THE LAUNDRY, Part Two: The front, the accountant and the lawyer

13 Dec 2022

South Africa has emerged as a hub for alleged regional money laundering operations of staggering proportions. Armies of fly-by-night front companies obscure the networks, but missteps seem to have exposed some key Johannesburg ‘service providers’, including one prominent attorney known for his colourful client list.

In April 2019, a mysterious shelf company called Actinic Holdings sprang to life. In barely a week it opened several accounts at different local banks including Sasfin, Bidvest, Habib Overseas Bank and Mercantile Bank.

These accounts immediately started receiving multimillion-rand deposits and then rapidly expatriating the money abroad, in large part to a Dubai-based company that amaBhungane has already implicated in alleged large-scale money laundering: Aulion Global Trading.

What we have uncovered thus far appears to be the tip of vast and sophisticated money laundering networks operating in South Africa, acting like a banking sector for the criminal underworld, often using short-lived front companies like those we exposed in Part One of this series.

The fronts hold bank accounts through which cash, whether illicit or not, is made to disappear offshore, often disguised as legitimate payments for non-existent imports.

With one such corporate chimera, Actinic, errors were seemingly made which have exposed two key local facilitators serving at least one syndicate’s operations.

The first is Johannesburg attorney Saleem Ebrahim whose colourful client list has in the past included alleged diamond smugglers, fraudsters, a hitman and even the late disgraced soccer star Marc Batchelor.

We can show that his firm Saleem Ebrahim Attorneys not only helped set up Actinic but also separately moved hundreds of millions of rands for other alleged money laundering schemes we identified in Part One.

The other apparent foot soldier in the Actinic laundering campaign is chartered accountant Zakkiyya Gutta, a tax expert whose clients include Rappa Resources, the major cog in a vast alleged VAT scam involving gold exports previously reported on here.

Ebrahim and Gutta seemingly provided the invaluable job of setting up front companies and bank accounts that were used to move money offshore for bigger fish.

The common denominator: Aulion in Dubai, the recipient of millions from Actinic and other fronts exposed in Part One.

As we showed then, it belongs to two luminaries in the local money-moving business: Howard Baker, right-hand man to tobacco baron Simon Rudland, and Andries Greyvensteyn, a convicted gold smuggler who has played a pivotal role in the local illicit gold industry for years.

The service providers: Ebrahim and Gutta

Ebrahim has legally represented AMFS Solutions, a notorious “cash-in-transit” company linked to Greyvensteyn and his extensive gold interests.

In a court case unrelated to this story, the SA Revenue Service (SARS) has said that AMFS and related cash movement companies “for all practical purposes act as unregistered and unauthorised banks” for the laundering industry.

When a massive fraud led to the collapse of the Namibian SME Bank in 2017, it was discovered that a significant portion of the loot had made its way to AMFS. AMFS had then acted on the instruction of Baker to send money to a Namibian company which in turn sent the money to Aulion, using a fake invoice for mining equipment.

Subsequently, AMFS had its bank accounts frozen by the SME Bank’s liquidators.

The lawyer they turned to in order to get their money unblocked: Saleem Ebrahim.

As for Gutta, the accountant has also made notable appearances in the employ of Rappa Resources when the gold refiner was locked in a battle with SARS in relation to a colossal multibillion-rand alleged tax fraud.

As amaBhungane has revealed, Baker/Rudland are likely the hidden hands behind Gutta’s big-fish employer and Rappa has even described Aulion as “part of the Rappa Management group of companies”, in documents previously submitted to the Competition Tribunal.

Ebrahim has elected not to answer questions, while Gutta claims she is legally unable to say anything on account of being involved in unspecified “in-camera proceedings” which are probably related to investigations by SARS or the Reserve Bank.

She did, by way of her lawyers, say that we have “grossly misunderstood” her role in supplying “professional services”.

What our investigation shows is that the duo’s legitimate (albeit ethically questionable) legal and accounting work for companies like Rappa and AMFS accompanies other, more clandestine, work done in the shadows for the same masters.

Exhibit A is Actinic.

Moving money fast

Like previous fronts used by the syndicate and exposed in Part One of this series, Actinic sent money abroad under the cover of so-called “ghost imports” — large forex transactions justified by apparently forged invoices from companies like Aulion.

Actinic was seemingly a continuation of this strategy, where a local syndicate used different front company accounts at Habib to funnel more than R1-billion offshore throughout 2018 and early 2019 — also largely to Aulion.

amaBhungane has procured full and partial account statements for Actinic at different banks showing a brief but spectacular effort to move money abroad in record time between April and May 2019.

Actinic appeared on the scene immediately after the fronts we exposed in Part One, PKSA Finance and Ovenbird Trading, were shut down.

As one banking source explained, this is the modus operandi in this line of work: a new company is set up to move money for two to three months, shut down and quickly replaced with a new, untainted vehicle. Each entity has to be understood as a piece of a much larger operation.

Actinic’s Habib account went live on 4 April 2019. At Sasfin, Actinic was up and running on 14 April and at Bidvest a welcome letter was sent to it dated 16 April. At Mercantile, its account went live near the end of April.

Upon opening its account at Sasfin, Actinic immediately received R23-million from unknown sources and paid most of it to Aulion over the course of two days. It continued to operate its account at Sasfin for six weeks for which we do not have statements, but (using a simple extrapolation from the data we have) potentially expatriated as much as R200-million at the bank.

At Bidvest, the company received and paid out R82-million over this period. At Habib, Actinic quickly received more than R28-million and paid out most of that offshore, in part to Aulion as well.

At Mercantile, the company was apparently caught out much faster after funnelling less than R4-million to Baker’s Aulion.

It is not clear whether Actinic had accounts at more banks that moved yet more money in this rapid multipronged campaign. It did, however, have at least two additional accounts at Sasfin, identified in a forfeiture notice gazetted by the Reserve Bank in May.

But who was Actinic? A significant effort was seemingly made to disguise who sat behind the prolific company, but from the start there was an obvious red flag that might actually be a red herring.

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The front and the frontwomen

Anyone who took a cursory look at company records would see that Actinic’s sole director is the now-deceased Mohammad Sohail Jiwani.

That would seem to make sense. He was one of the two directors of PKSA, one of the companies implicated in money laundering in Part One.

He was also a director of SALT Asset Management, a company that acted as an intermediary for Rudland’s Gold Leaf Tobacco Corporation in its dodgy dealings with Sasfin, also detailed in Part One.

But something is not quite right. Jiwani was only made a director of Actinic on 17 July 2019, after Actinic had already been discovered and its accounts blocked at essentially all banks.

This seems like a curious misstep for Jiwani, an otherwise experienced operator in the money laundering business. An educated guess is that his appointment was made without his knowledge to muddy the waters.

In fact, Actinic had a puzzling revolving door of directors. First, there was Babitha Sewram who was appointed as a director of Actinic on 25 March, right before the company awoke from its slumber and infiltrated several banks at once. Her stint was, however, curiously short-lived and she resigned less than two weeks later on 5 April.

Then there was Vernaline Urquhart, who replaced Sewram on 5 April, the day after Actinic’s Habib account went active. Both women avoided amaBhungane’s calls and messages.

Instead, the evidence suggests that Gutta was an important person operating behind the purported directors of the company. amaBhungane has established that Actinic’s first director — Sewram — was an employee of Discount Cash & Carry, a wholesaler based in the Johannesburg commercial area of Woodmead.

It turns out that the business is owned by Gutta’s parents.

Another clue is a welcoming letter Bidvest sent Actinic upon the opening of its account. It was directed at an address with no obvious link to the company. The address in the Johannesburg light industrial suburb of Selby is, however, the registered address of several Gutta family companies including ones where Zakkiyya Gutta is a director.

Later, when Jiwani was mysteriously appointed way after the proverbial party was over, the paperwork to affect the change came from a provider called Salman Amla.

Amla told amaBhungane that his instructions came from one Muhammed Gutta, who is the little brother of Zakkiyya. Even more damning than this paper trail is a video Gutta herself made showing the “sent” folder of her email account on 11 May 2019.

The video was intended to prove to the recipient that she had sent an email to Faizul Shah, the manager of Habib Overseas Bank’s Fordsburg branch. This email’s subject line read “Payments for Actinic to Alunion [sic]”.

The same video shows that Gutta had sent emails in the preceding two days to an employee of Sasfin as well as an employee of Bidvest in relation to Actinic. Another recipient was the Actinic director Urquhart.

Gutta, in other words, sent and received banking correspondence for Actinic while the company channelled millions to Aulion, the offshore nexus of illicit money flows controlled by Gutta’s employer at Rappa, Howard Baker.

If she is currently being questioned under a SARS gagging order, that might explain why.

The lawyer

Also lurking in the background was Saleem Ebrahim, the controversial Johannesburg lawyer. He is linked to Actinic through Vernaline Urquhart, the second apparent dummy director who saw the company through its money laundering spree.

Documents filed at the Companies and Intellectual Property Commission (CIPC) show that when Actinic’s initial director, Sewram, was jettisoned in favour of Urquhart, the paperwork was done by KickStart Solutions, a small operation providing company registration and related services.

We approached KickStart to inquire who hired it.

“The client that instructed me to attend to the director changes in April, was Saleem Ebrahim Attorneys,” KickStart’s owner, Safura Araf, told amaBhungane. Ebrahim has personal links to Urquhart as well.

Vernaline is the mother of Micheline Urquhart. Micheline is in turn a former employee, and apparent romantic partner, of Saleem Ebrahim.

When we sent Ebrahim questions, including a reference to this relationship, it was Micheline Urquhart who replied instead of the attorney, effectively confirming the connection between them.

But Ebrahim is far more deeply implicated in the money laundering allegations surrounding Baker/Rudland than just via Actinic.

Bank statements for his firm, Saleem Ebrahim Attorneys, show how he moved millions of rands at Habib bank for entities we have identified as conduits for allegedly illicit payments abroad. The records also suggest Ebrahim handled millions for Howard Baker, seemingly in his personal capacity.

One apparent money laundering channel we previously identified was payments between the corrupt local arm of a German multinational seller of construction equipment called Putzmeister — and an offshore front owned by Baker.

In Part One we showed how local Putzmeister executives, without the knowledge of their parent company, set up an innovative mechanism for expatriating funds.

A bogus acknowledgement of debt was submitted to the Johannesburg High Court and made a legitimate court order. This was then used at banks to justify forex payments.

The offshore “creditor” receiving payments from Putzmeister was Prodigy Trading, a company registered by Baker in Hong Kong. This single court document would facilitate forex transactions of up to R67-million at each bank that accepted it.

Some of the subsequent payments were processed through Ebrahim’s firm’s bank accounts at Habib. First, two deposits of R32-million and R19-million, respectively, were made into one Saleem Ebrahim Attorneys current account by one of the well-known cash-in-transit companies operating in the orbit of the laundering syndicate — Rens Kontant In Transito.

This money would then be transferred between Saleem Ebrahim Attorneys accounts held at Habib before being paid out to Prodigy Trading.

If this was not enough, Ebrahim also maintained a trust account at Habib for Baker directly.

Account statements show that R45-million appeared and disappeared from the Baker account in February 2019.

Crumbs

As mentioned above, Ebrahim has elected to not respond to questions or follow-up prompts.

In response to questions, Baker told us via his lawyer: “I have no comment to make at this stage, save to point out that many aspects contained in your questions are false. To the extent required I have always been willing to and am continuing to cooperate with authorities.”

It appears that authorities are, mostly behind closed doors, following the breadcrumbs.

In May, the SA Reserve Bank seized Actinic’s remaining bank accounts. In the forfeiture notice, the Habib account is cited as having a balance of R17-million, while two other accounts at Sasfin contained trivial amounts.

In June, Ebrahim also had some of his bank accounts seized by the SA Reserve Bank — three at FirstRand and one at Habib — with balances totalling a collective R11-million.

These do not include the accounts held by his firm for which amaBhungane has damning statements.

SARS earlier this year got a preservation order against Rudland, his partner Ebrahim Adamjee and their cigarette business.

amaBhungane’s investigations have thus far uncovered fronts used for apparent money laundering including Actinic, Putzmeister, PKSA, Ovenbird as well as Rudland and Adamjee’s Gold Leaf Tobacco Corporation. We have revealed even more offshore entities on the receiving end of illicit funds from South Africa.

Yet our investigations suggest we are only scratching the surface of the creeping infrastructure of organised financial crime that is the indispensable accomplice to grand theft, graft and fraud.

Watch this space. DM

amaBhungane is a non-profit centre for investigative journalism. We co-publish our investigations, which are free to access, to news sites like Daily Maverick. For more, visit us on www.amaB.org.

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Business Maverick

The service providers: Ebrahim and Gutta

Moving money fast

The front and the frontwomen

The lawyer

Crumbs