The Cape Town Regional Court has sentenced a Vredenburg businessman who defrauded the South African Revenue Services (SARS) of millions of rands, to three years house arrest with community service.
Flip Roger Lambert was also fined R256 000 following his conviction on more than a thousand counts of the contravention of the Value Added Tax Act, failing to pay VAT to SARS, failure to provide VAT 201 returns within the prescribed period to SARS and failure to pay over VAT collected to SARS.
The value of the collected VAT that was not paid over, if inflation is considered, is R17,36 m.
Lambert received various fines or prison sentences suspended for five years, on the condition that he was not convicted for the same offences during the period of the suspended sentences.
The court imposed the house arrest sentence and fine, after finding that Lambert badly ran his business, Ocean Security and that no money was spent on lavish gifts or overseas trips, neither was large amounts transferred nor disposed of for no good reasons.
The VAT money was used to keep the business afloat until it collapsed. Lambert’s company supplied security services on the West Coast, starting in Vredenburg.
He registered himself as a taxpayer in 1997, and also registered himself for VAT in the same year. He presented himself as the responsible person for VAT responsibilities.
He also registered as an employer in October 1997, collected the VAT under his name and paid it over to SARS.
On 12 June 2000, he acquired a 75% stake in a CC which he renamed in August 2000, to Respect Security CC. It would however trade as Ocean Security, thus the same name he used trading as a sole proprietor.
The remaining 25% interest in the CC was held by his then-wife, Dorina Johanna Lambert.
The accused told the court that when he started his business, he had two mentors who told him that the salaries of the workers came first and after that came any other debts.
The business was surviving on the VAT money it was receiving.
“Both Lambert’s auditor and a SARS official warned him about repercussions of not paying his debt.
“The auditor even made him sign documents as proof that he had been informed of the VAT problems he was facing. After the SARS investigator warned him that the revenue services were investigating him for non-payment of VAT, the only thing the accused did was to stop submitting VAT 201 returns until the business finally collapsed.
“The court found his then-wife not guilty, as it was clear he was the one making financial decisions.
“It was also proved that he was the only person who authorised payments and was always the person responsible for VAT.” explained Ntabazalila.
The magistrate informed Lambert that his age, the fact that he was a first offender and that he was paying support for several children was all that kept him out of prison.
“The court accepted his version, that it was never his intention to defraud SARS, he had declared the VAT and always planned and hoped to pay it back.
“The court also accepted that what on face value appeared to be questionable actions, was just a business being run very badly by someone who was way over his head.” concluded Ntabazalila.