15 January 2013

Namibia: State Freezes Electrician?s Fabulous Riches

Windhoek — The Prevention of Organised Crime Act of 2004 (POCA) scored a legal victory late in December 2012 in the Windhoek High Court when it secured a preservation order against Natangwe Kondjeni Kanime, an employee of diamond giant, Namdeb.

This was after Judge Harald Geier confirmed an earlier provisional preservation order against Kanime who takes home at least N$14 000 per month as an electrician at the diamond mine.

Kanime came into the scope of the Prosecutor-General after he deposited cash amounting to N$180 000 into a Sanlam Unit Trust account, consisting mainly of South African Rand.

The Prosecutor-General suspects illegal diamond dealing, but since she cannot prove this she instead opted to place a preservation order on Kanime's possessions on suspicion of contravening the Income Tax Act and/or the Financial Intelligence Act and/or the Casinos and Gambling Houses Act and/or POCA.

The trust in Kanime's name has accumulated a healthy balance of more than N$2 million within the space of four years, it emerged from court documents recently. In the final preservation order it is stated that during the period of March 5, 2007 to January 28, 2011 amounts totalling N$2.2 million were deposited into Kanime's Sanlam Unit Trust account in cash and predominantly made in the South African currency.

In addition, Kanime purchased also by way of cash a Fiat Uno motor vehicle for N$7 000 in January 2008, an erf in Oshakati for N$45 000 in February 2008, a Toyota valued at N$176 200 in December 2008 and a BMW 3 series for N$234 294 in June 2009. It is further stated Kanime was able to pay import tax on the Fiat Uno and BMW motor vehicles to the tune of N$39 813, also in cash as well as improving the Oshakati property - on which the buildings alone - exclusive of land value - are now valued at N$2.1 million.

All of the properties now form part of the preservation order. Judge Geier found that Kanime's inability to properly substantiate his claimed earnings does not do much to circumvent the initial suspicions that he might be involved in illicit diamond dealings. This suspicion was fuelled by factors such as that there were no other determinable sources of income besides his salary received from his employment at the Namibian Diamond Corporation and because certain significant deposits were made in South African Rand, according to Judge Geier.

He contended that since "Kanime was unable to produce any documentary evidence which substantiated his claims relating to the above set out income in any material manner it was not surprisingly submitted on behalf of the applicant that there was good reason that the respondent's bald claims and explanations, relating to the sources of his significant income, were dubious."

Judge Geier was adamant in his finding that "the blatant inability to underscore these claims and explanations with any meaningful documentary proof was not enhanced by the respondent's inability to remember any precise detail in respect of his alleged financial transactions carried out over a number of years."

According to the judge, another fatal flaw in Kanime's explanations was the reason he gave for the deposit of N$180 000 on January 28, 2011 as 'salary'.

Judge Geier said "it does not take much to fathom that these were patently false declarations as such funds could not have been derived from a gross monthly salary of N$14 681 in terms of which the total amount deposited amounted to more than 12 months' salary."

Judge Geier further found that Kanime actually generates an unlawful income from unlicensed jackpot machines of approximately N$1.3 million per year in contravention of the Casinos & Gambling Houses Act 1994 and that he has, in addition, failed to declare - and pay income tax to the Receiver of Revenue on all his self-proclaimed income - estimated to be in excess of N$5 million per year - in contravention of the Income Tax Act 1981 - which income incidentally - is by far in excess of the value of the property which has been preserved - and which income thus constitutes income derived, received or retained as the result of the unlawful activity carried out by him in contravention of the Casinos & Gambling Houses and the Income Tax Acts.

The judge further found that Kanime seemed to have committed the offence of "money laundering" since the use of the income derived from a number of bars, gambling machines and a cattle business, was unlawful income generated in contravention of the Casinos & Gambling Houses Act and the Income Tax Act by him. Judge Geier confirmed the provisional preservation order granted on March 27, 2012 and ordered Kanime to pay the Prosecutor General's costs, inclusive of the costs of one instructing and one instructed counsel.

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