acquired directly, or
indirectly, as a result of the commission of an offence.
[48]
[384]
The
concealment of the origin of the proceeds can be done in numerous
ways. The five broad themes that were identified in South
Africa as
preferable trends are:
[49]
the purchase of goods and
properties;
abuse of businesses and
business entities;
cash and currency;
abuse of financial
institutions; and
the informal sector of
the economy.
[385]
The accused are charged with section 4(b)(i) – concealing or
disguising the nature and source of the funds which they
knew to be
from the proceeds of unlawful activities.
[386]
Firstly, it must be shown that they knew or ought to have known that
the property formed the proceeds of unlawful activities.
The accused
were all deeply involved with the VAT fraud scheme and had such
knowledge as required by section 4. It is common
cause that the
VAT refunds were the proceeds of crime. The accused initiated and
managed the scheme, and as such, knew the refunds
represented the
proceeds of unlawful activities, namely fraud.
[387]
In terms of section 4(b) they must perform “any other
act in connection with such property, whether it
is performed
independently or in concert with another person”.
[388] In the case now
before the court, the money was transferred to other “accounts”
and some of it was drawn as cash.
The term “cheque swop”
or “cheque swap” was used. The state averred as follows
in the section 105 address:
“The accused, it is then alleged,
laundered the proceeds of the fraudulent VAT refunds relating to the
entities especially
by way of intercompany transfers called cheque
swops.”
[389]
There were a few witnesses referring to this term. The words “swop”
and “swap” were used interchangeably.
This does not
affect the transactions. It stays the same.
Mr
Engelbrecht testified that there were very few transactions that he
could identify that related to the normal trading activities
of the
business. The majority of the transactions that were reflected on the
bank statements were what was referred to by these
companies as
cheque swops.  Where a cheque is deposited into one account. For
instance, into CCG130 and then a cheque is issued
by CCG130 and that
is deposited into another account.
Mr Engelbrecht
drafted a four-page schedule. It is printed on A3 paper and although
the columns are not numbered there are
13 columns so it is quite a
large schedule and it contains 188 entries. This schedule was
admitted as exhibit J and Mr Engelbrecht
explained that the purpose
of the schedule was to show when cheque swaps happened and the month
where the counts occurred. Furthermore,
Mr Govender confirmed the
validity of exhibit J.
[390] Lynette Scafturis
testified concerning “cheque swaps” which were done
around the 3-page imports. Scafturis was
contacted by Wendy Wright in
this regard. She said: “We would arrange cheques in their
account, they deposit a cheque in
our account. Most times what would
happen when we need to issue a cheque, not funds, relied on their
funds..”
[391]
Mrs Wright testified concerning exhibit WW 62 (1) and (2): Wright
says the cheque books are here. He replies by asking for
VAT numbers
for certain entities (always one or more of the 18 entities)
referring to her by saying “Hi Doctor”. WW
63: Meyer
mentions a VAT billing schedule received from Coetser and asks her
for VAT numbers, company numbers and addresses. The
companies are:
Basfour , CCG Investments, Sunmark Factory, Sunmark Farms, CCG 119
Investments, GAC Management Consultants. He asked
for it because he
was going to do the invoices, the companies were taken from their
offices to his. WW 70: From Coetser to her
and Meyer. The topic is
cheque swops. Coetser says attend to the cheque swops as per the
attached and asks that the instructions
for the transfer from
Investec be emailed. She would do cheque swops, instructed by email,
from one entity to another, to the companies
they worked with. Mr
Coetser told her to clear the accounting system. She received
instructions to make the swop cheques out in
cash. The driver would
take cheques for the bank.
[392]
Mrs Scafturis corroborated this by testifying that she received email
instructions for every company. Wright had nothing to
do with their
companies but they did interact with regards to cheque swops and
other matters. She testified that all information
for the companies
came from Mr Meyer, the 3 pages, the follow-ups on VAT returns and
the cheque swops. She said she coined it “3
page specials.”
When asked what is so special she replied “Hindsight is an
amazing thing, they all stand out now.”
It was the norm to hand
3 pages in, but all other documents had more than 3 pages.
[393]
Concerning the cheque swops, counsel for Coetser said that it still
shows a profit. She said the spreadsheet showed an alleged
profit,
the cheque swops give the money back, she therefore disagrees with
the inference that the profit was left there. Counsel
then said that
the witness is not an auditor. She replied that the emails show there
was no cost of sales. It was deemed to be
no cost of sale.
[394]
The accused performed the following actions in connection with the
proceeds of unlawful activities: they received VAT refunds,
paid into
various accounts of the 18 entities, These proceeds were deposited
into the accused’s “other” bank
account and could
not be traced thereafter.
[395]
The final and crucial requirement of section 4(b)(i) is whether the
accused’s actions had the effect of concealing or
disguising
the nature, source, location or disposition of the funds. As far as
disguising is concerned, the State submitted that
the drawing of the
cash cheques disguised the origin of the money. Similarly, the
cheques deposited into the other bank accounts
by way of cheque swops
were likely to disguise the origin. The reasoning is that once
deposited or withdrawn or transferred into
the other bank accounts,
the proceeds co-mingled with other legitimate funds and became
difficult to trace. The cheques represented
unlawful proceeds which,
once deposited into an active account that ordinarily receives
deposits from lawful business, had the
effect of legitimising these
proceeds. Such conduct is said to be money laundering.
[396] On the State’s
own version, the accused were the masterminds behind the unlawful VAT
scheme. The accused acted in common
purpose in this regard. The
accused are therefore guilty as charged.
Conclusion
[397] I am satisfied that
the State has discharged the onus resting upon it of proving beyond
reasonable doubt that the accused
Mr Anton Meyer (accused one), Mr
Garth Alan Coetser (accused two) and Mr Clifford Lloyd Stevens
(accused three) are guilty of the
following counts:
Counts 1 to 198 fraud,
read with the provisions of section 51(2)(a) of Act 105
of 1997.
Counts 199 to 237
forgery, read with the provisions of section 51(2)(a) of
Act 105 of 1997.
Counts 238 to 276
uttering, read with the provisions of section 51(2)(a) of
Act 105 of 1997.
Counts 277 to 356, which
is known as money laundering, in terms of section 4(b)(i), read
with the provisions of sections
1 and 8 of the Prevention of
Organised Crime Act 121 of 1998 (“POCA”).
IT IS SO ORDERED
KLEIN A/J
For the State: Adv M.R.
Oosthuisen and Adv N Reddy
For accused one: In
person
For accused two: Adv M Du
Preez instructed by Jacobs Incorporated Attorneys, Johannesburg.
For accused three: Adv P
Louw instructed by Attorney Bayliss.
[1]
[1966] 4 All SA 523 (A)
[2]
At page 528
[3]
[1976]
2 All SA 111 (E)
[4]
Duke Law Journal, Vol 1960:457
[5]
Section 202
of the
Criminal Procedure Act 51 f
1977 provides for
protection from disclosure where the public or state interest is
concerned and protection where information
given for the detection
of crime is looked at.
[6]
S v Zuma
2006 (2) SACR 191
(W) at page 199E-F
[7]
[2006]
4
All SA 165
(W)
[8]
Papadopoulas
and Snail. ‘Cyberlaw@SA III. Third Edition 322.
[9]
Mason
in Papadopoulas and Snail. ‘Cyberlaw@SA III. Third Edition 323
[10]
Zaffert
and Paizes 2009: 829-839.
[11]
Irish
Law Commission. Consultation Paper. Documentary and Electronic
Evidence (LRC CP 57-2009) 153 as cited in Papadopoulas and
Snail.
‘Cyberlaw@SA III. Third Edition 322.
[12]
Maseti
v S,
(353/13)[2013]
ZASCA 160 (25 November 2013): Wallis JA at [33]
[13]
Schwikkard
& Van der Merwe.2015. Principles of Evidence. Claremont. Juta
(Softcover), p20.
[14]
S v
Trainor
2003 (1) SACR 35 (SCA),
[also reported as
Trainor
v S
[2003]
1 All SA 435
(SCA),
S
v van der Meyden
1999 (2) SA 79 (W),
S
v van Aswegen
2001 (2) SACR 97 (SCA),
also reported as
Van
Aswegen v S
[2001]
JOL 8267
(SCA)
[15]
[2009] 1 All SA 237
(SCA).
[16]
See also
R
v Mlambo
1957 (4) SA 727 (A)
at 738 also reported at
[1957] 4 All SA 326
(A) and
S
v Phallo and others
1999 (2) SACR 558 (SCA)
para [10] and [11],also reported as
Phallo
and others v S
[1999]
JOL 5789
(SCA).
[17]
CR Snyman
Criminal
Law
(6ed)
(2014).
[18]
Snyman,supra, at 532
[19]
Joubert:
The Law of South Africa: 2
nd
Ed:
V6
para 317
[20]
1970
(3) SA 767 (A)
[21]
At bottom page 772 and top page 774
[22]
Snyman, supra at 535
[23]
L de Koker ‘Money laundering trends in South Africa’
(2002)
Journal
of Money Laundering Control
(6
No1) 27
[24]
Financial Intelligence Centre Act 38 of 2001
[25]
S
v Van der Linde
[2016] 3 All SA 898
(GJ), the accused was found guilty of fraud.
[26]
Van Der Linde,supra,par124
[27]
Van Der Linde ,supra, par 125
[28]
Van Der Linde, supra, page 112
[29]
L de Koker ‘ Money Laundering Trends in South Africa’
(2002)
Journal
of Money Laundering
Control
(Vol 6 No 1) 28.
[30]
Section 4
,
5
and
6
of POCA.
[31]
Section 4
,
5
and
6
of POCA.
[32]
Section 4(b)(i)
and (ii) of POCA.
[33]
S v De
Vries and others
2009 (1) SACR 613 (C).
[34]
S v De
Vries and others
2009 (1) SACR 613 (C).
[35]
S v
Ntuli
1975 1 SA 429
(A) 436
The
court states that
dolus
consists of the intention to commit
an unlawful act.
[36]
Snyman, CR
Criminal
Law
(2008) 201.
[37]
Snyman supra, 201.
[38]
Snyman, supra, 201.
[39]
Snyman,supra, 97 & 201.
[40]
L de Koker ‘Money Laundering Control: The South African Model’
(2002)
Journal
of Money
Laundering
(Vol 6 No 2) 167.
[41]
J Burchell
Principles
of Criminal Law
(2016) 396
[42]
Section 1(3)
of the POCA.
[43]
J Burchell & J Milton
Principles
of Criminal Law
(2005) 151.
[44]
S v De
Blom
1977
3 SA 513
(A) 529.
J
Burchell & J Milton
Principles of Criminal Law
(2005)
152.
[45]
S v
Ngubane
1985 3 SA 677
(A) 686
Also
see JC De Wet & HL Swanepoel
Strafreg
(1985) 160.
[46]
CR Snyman
Criminal
Law
(2008)
209; states that the two exceptions to this rule are culpable
homicide
and contempt of court by a newspaper editor in whose paper
commentary is   published concerning a pending case.
[47]
J Burchell
Principals
of Criminal Law
(2016)
398.
[48]
Section 4(b)
of the POCA
[49]
L de Koker ‘ Money Laundering Trends in South Africa’
(2002)
Journal
of Money Laundering
Control
(Vol 6 No 1) 31.