Zimra workers in $50m VAT fraud
FOUR Zimra employees allegedly defrauded the authority of almost $50 million by reactivating four dormant companies in the Zimra systems and then claiming large VAT refunds, taking advantage of Zimra’s switch from physical visits to clients claiming refunds to reliance on virtual checks.
Three have so far been arrested with a fourth now on the run. Valentine Chireke (35), Tawonga Nhengu (33) and Leonard Mazanhi (34) appeared before Harare regional magistrate Mr Stanford Mambanje yesterday for remand.
They were remanded in custody until tomorrow when their bail application, which is opposed by the State, will be heard.
The idea for the scam was generated, according to the State, in August last year when Zimra through its Commissioner of Customs resolved to waive physical inspection to its clients claiming VAT refunds. Previously, Zimra would visit clients for physical assessments before processing claims.
It is alleged that the three, acting in connivance with Batanai Zengeni who is still at large, then hatched the plan to defraud Zimra.
The court heard that Chireke identified four companies dormant in the Zimra system: Katumi Investments, Nutroil Pvt Ltd, May Computers and Hefa Electrical. He allegedly gave the company details to Nhengu and Mazanhi who then generated a Zimra e-services PIN for each of the four companies so that they could interact with Zimra online. The gang then submitted VAT returns online to enable claiming of refunds.
Between August 5 and October 28 last year, the four allegedly managed to fraudulently open accounts for the four companies at BancABC.
They beat the normal Know your Customer (KYC) procedures because the required interviews were held virtually using a mobile phone number as a result of lockdown restrictions.
KYC documentation was sent to the four through e-mails and they successfully opened bank accounts for the four companies.
They then fraudulently tendered documents to Zimra purporting that the companies had changed their banking details, to the ones the four suspects had opened, and submitted VAT refund claims to Zimra well knowing that the claims were false.
It is alleged that acting on the misrepresentation, Zimra paid VAT refunds amounting to $49 399 736 to the companies.
Between November 27 last year and March this year, the four then allegedly cleaned out the fake company accounts moving the cash into other accounts in a bid to launder the proceeds of the crime.
The offence came to light on March 10 when a Zimra internal audit identified a high volume of cash on VAT refunds that had been paid to the dormant companies.
Chireke was arrested and allegedly two mobile phones used to withdraw money were recovered leading to the arrest of the other two and a manhunt for the fourth alleged suspect.