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Jul 27, 2016

Two in Dar court over 14bn/- fraud

TWO prominent businessmen, Samwel Shanshasen Lema, and Mohamed Mustafa Yusufali, appeared before the Kisutu Resident Magistrate’s Court in Dar es Salaam yesterday charged with 223 counts of conspiracy, forgery, money laundering, evading tax and occasioning loss of over 14bn/-.They were not allowed to enter any plea to the charges before Principal Resident Magistrate Wilbard Mashauri because they have been charged under the Economic and Organised Crime Control Act, which falls under the jurisdiction of the High Court.
The two were committed to remand custody until July 28, when the prosecution will respond to the request by the defence team, led by advocates Alex Mgongolwa, Hudson Ndusyepo and Nehemia Nkonko, who are challenging the validity of the charge of money laundering.
In the case, both accused persons are facing one count of conspiracy to defraud, 181 counts of forging tax invoices for two different companies, one count of money laundering and one charge relating to occasioning of loss to a specified authority.
Lema, an Arusha based tycoon, separately faces 38 counts of forging value added tax (VAT) returns and one count of tax evasion. This case is the second for Yusufali, popularly known as ‘Mzee wa Milioni 7 kwa Dakika’, to face before the same court.
The first case involves tax evasion to the tune of 15bn/-. During the court session, the prosecution team comprised Senior State Attorney Mutalemwa Kishenyi and State Attorneys Jacqueline Nyantori and Diana Rukondo and a prosecutor from the Prevention and Combating of Corruption Bureau (PCCB) Leonard Swai.
The prosecution told the court that the accused persons and other persons not in court conspired to defraud the Tanzania Revenue Authority (TRA) of 14,052,011,435.69 between January 1, 2012 and December 3, 2014 within the cities of Arusha and Dar es Salaam.
It is alleged that on diverse dates in Dar es Salaam, the two accused persons made false tax invoices bearing different numbers and dates, purporting to show that Northern Engineering and Elerai Construction Co. Limited purchased commodities from various companies worth billions of shillings.
The prosecution alleged further that on different dates in the city, with intent to defraud, Lema made several VAT returns for different months, purportedly showing that Northern Engineering Works Limited during such months purchased commodities worth billions of shillings, while it was false. Lema is also charged with evading tax amounting to 14,052,011,435.69 between January 1, 2012 and December 31, 2015 -- in Dar es Salaam.
Being director responsible for management affairs of his companies, Northern Engineering Works Limited and Elerai Construction Co. Limited, which are registered VAT payers, with a view to fraudulently evade tax, he allegedly submitted to the Commissioner of TRA false returns.
All the accused persons were charged with an offence of money laundering allegedly committed between February 1, 2012 and February 25, 2013 within the cities of Arusha and Dar es Salaam.
They are alleged to have directly engaged themselves in a transaction of 420m/-, which, according to the prosecution, was proceed of predicate offences by depositing the amount in a bank account by the name Igba Jeferali Jafferjee at I and M Bank (T) Limited and subsequently withdrawing the same in cash.
The prosecution told the court that at the time of depositing and withdrawing of the money, the accused persons knew or ought to have known that the said sum was proceeds of predicate offences, which are forgery and tax evasion.
It is alleged further that between January 1, 2012 and December 31, 2015, in the city, by reason of their wilful acts, Lema and Yusufali submitted to the Commissioner General of TRA false value added tax returns, hence the government to suffer a pecuniary loss of 14,052,011,435.69.
Immediately after the prosecution had read over the charges to the accused persons, Advocate Mgongolwa, on behalf of the defence team, rose up and requested the court to strike out the money laundering charge “because it was incurably defective’’.
“The defect goes straight to the particulars of the offence. Those particulars of the offence are fatal and cannot be cured under the law. Money laundering offence must contain four elements like Illicit source Placement, layering and integration,” Mr Mgongolwa argued.
Under the Anti-Money Laundering Act, money laundering is defined as engagement of person(s), direct or indirectly in conversion, transfer, concealment, disguising, use or acquisition of money or property known to be of illicit origin and in which such engagement intends to avoid legal consequence.
From such definition, he submitted, one could rightly say that for there to be an offence of money laundering, there must be intention on the part of the accused person to avoid the legal consequences of such action -- hence, the intention forms a basic element in particulars of the offence.
According to the advocates, looking at the count, the particulars of the offence were insufficient to meet test required under section 3 which defines the offence of money laundering and constituent acts provided for under section 12 (a) (b) (c) and (d) of the Anti-Money Laundering Act.

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