SCORPIO
R3bn in smuggled cigarette money, Test One: Sasfin’s IT guru deletes first transaction from its banking system
Simon Rudland set up the negotiations and protocol of a vast money laundering network which used five Sasfin banking officials to sneak at least R3bn in smuggled cigarette money out of the country, Sars investigators found. In this second article detailing the Rudland transnational plunder network, Scorpio focuses on the very first instructions Rudland and his money launderer allegedly issued over three days in September 2016 to test the Sasfin waters. All the while duping Sars and the Reserve Bank.
The South African Revenue Service (Sars) seems convinced that buccaneer capitalist Simon Rudland is pulling the strings of a transnational plunder network he established around cigarette manufacturer Gold Leaf Tobacco Corporation (GLTC) in 2016.
Rudland “initiated and established protocols” for sneaking billions of rands in illicit cigarette money out of the country, Sars argued in a successful preservation application to the Pretoria High Court last week Wednesday.
Sars said Rudland was “directly involved in issuing instructions on behalf of GLTC”, directing the amounts of money to be sneaked through commercial bank Sasfin’s system to foreign jurisdictions like Dubai, Switzerland and Mauritius.
He “took steps to circumvent the detection of these deposits and payments” from the Reserve Bank (Sarb) and Sars.
Rudland also negotiated fees with the network’s money launderer and worked in concert with his confidantes to dupe the authorities, investigators argued.
And once the plunder scheme seemed to be running on oiled wheels, Rudland handed over the reins but was — significantly — kept up to speed.
Based on the high court order, Sars has since Friday taken control of the bank accounts and all other local assets owned by GLTC, Rudland and his co-director Ebrahim Adamjee. Adamjee, “knew or ought to have known” about the Sasfin shenanigans, investigators said.
In a shocking letter dated 31 March 2022 and attached to Sars’ papers, Sasfin’s COO Rodger Dunn admitted to investigators that the bank’s probe “evidences deletion of transactions” and, as at that date, Sasfin struggled to salvage all of the information requested by Sars.
When Scorpio phoned Dunn on Friday, he was all about “protocol” and referred questions to CEO Michael Sassoon.
Sassoon said, “…I think we have given everything to Sars that was needed… obviously we are very disappointed of employees acting in this way.”
Sassoon was at pains to say that Sasfin is “100% cooperating” with Sars, gave investigators all subpoenaed documentation and asked their bank’s officials to act as witnesses. [Sars will return to Sasfin, its employees and the deletion of banking transactions in the third story in this series.]
In turn, Rudland and Adamjee denied all wrongdoing during a tax inquiry registered in terms of s50(1) of the Tax Administration Act. They pointed the finger at the plunder network’s money launderer Mohammed Khan, arguing he “hijacked” GLTC’s accounts. Their tax affairs are in order and any other dodginess happening in their accounts had nothing to do with them, they told investigators.
Sars remained unmoved.
Investigators told the court the revenue service is in the process of clawing back R1-billion in undeclared income tax and VAT from GLTC for tax years 2017 and 2018 and VAT period of September 2016 to July 2017 respectively.
GLTC’s assets are not enough to pay this tax debt, and therefore Rudland and Adamjee as the directors will have to foot the bill.
Understatement penalties and interest can rack up GLTC’s tax bill to R3-billion.
In arguing their case, contradicting especially Rudland’s assertions of innocence, investigators red-flagged the first transaction in which Rudland and Khan allegedly tested their Sasfin scheme.
A key cog in the Rudland laundering wheel: Sasfin’s Lulama Kene
When Lulama Kene deleted the first GLTC transactions from the Sasfin banking system, he was a 32-year-old Temenos Transact banking software guru. This, in tech-speak, is a T24 applications specialist.
Kene had access to the master key, if you will, to Sasfin’s banking system. He now works for Access Bank, a Nigerian-based commercial bank.
Kene has an elaborate tattoo on his right forearm that involves a compass and a world map. This is a new addition though, seemingly after he left Sasfin.
Self-styling as an influencer of sorts, Kene is fond of posing in front of cars. Sometimes in clothing embroidered with his initials designed as a logo, which he is even more fond of using.
Kene did not respond to three telephonic attempts to contact him, nor to a series of WhatsApp messages requesting an interview.
(This article will be updated if and when Kene changes his mind.)
Lulama Kene, who deleted the first GLTC transactions from the Sasfin banking system, was then a 32-year-old Temenos Transact banking software guru. (Photo: Supplied)
Lulama Kene is fond of posing in front of cars. Sometimes in clothing embroidered with his initials designed as a logo, which he is even more fond of using. (Photo: Supplied)
Lulama Kene has an elaborate tattoo on his right forearm that involves a compass and a world map. This is a new addition though, seemingly after he left Sasfin. (Photo: Supplied)
According to Sars, the colourful Kene was an important cog in the plunder network. Investigators base this on reams of WhatsApp conversations between Kene, Khan, Rudland and Howard Baker, a close business partner of Rudland.
Sars further submitted Sasfin’s attempt at reconstructing the GLTC bank statements, as well as accurate bank statements from other commercial banks.
Sars further leaned on information gathered from search and seizure procedures, including of Khan’s series of companies, GLTC’s auditors Alan Leviton and cash-in-transit company AMFS and Rens in Konant.
2016: A big year for the GLTC/Sasfin
The Sasfin strand of the Rudland plunder network ended abruptly by the end of 2017 — after more than R3-billion was sneaked out of the country — when a Sasfin employee highlighted 10 dodgy GLTC payments. [Scorpio will return to Sasfin and its banking officials in the third story of this series.]
The bank subsequently ended its relationship with GLTC.
All of the machinations described here must be understood against the background of this being only one way in which the illicit cigarette cash was laundered and moved out of the country, Sars investigators said.
Based on evidence they did not offer to the court, investigators claimed they now suspect more incidents of tax evasion and therefore reopened additional tax years to scrutiny.
Investigators said they had “reason to believe that GLTC, assisted by Mr Adamjee and Mr Rudland, is still involved in illicit money laundering and continues to dissipate its assets”.
Network in place, ready to be tested
On 2 March 2016 Rudland and his co-director in GLTC Ebrahim Adamjee signed a contract with money launderer Khan on behalf of their companies GLTC and East London Cut Rag Processors. The contract appoints Khan’s SALT Asset Management as the financing intermediary with Sasfin commercial bank.
(At the time, the GLTC Sasfin accounts already existed, but Scorpio has no information that suggests the network moved money out of the country through this channel before 2016.)
The SALT contract ironically forbids funny business around exchange control legislation and “indemnifies” Sasfin against any drama the alliance may spawn.
Ironic, because exactly the opposite happened.
In September that year, the plunder network was in place, ready to be tested.
Four days in September 2016:
6 September 2016
Rudland negotiated commission fees with Khan and settled on paying 3% for every R1-million sneaked out of the country on 6 September 2016.
R3-billion: Sars swoops on Gold Leaf Tobacco over transnational plunder network
7 September 2016
The next morning, at 9:15, Rudland WhatsApped an FNB “Notification of Payment” document to Khan.
The document shows that at 8:37 that morning, AMFS paid R2,989,979 to Sasfin’s suspense account at Absa.
“In accordance with the instruction,” Sars investigators said “the funds were remitted to the foreign jurisdiction designated by mr. Rudland. Sars analysed and traced the flow of funds and determined that the funds in the amount of R2 989 979.00 originated from the bank account of AMFS.”
The payment instructions to AMFS to send money to Sasfin’s Absa suspense account were “communicated to AMFS by Mr. Baker”.
Investigators say that Baker typically gave payment instructions to AMFS.
“All indications are that mr. Rudland and mr. Baker worked in unison…” to sneak money out of the country, investigators say.
When Khan received Rudland’s message, he asked “is there more coming?”
Rudland answered: “Today is the first, should get the next one in tomorrow.”
Khan, in the meantime, had Kene on standby at 4:55 on the morning of 7 September 2016.
By 15:44 Kene hadn’t heard from Khan and inquired: “Hello Bud. Did you go ahead with the Deal?”
Khan replied seconds later, saying: “It will go through tomorrow. I will give you the names tomorrow.
“We have to delete.”
Kene had a paycheck waiting, and agreed: “Cool bud.”
8 September 2016
At 8:29 on 8 September 2016, Rudland sent a message: “Morning Mo. Funds through yet?”
“Morning S,” Khan replied. “Will know by 9am. Should be there.”
At 9:22, Khan sent Rudland three pictures and said: “Done !!!”.
As an afterthought he included: “Let me know if Switzerland receives.”
“Only tomorrow,” Rudland said, “as its a holiday there” (sic).
That afternoon, at 14:47 on 8 September, Kene WhatsApped Khan again. “Hello Bud, Done.”
When Sars checked years later, there was no sign of this payment on the Sasfin system.
It had been deleted.
Worse, to disguise the illicit transactions and avoid scrutiny from Sarb, the Sasfin employees removed any trace of the foreign payments from the Balance of Payment Customer (BoPCUS) reports.
These reports are generated daily and sent to Sarb.
Swift documentation Sars retrieved is, however, revealing.
It shows that by 8:53 on 8 September an instruction was sent for R2,989,979 to be moved from “FTGOLDLEAF” to the Swiss bank account of “VELMONT VALLEY SA” in Geneva.
This payment was made possible by a “fabricated invoice” for unmanufactured Zimbabwe flue cured tobacco, investigators said.
The invoice had Swiss company Ultoco SA’s logo at the top, but listed Velmont Valley SA’s banking details in Geneva.
“All the indications are that the alleged importation of tobacco products by GLTC reflected on the invoice did not take place,” investigators told the court.
(Swift is a messaging network financial institutions use to securely send messages between the “sender” bank and company account number and the “receiver” bank and company account number.)
9 September 2016
A day later, after another series of payments were sent to a foreign jurisdiction and all digital traces of it got “pulled” and “removed”, Khan was happy with their progress.
“U will get something for this. Much appreciated” (sic), Khan sent to Kene.
“Looking forward to it bud,” Kene replied.
Rudland ‘steps back’
After this string of money was successfully sneaked to Dubai and Switzerland without Sarb and Sars knowing, Rudland requested Khan “to liaise directly with mr. Baker concerning all future correspondences and remittances of funds to foreign jurisdictions. From time-to-time, mr. Rudland would require updates from mr Mohammed Khan concerning the illicit operations,” Sars said.
Sars’ court papers confirm that Kene “and other Sasfin officials were used to facilitate illegal activities by manipulating bank statements. In return for their services, the Sasfin employees were paid various amounts in cash, typically paid to them monthly by mr Mohammed Khan” or one of his associates “(on behalf of or to the benefit of GLTC) for their assistance”. DM
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Does Mohamed Khan actually exist or is he a fictitious person with legitimate credentials used to set up the Swiss account? He seems to be the “director of operations” and could be the fall guy – if he is infact a real person! R90m ( 3% of R3b) is a great return….even better if it’s to a fictitious person…just means that someone in this bunch is earning themselves a bonus possibly without the others knowing! Who says there is honour amongst thieves!
Sickening. Have they been arrested? Or are they also going to fly the coop and retire in Dubai with their dodgy stolen money?