VAT fraud scheme leads to six-year prison sentence for former SARS employee
Michael Benson, a former SARS employee, has been sentenced by the Bellville Regional Court to six years in prison for orchestrating a VAT fraud scheme.
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Former South African Revenue Service (SARS) employee and registered tax practitioner Michael Benson has been sentenced to an effective six years in prison after being convicted of a large-scale VAT refund fraud scheme that ran for more than two years.
The Bellville Regional Court in Cape Town found Benson guilty on 11 counts of fraud for submitting false VAT201 returns, 27 counts of fraud for supplying forged supporting documents, 24 counts of forgery, 24 counts of uttering, and one count of failing to keep proper records.
According to the National Prosecuting Authority (NPA), State Advocate Wimpie Els led evidence showing that over a period of 25 months, Benson “submitted eleven fraudulent VAT201 returns to SARS, claiming refunds based on wholly fabricated information”.
When SARS requested substantiating proof, he “committed further fraud by producing forged invoices, bank statements, and municipal contracts.”
Benson previously worked at SARS as a VAT auditor and compliance officer between 1997 and 2000.
During the period when he allegedly committed the offences, he was a qualified and registered tax practitioner. The NPA said he “submitted eleven (11) false VAT201 returns to SARS, fraudulently claiming an amount of R1.7 million”.
SARS ultimately paid R1.58 million before blocking his final claim after uncovering the fraud.
Despite SARS’s intervention, Benson continued producing falsified paperwork.
“He fraudulently produced forged tax invoices purporting to justify the VAT refunds received, which were presented to SARS as being genuine invoices,” the NPA said.
Advocate Els submitted that the accused “did not voluntarily desist from his unlawful conduct. This occurred solely due to the SARS intervention” and that Benson “persisted in his fraudulent scheme by fabricating additional false invoices, bank statements, and municipal documentation to legitimise the misappropriated funds.”
The court also heard that Benson, as a professional tax practitioner, was expected to uphold strict ethical and statutory duties, but instead “elected to act unlawfully for personal enrichment”.
For the 37 counts of fraud taken together, the court sentenced Benson to 10 years’ imprisonment, four of which were suspended on the condition that he does not commit similar offences during the suspension period.
He received a further four-year sentence for forgery and uttering, wholly suspended for five years, and a R4,000 fine for failing to keep proper records, also fully suspended.
The court declared him unfit to possess a firearm and authorised a warrant for the seizure of all firearms, licences, and ammunition in his possession.
The NPA said: “This sentence sends a decisive message that the NPA will not tolerate fraud, abuse of public trust, or the manipulation of tax systems for personal gain.”
It added that “those who defraud the state or exploit citizens will be brought to justice.”