SARS claiming BILLIONS from Sasfin over alleged facilitation of tobacco money laundering scheme

Last year, the airing of Al Jazeera's 'Gold Mafia' investigative series put the spotlight on gold smuggling gangs in Southern Africa that help criminals launder hundreds of millions of dollars using a complex web of companies and counterfeit identities.

It found that officials at some major South African banks were helping a smuggling ring launder the dirty cash in exchange for regular bribes.

One of these banks was Sasfin.

Now the South African Revenue Service (SARS) is claiming billions in damages it says it suffered due to tax losses facilitated by Sasfin Bank.

Sasfin Holdings confirmed on Tuesday that the Bank had received a civil summons, for a total amount of R4,87 billion plus interest and costs, in the form of a damages claim instituted by SARS.

In its statement, Sasfin describes the move as 'unprecedented in South African law'.

"This summons relates to SARS’ purported inability to collect income tax, value-added tax, and penalties allegedly owed by former foreign exchange clients of the Bank."

Sasfin Holdings

Confirming the legal proceedings against Sasfin Bank, SARS alludes to its investigation into local taxpayers who had not made true and accurate tax disclosures, without naming Sasfin.

The revenue service alleges that at least R8.2-billion in untaxed funds, linked to the vast Gold Leaf Tobacco Corporation money laundering racket, were unlawfully sneaked out of the country over the past decade, reports Daily Maverick.

This was achieved mainly with the help of 11 Sasfin employees, writes Pauli van Wyk, investigative journalist at Daily Maverick's Scorpio unit.

"The backstory involves SARS’s initial findings in 2022 that at least five Sasfin employees assisted an extraordinary transnational plunder network operated by Zimbabwean tobacco boss Simon Rudland in moving at least R3-billion offshore without paying tax."

"In this latest court action, SARS told the Gauteng Division of the High Court in Pretoria that investigators found that 19 companies linked to Rudland’s business operations used the Sasfin system over the course of a decade to unlawfully – and mostly unnoticed – sneak R8.2-billion offshore."

Pauli van Wyk, Investigative Journalist - Daily Maverick's Scorpio unit

Bruce Whitfield gets some insight into this convoluted scheme from van Wyk on The Money Show.

It is a devastating turn of events for Sasfin remarks van Wyk, despite the company chiefs saying they acted immediately when the information first came to light.

"SARS neatly points out that in 2016 there were already indications; in 2017 there were more, and the relationship with GLTC was severed... but by 2020 SARS' Rutland investigation had snowballed and by 2022 SARS was kicking the Sasfin doors down."

"Sasfin then had to acknowledge that at least R2 billion was moved out of its accounts without it knowing, and now we're standing at R8 billion."

Pauli van Wyk, Investigative Journalist - Daily Maverick's Scorpio unit