Corruption at Cipro 'funds global terror'
Forensic report rings alarm bells on Pakistani connection to fraud May 9, 2010 12:00 AM By NKULULEKO NCANA and ANTON FERREIRA
Security agencies are probing startling charges that Pakistani criminals, taking advantage of corruption and chaos within the Companies and Intellectual Property Registration Office (Cipro), have stolen millions of rands from the government to fund terrorism.
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A report into Cipro by forensic investigators, commissioned by the Department of Trade and Industry (DTI), says "numerous" Pakistanis were involved in the scheme, which relied on corrupt officials within the organisation.
The report, which has been seen by the Sunday Times, is now in the hands of the minister of trade and industry, Rob Davies, who said its findings had been passed on to law-enforcement agencies to investigate.
Minister of police Nathi Mthethwa said this week: "Police are dealing with it, not only police - the security establishment is on it (the report). It's the entire team."
The report states: "It is established that SAPS crime intelligence, SASS (South African Secret Service) and the NIA (National Intelligence Agency), along with the US embassy, are vigorously engaged in gathering intelligence on possible terrorism links."
It goes on to say: "The investigations around this particular case centre on tax fraud, money laundering, racketeering, organised crime, fraud and financing of international terrorism."
A Pakistani now in custody in Gauteng, Aliraza Siyed Naqvi, is suspected of involvement in the "cloning" of legitimate companies, including Sun Microsystems, in a scheme to steal R144-million in tax refunds from SARS.
Some details of the fraud were revealed last year, when at least five Cipro officials were suspended, but it has now emerged that much of the money involved could have funded international terror.
The forensic report lays bare how corruption within Cipro and other government agencies had turned South Africa into a happy hunting ground for criminals across the world, who use false identities and fake companies to circumvent international curbs on money laundering.
SARS spokesman Siba Mfabe said West Africans were involved, along with Pakistanis, in the company-cloning scheme uncovered last year, using "quite a sophisticated level of different skills".
"The revenue service is considered quite a cash-rich target on the continent," he said. "International syndicates are constantly a problem, and they offer very lucrative bribes as well."
Revelations of the cancer within Cipro, whose integrity and efficiency are vital to the smooth running of the country's economy, have sparked infighting at the top levels of the DTI.
The report said the Pakistanis involved used fake South African identity documents from the Department of Home Affairs.
A possible link between Naqvi and groups involved in sectarian violence in Pakistan has been identified through his brother, Asad Abbas Naqvi, who was murdered in South Africa in December 2008.
A man of the same name is listed as "a very dangerous terrorist" by authorities in the Pakistani province of Punjab.
Davies said last month the private forensic probe had been halted in March after it drew a "broad picture" of the problems at Cipro.
He said at the time he was seeking legal advice on how to proceed because of the potential of major litigation, and efforts were under way to "purify" the data held by Cipro.
The private forensic report estimated that up to 285000 fake or dubious companies had been created through abuse of the Cipro system.
In the Sun Microsystems case, the Pakistani suspects used agencies that specialise in dealing with Cipro to register a fake company with the same name and its own bank account.
With the probable help of corrupt officials in SARS, R17-million in tax refunds owing to the legitimate Sun Microsystems was diverted into the bank account of the fake company.
Sun Microsystems' financial director, Steven Stalley, said the parent company's attorneys had issued instructions that no one should discuss the issue.
The forensic report said nearly 60 Cipro employees had been identified as being involved in suspicious activities.
Forensic report rings alarm bells on Pakistani connection to fraud May 9, 2010 12:00 AM By NKULULEKO NCANA and ANTON FERREIRA
Security agencies are probing startling charges that Pakistani criminals, taking advantage of corruption and chaos within the Companies and Intellectual Property Registration Office (Cipro), have stolen millions of rands from the government to fund terrorism.
Current Font Size:
A report into Cipro by forensic investigators, commissioned by the Department of Trade and Industry (DTI), says "numerous" Pakistanis were involved in the scheme, which relied on corrupt officials within the organisation.
The report, which has been seen by the Sunday Times, is now in the hands of the minister of trade and industry, Rob Davies, who said its findings had been passed on to law-enforcement agencies to investigate.
Minister of police Nathi Mthethwa said this week: "Police are dealing with it, not only police - the security establishment is on it (the report). It's the entire team."
The report states: "It is established that SAPS crime intelligence, SASS (South African Secret Service) and the NIA (National Intelligence Agency), along with the US embassy, are vigorously engaged in gathering intelligence on possible terrorism links."
It goes on to say: "The investigations around this particular case centre on tax fraud, money laundering, racketeering, organised crime, fraud and financing of international terrorism."
A Pakistani now in custody in Gauteng, Aliraza Siyed Naqvi, is suspected of involvement in the "cloning" of legitimate companies, including Sun Microsystems, in a scheme to steal R144-million in tax refunds from SARS.
Some details of the fraud were revealed last year, when at least five Cipro officials were suspended, but it has now emerged that much of the money involved could have funded international terror.
The forensic report lays bare how corruption within Cipro and other government agencies had turned South Africa into a happy hunting ground for criminals across the world, who use false identities and fake companies to circumvent international curbs on money laundering.
SARS spokesman Siba Mfabe said West Africans were involved, along with Pakistanis, in the company-cloning scheme uncovered last year, using "quite a sophisticated level of different skills".
"The revenue service is considered quite a cash-rich target on the continent," he said. "International syndicates are constantly a problem, and they offer very lucrative bribes as well."
Revelations of the cancer within Cipro, whose integrity and efficiency are vital to the smooth running of the country's economy, have sparked infighting at the top levels of the DTI.
The report said the Pakistanis involved used fake South African identity documents from the Department of Home Affairs.
A possible link between Naqvi and groups involved in sectarian violence in Pakistan has been identified through his brother, Asad Abbas Naqvi, who was murdered in South Africa in December 2008.
A man of the same name is listed as "a very dangerous terrorist" by authorities in the Pakistani province of Punjab.
Davies said last month the private forensic probe had been halted in March after it drew a "broad picture" of the problems at Cipro.
He said at the time he was seeking legal advice on how to proceed because of the potential of major litigation, and efforts were under way to "purify" the data held by Cipro.
The private forensic report estimated that up to 285000 fake or dubious companies had been created through abuse of the Cipro system.
In the Sun Microsystems case, the Pakistani suspects used agencies that specialise in dealing with Cipro to register a fake company with the same name and its own bank account.
With the probable help of corrupt officials in SARS, R17-million in tax refunds owing to the legitimate Sun Microsystems was diverted into the bank account of the fake company.
Sun Microsystems' financial director, Steven Stalley, said the parent company's attorneys had issued instructions that no one should discuss the issue.
The forensic report said nearly 60 Cipro employees had been identified as being involved in suspicious activities.
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