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The SA Revenue Service, a department which actively seeks out fraudsters, had one of its own former employees handed a 15-year jail term for fraud in the Durban Regional Court on Wednesday.
Gauteng resident, Philemon Madingwane, 45, pleaded guilty to defrauding Rhema Clothing Manufacturers in September this year.
According to his plea, Madingwane’s job at Sars involved verifying transactions, capturing, filing and making amendments to duty credit certificates.
He explained that Sars received the certificates from the International Trade Administration Commission. These were sold to textile companies and used to import fabric.
Madingwane claimed that a businessman Priyen Naidu, who sells the certificates, had asked him to inflate the value of a certificate he was going to sell to Rhema to R8.9m from R2.9m. He said Naidu had paid him R160 000 and also promised to pay back this added amount. He claimed that this was not the first time he had inflated certificates for Naidu, who had deposited money into his bank account for the service. Madingwane resigned from his job before his arrest.
In aggravation of sentence, Sars auditor Pranesh Maharaj said the revenue service had suffered a loss of R5.5m in customs duty and R770 000 in value added tax (VAT) as a result of Madingwane’s fraudulent activities.
He said Rhema Clothing would claim against Sars for its losses as well. Madingwane’s attorney S Ngceza had argued in mitigation against a prison sentence, as he said his client had both hypertension and diabetes.
In her judgment, magistrate Fikile Luvuno emphasised the prevalence of the offence and that Madingwane had been trusted by his employers.
“The accused states that he does not remember how many payments were made to him by Naidu. Therefore one would wonder about how many activities the accused carried out for Naidu and how much money he received before his arrest. The accused should have been charged with corruption as well because what he did amounts to that crime as well as fraud.”
Luvuno said there were no substantial or compelling circumstances to deviate from the minimum sentence of 15 years.
The private investigator Rhema Clothing had hired, Sean Pierce, who assisted the police said on Wednesday that justice had been done.
Naidu, who is on trial for double murder, has been charged with fraud. – The Mercury
