S v Van der Linde

• Jurisdiction: South Africa
• Judgment Date: 27 May 2016
• Citation: 2016 (2) SACR 377 (GJ)

S v Van der Linde
2016 (2) SACR 377 (GJ)

2016 (2) SACR p377

Citation	2016 (2) SACR 377 (GJ)
Case No	12331/12
Court	Gauteng Local Division, Johannesburg
Judge	Nicholls J
Heard	April 18, 2016
Judgment	May 27, 2016
Counsel	F Roets for the accused.; M Oosthuizen for the state.

Flynote : Sleutelwoorde

Prevention of crime — Offences — Contraventions of s 4 of Prevention of B Organised Crime Act 121 of 1998 — Money-laundering — What constitutes — Fraudulent VAT refunds deposited into business accounts and then immediately withdrawn by means of cash cheques or deposited into another business account — Where no attempt at concealment, money-laundering not proven. C

Headnote : Kopnota

The accused was charged in the High Court with 255 counts of fraud, 1 count of forgery, 1 count of uttering and 63 counts of money-laundering in contravention of s 4(b)(i) as read with the provisions of ss 1 and 8 of the Prevention of Organised Crime Act 121 of 1998 (POCA). The counts all D related to a fraudulent VAT scheme masterminded by the accused who was the accounting officer or representative of an accounting firm. The scheme involved defrauding Sars by claiming fraudulent tax refunds in respect of four business entities over a period of eight years. The court found the accused guilty on all the counts of fraud, forgery and uttering, and then considered the issue of the money-laundering counts which involved the deposit into an account of an entity of which the accused was the sole E member. Twenty-six cheques, which were the proceeds of the fraudulent tax refunds, were paid into this account. The state contended that cashed cheques issued from that account had the inherent effect of concealing property. It was submitted that the drawing of the cash cheques disguised the origin of the money and, once deposited into that account, the proceeds co-mingled with other legitimate funds and became difficult to trace. It accordingly legitimised those proceeds and constituted money-laundering F as envisaged by POCA.

The court held that for a contravention of the section there had to be a clear intention to hide or conceal the 'hot' money. This entailed the laundering of the legal funds to convert them into 'clean' money which the criminal could then safely spend. Money-laundering was by its very nature a secretive practice but the spending of the proceeds of the tax refunds had G not been concealed at all. One of the weaknesses of the VAT scheme was the ease with which the money trail could be followed. Almost immediately after a refund was deposited it was withdrawn in full and cashed or deposited into one of the accounts. In those circumstances, where there was no attempt at concealment, the accused could not be found guilty on the money-laundering counts. (Paragraphs [124]–[125] at 402b–f.) H

Cases cited

R v Gumede 1949 (3) SA 749 (A): applied

R v Mlambo 1957 (4) SA 727 (A): referred to I

S v De Vries and Others 2012 (1) SACR 186 (SCA) ([2011] ZASCA 162): compared

S v Francis 1991 (1) SACR 198 (A): applied

S v Gentle 2005 (1) SACR 420 (SCA): applied

S v Hlapezula and Others 1965 (4) SA 439 (A): applied

S v Masuku and Others 1969 (2) SA 375 (N): dicta at 376 – 377 applied J

2016 (2) SACR p378

S v Monageng [2009] 1 All SA 237 (SCA): considered A

S v Moosagie and Another [2012] ZAECPEHC 31: compared

S v Phallo and Others 1999 (2) SACR 558 (SCA): referred to

S v Prinsloo and Others 2016 (2) SACR 25 (SCA) ([2015] ZASCA 207): compared

S v Sithole [2006] ZASCA 173: applied

S v Trainor 2003 (1) SACR 35 (SCA) ([2003] 1 All SA 435): applied B

S v Van der Meyden 1999 (1) SACR 447 (W) (1999 (2) SA 79): applied

S v Van Aswegen 2001 (2) SACR 97 (SCA): applied.

Legislation cited

Statutes

The Prevention of Organised Crime Act 121 of 1998, ss 1, 4(b)(i) and 8: see Juta's Statutes of South Africa 2015/16 vol 1 at 2-564.

Case Information

F Roets for the accused. C

M Oosthuizen for the state.

A criminal trial in the High Court on numerous counts of fraud, forgery, uttering and money-laundering in contravention of the provisions of the D Prevention of Organised Crime Act 121 of 1998.

Order

The accused is guilty of fraud as set out in counts 1 – 255, of forgery as per count 256 and of uttering as per count 257. On counts 263 – 326, money-laundering, he is found not guilty and on counts 327 – 381 — the E acquisition of the proceeds of unlawful activities — he is found not guilty.

Judgment

Nicholls J:

[1] The accused, Mr Ivan Don van der Linde, was arrested on F 30 August 2005 and tried in the regional court, Germiston, on 255 charges of fraud. After a protracted trial characterised by inordinate delays, the accused was discharged and acquitted at the end of the state's case in terms of s 174 of the Criminal Procedure Act 51of 1977 (the CPA).

[2] The state appealed this matter to the High Court in terms of s 310 G of the CPA and on 12 December 2013 the appeal was upheld. It was ordered that the trial start de novo before a different magistrate. On 12 December 2014 the matter was transferred to the High Court for trial. On 18 April 2016, the first day of this trial, the defence raised a point in limine. Essentially three points were argued: firstly that the order H of the appeal court was not competent; secondly, that the undue delays rendered the trial unfair; and, thirdly that the state was not entitled to charge the accused with additional charges of money-laundering.

[3] The point in limine was dismissed on 18 April 2016 and the trial proceeded forthwith.

I [4] The accused is charged now with the following counts:

•

Counts 1 – 255, fraud, read with the provisions of s 51(2)(a) of the Criminal Law Amendment Act 105 of 1997 (the CLAA);

•

count 256, forgery, read with the provisions of s 51(2)(a) of the CLAA;

•

count 257, uttering, read with the provisions of s 51(2)(a) of the J CLAA;

2016 (2) SACR p379

Nicholls J

•

counts 258 – 262 and count 273 were withdrawn; A

•

counts 263 – 326 (with the exception of count 273), money-laundering, in terms of s 4(b)(i) read with the provisions of ss 1 and 8 of the Prevention of Organised Crime Act 121 of 1998 (POCA); and

•

counts 327 – 381, acquisition of the proceeds of unlawful activities, in terms of s 6(a) read with the provisions of ss 1 and 8 of POCA. B

[5] The accused tendered a written plea explanation in which he challenges the constitutionality and the fairness of the trial but states that despite severe prejudice to him he will nonetheless subject himself to this trial. Although in his plea explanation the accused categorically stated that he would not make any admissions, during the testimony of the first C witness, Mr Du Toit, a Sars investigator, the accused did indeed make certain admissions in terms of s 220 of the CPA, which form part of the record.

[6] The state's case is that the accused in this matter, Mr Van der Linde, acted as the accounting officer or representative of an accounting firm, D Ivan van der Linde & Associates, and acting in common purpose with Mr John Mmemo Nkosi who is now deceased, Mr Antonio Carlos Olim and Ms Fabienne Anne Francillon, operated a fraudulent VAT scheme. The accused was the mastermind behind the scheme to defraud Sars by claiming fraudulent tax refunds in respect of four entities during the E period June 1997 to March 2005. The accused's accounting firm was itself not registered for VAT and was used as a vessel to perpetrate the fraudulent VAT scheme against Sars.

[7] The first of the four entities is Andeltru CC t/a Trans Lebombo Exports (Andeltru), of which Mr Nkosi was the sole member. According F to sch A of the indictment, 86 VAT refunds were claimed in respect of Andeltru. The second entity is Siani Trade (Pty) Ltd t/a Johnny Paulos Liquor Merchants (Siani Trade), of which one Mr ADM de Gouveia (De Gouveia) was the sole director. According to sch B of the indictment, 17 VAT refunds were claimed in respect of Siani Trade. The third G entity is Limoges Impex Trading CC (Limoges), of which Ms Francillon was the sole member. This close corporation was previously known as Ivan Prop 10 CC and changed its name to Limoges shortly before registering for VAT. According to sch C of the indictment, 56 VAT returns were claimed in respect of Limoges. The fourth entity is Allied Charcoal CC t/a Cambia Commodity (Allied Charcoal), of which Laura Olim, H Mr Olim's elderly mother, was the sole member. According to sch D of the indictment, 94 VAT returns were claimed on behalf of Allied Charcoal.

[8] It is further alleged that Sars conducted several audits on the I 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.

[9] The accused, it is then alleged, laundered the proceeds of the fraudulent VAT refunds relating to Andeltru, Siani Trade and Allied J

2016 (2) SACR p380

Nicholls J

A Charcoal. The accused entered into agreement, relating to the acquisition of proceeds, with Mr Olim and Ms Francillon whereby the accused was to share in the proceeds of all the fraudulent refund payments paid out to the four entities.

[10] The primary witness for the state was Mr Morné du Toit, a criminal B investigator employed by Sars and stationed at the Sars office in Alberton. He commenced his testimony with an explanation of the VAT system, which he described as an indirect self-assessment system. The registration of a company as a VAT vendor occurs when its turnover exceeds a certain amount. At the time when the four entities were registered this threshold was R150 000 per annum. The registration C document for VAT which is submitted to Sars is the VAT101. The VAT...