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Sunday, 27 September 2009 08:54

Men Who Stole TRA’s $77m Nailed

By Staff writer

DAR ES SALAAM, Tanzania, Sept 27 (Guardian On Sunday) - At least five Tanzanians are part of the syndicate that planned and executed a massive financial fraud that saw the Tanzania Revenue Authority lose an estimated $77million, according to The Guardian on Sunday.


Earlier reports claimed that the theft involving the siphoning of tax collections paid by the Tanzania Telephone Company Ltd (TTCL) was masterminded by an international syndicate, but The Guardian on Sunday has learnt that some of the top men behind this scam are the sons of some prominent civil servants.


Five local companies operating in Dar es Salaam received the stolen billions, acting in the same capacity in which the 13 companies that looted taxpayers’ billions in the external payment arrears account (EPA) scandal benefited.


So far investigators from the Prevention and Combating of Corruption Bureau (PCCB) have established that these five Tanzanians are the prime suspects who siphoned Sh5,876,680,677.74 ($5million) in taxes meant to have been paid by the TTCL to the TRA.


The Guardian on Sunday has also established that the PCCB has so far confiscated almost 20 luxury cars, including a BMW-M3, Range Rover Vogue, Toyota Lexus and others believed to have been bought with the stolen money.


The PCCB also investigated 14 upscale houses built between July and May which are suspected to have been financed with the dirty money.


The posh houses are located in the Mbezi Beach, Sala Sala, Bahari Beach and Masaki suburbs of Dar es Salaam as well as the Buhongwa suburb outside of Mwanza city on the southern shores of Lake Victoria.


The carefully orchestrated theft was carried out between June 2008 and January 2009, before the TRA detected the missing money with the Tanzania Interbank Settlement Systems (TISS) — the electronic money transfer system introduced in the country in 2004.


The five suspects known so far are Marcus Masilla from TTCL, Tuseke Anangisye and Paschal Mayila from the TRA, and Faraji Augustine and Nicholas Kwale from NBC Ltd.


One of the suspects was arrested in Nairobi while trying to escape. He was repatriated to his country two weeks ago according to sources within TTCL and PCCB.


According to details seen by The Guardian on Sunday, at least three local banks were used in what could be the second biggest corporate fraud in the country's history after the 2005 looting of the central bank's EPA account, in which the government lost $131 million in dubious payments to 22 local firms.


The banks used to transfer at least part of the stolen TRA money include Standard Chartered Bank, National Bank of Commerce and Barclays Bank, The Guardian on Sunday has established.


After detecting the theft, TTCL and the TRA jointly informed Tanzanian police in January this year, but after four months of investigation, the Force had still failed to apprehend the suspects.


Alarmed by the police failure, TTCL officials approached Anti-corruption czar Dr Edward Hosea who finally assigned his investigators to the case in May to investigate and possibly prosecute the suspects.


Now four months later, the PCCB has finished its investigation and is currently waiting for the Director of Public Prosecutions (DPP) Eliezer Feleshi to give his consent, so that the suspects be taken to court.

Contacted on Friday, Dr Hosea said, “It’s true but I can’t give more details as the first case has already been sent to the DPP's office for approval before the suspects are taken to court.”


“We have reached advanced stages in two different cases but I am barred by the law from giving details about what’s going on,” he said, adding that, “The main point is that our financial industry stinks of corruption and fraud.”


According to sources within TTCL and the TRA, in order to detect how the deal was planned PCCB investigators accessed mobile phone text messages sent by key suspects and then targeted their accounts based on incriminating details within those messages.


“One of the areas where we got the clue was through their mobile phone communications…they used to link up regularly during their illicit operations.” A source from PCCB who declined to be named citing the sensitivity of the matter told The Guardian on Sunday.


It is believed that the paymaster at TTCL and his counterpart at the TRA had formed a money laundering system taking advantage of the loopholes within the computer system of the two agencies to steal taxpayers’ money.


After authorising tax payments to TRA, a recruited agent from the TTCL paymaster’s office informed his counterpart at the tax authority, who then intercepted the payments and distributed them to five different companies with accounts at NBC, Standard Chartered and Barclays Bank.


The money was intercepted through the computer system before it even reached the TRA’s large taxpayers’ account at the BoT, though the data at both TTCL and the TRA continued to show that the billions in tax payments had been made.


According to investigators, the fraudsters were able to log onto the system using a special code on TRA.com and then intercept the money that was being transferred from TTCL to the TRA via the TISS system —the online system introduced five years ago to facilitate payments in excess of $8,000 (Tsh10 million).


The theft was done on a monthly basis according to details obtained by The Guardian on Sunday.

“I can call it an unholy trinity that involved employees from TTCL, TRA and local banks…It was a well crafted theft, but it did not involve the BoT,” a senior official from the Central Bank told The Guardian on Sunday.




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