Law firm's alleged role in SARS saga exposed

A Scorpio report on the Daily Maverick site focuses on the role played by international law firm Hogan Lovells in helping SARS Commissioner Tom Moyane to mislead the public into thinking his second-in-command has been cleared of fraud and money laundering allegations at a disciplinary hearing. The report says Hogan Lovells failed to include crucial evidence in Jonas Makwakwa’s hearing. The omitted evidence includes a damning report by audit firm PwC analysing his tax compliance as well as ‘suspicious and unusual’ money flows through Makwakwa’s accounts. PwC’s investigation was based on an equally damning report by the Financial Intelligence Centre (FIC). The FIC ordered the probe into Makwakwa, finding that SARS’ second most powerful official has a ‘dependency on suspicious cash deposits and payments to maintain his current standard of living’. The failure to include crucial evidence in the disciplinary hearing resulted in a serious deviation from Hogan Lovell’s actual mandate, says Scorpio. The firm argues that sections 67 to 71 of the Tax Administration Act constrained the firm’s access to Makwakwa’s tax information. Scorpio says all the tax experts it consulted – including a judge, two lawyers, and an advocate – labelled Hogan Lovells' claim as ‘utter nonsense’. Hogan Lovells also admitted to not having communicated with the Hawks, nor having asked the investigating officer for as much as a preliminary report into his findings. In the end Makwakwa never had to explain why he and his girlfriend Kelly-Ann Elskie stuffed ATMs with hundreds of thousands of rands in cash, if they are tax compliant, why the money flows through his account were often more than twice his salary at SARS and why certain transactions he has been linked to look an awful lot like money laundering. Both were cleared of all charges.

Full report on the Daily Maverick site