VBS Fraud Case: Here’s What State’s ‘Star Witness’ Phillip Truter Admitted

Phillip Truter, former VBS official.

• Former VBS CFO Phillip Truter will serve seven years in prison after signing a plea deal with the state.
• Truter made several confessions, including how he manipulated the bank’s financial statements.
• He also admitted to submitting false statements to SARS.

Former VBS Mutual Bank CFO Phillip Truter was sentenced to an effective seven years in prison at the Palm Ridge Commercial Crimes Court, Johannesburg, on Wednesday.

Truter, who will be the state’s “star witness” in the VBS affair, has pleaded guilty to various charges, including money laundering, corruption and violation of tax laws, News24 previously reported.

He reached a plea deal with the state after admitting that he knew his actions were wrong and punishable by law.

News24 previously reported that Truter was the eighth defendant in the case, along with former VBS Chairman Tshifhiwa Matodzi, CEO Andile Ramavhunga, former VBS Treasurer Phophi Mukhodobwane, as well as former VBS non-executive board members Ernest. Nesane and Paul Magula.

Pursuant to the plea and sentencing agreement in terms of the provisions of Article 105a of the Criminal Procedure Law 51 of 1977, Truter admitted the following after being asked to plead guilty to one racketeering charge, two for fraud, one for corruption, one for money laundering, and one charge for not filing an income tax return:

He admitted that he was intentionally and illegally employed by VBS and participated in its affairs through a pattern of organized crime activities.

Truter admitted that he illegally and falsely prepared annual financial statements, provided them to VBS, its shareholders, creditors, and the Registrar, and pretended the statements were a fair presentation of the bank’s financial position as of March 31, 2017.

He admitted that upon submitting the financial statements he knew that they were false and that the assets described as “cash and cash equivalents” worth R802 427 245 were falsely inflated to the amount of R690 326 847 and that the assets described as “loans and Advances “of R1 081 831 081 were falsely inflated by an amount of R351 956 095.

In fact, the bank’s financial situation as of March 31, 2017 was that it was insolvent, with total assets amounting to R1 037194164, while the annual financial statements reflected its total assets as R2 102 039406.

The bank’s total liabilities actually amounted to R1 556 494 122, while the annual financial statements reflected its total liabilities as R1 863 460 154. Its total equity amounted to the negative amount of R519 299 958, while the annual financial statements reflected it. as R238 579 252.

The plea agreement also establishes that Truter admitted that from April 1 to July 27, illegally, falsely and with the intent to defraud, prepared and submitted to the Registrar Form DI Return, which establishes the monthly balance of the VBS bank as of 31 March 2017 in the manner required by Regulation 19 (“the DI 100 Refund”).

This gave the impression to the Registrar, VBS, its shareholders and creditors that Statement DI 100 was a faithful presentation, in all material respects, of the VBS bank’s monthly balance sheet as of March 31, 2017 in the manner required by Regulation 9.

Truter admitted that on October 5, 2017, he unlawfully and intentionally accepted, directly or indirectly, a 5 million rand bonus.

Under the agreement, the reward was from another person and would benefit him or another person to act, personally or by influencing another person to, among other things, act in a way that amounts to illegal, dishonest, unauthorized, incomplete o Biased exercises.

• Charge 5: Money laundering

He admitted that the cumulative amount of R2 million was paid to Shangri La’s account during the period from November 20, 2017 to December 15, 2017. The cumulative amount constituted or was part of the proceeds of illicit activities or the theft of money from VBS.

“Now then, the accused [Truter] is guilty of the crime of violating Section 4 read with Sections 1 and 8 of the POCA, as amended, “the agreement reads.

• Charge 6: Failure to file an income tax return

Truter also admitted that since November 1, 2018 in or near Pretoria in the Gauteng Regional Division, he unlawfully, intentionally and without just cause neglected and failed to file an income tax return for fiscal year 2018 with the Tax Service. of South Africa with respect to your own income tax matters on your income tax registration number.

According to the reason, Truter was legally obliged to file such a declaration, since he was under 65 years of age and had a gross income of more than R75 750 during the relevant period.

“The gross taxable income from employment (code 3699) of the defendant was R 1,198,760. The defendant in addition to the aforementioned amount received two bonus payments of R 1,000,000 each in this fiscal year.”

By admitting his guilt, Truter told the court that he knew his actions were wrong and punishable and that he had no legal excuse for his actions.

Therefore, the accused knew that his actions were wrong and sanctioned by law.

– Compiled by Sesona Ngqakamba

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