Sentences imposed on three persons over South Asia’s largest VAT scam

Three persons have been imprisoned in connection with South Asia’s largest VAT scam.

Colombo High Court Judge Kumuduni Wickremasinghe has imposed a fine of Rs. 101.05 million and a 33-month term of rigorous imprisonment on three suspects who pleaded guilty to the charges brought against them in connection with the VAT scam.

The sentence will be pronounced on three others who pleaded guilty to the charges during the course of the hearing.

The High Court Judge gave this order on 12 April. She also decreed that if the convicts were unable to pay the fines, all their properties under the Government’s trust should be confiscated. The convicts are Sinnaiya Subramanium, Mohammed Rizwin and Shahabdeen Abdullah.

Six suspects out of the 14 involved in the alleged fraud who were in remand prison for seven years were brought to the Colombo High Court and they pleaded guilty to the charges.

The Valued Added Tax (VAT) fraud committed against the Sri Lanka Inland Revenue Department is said to be the biggest fraud committed in South Asia, which caused a loss of Rs. 357 million to the Inland Revenue Department.

The 10th suspect Selliah Subramaniam, a businessman, received 13 months’ rigorous imprisonment with a Rs. 100 million fine imposed for receiving Rs. 646 million as VAT refunds from the Inland Revenue Department.

The 13th suspect Rizwin alias Abdul Kareem was sentenced to one year’s rigorous imprisonment and imposed a Rs. 1 million fine for fraudulently receiving Rs. 188 million as VAT refunds.

The 14th suspect Shabdeen Abdulla was sentenced to eight months’ rigorous imprisonment coupled with a Rs. 50,000 fine for making false documents to facilitate the fraud.

The rest of the suspects allegedly involved in the fraud are absconding. The Police have sought the assistance of Interpol to help in their arrest. The multi-billion rupee VAT fraud is said to have taken place during November 2002 to April 2004 during the Ranil Wickremesinghe Government and the suspects are reported to have committed this fraud with some political patronage from the Government.   

Between 2002 and 2004, the suspects were involved in the fraud where the VAT branch of the Inland Revenue Department allegedly made unlawful refunds to non-existent companies.

Deputy Solicitor General Buvaneka Aluvihare appeared for the prosecution.