Monrovia - The Liberia Revenue Authority (LRA) has applauded the International Bank Liberia Limited (IBLL) for its timely coordinated alert that uncovered a tax revenue fraud against the Liberian Government.
The IBLL alerted the LRA that an IB Manager’s check of US$179,101.39 issued in the name of MNG Gold intended for deposit into the General Revenue Account (GRA) had surfaced for clearing from LBDI in a private account.
Investigation revealed that said check had been altered to read H. General Merchandise Account and had been deposited at the LBDI in the H. General Merchandise Account.
The MNG Comptroller also alerted the LRA Natural Resource Sector Section.
When LRA checked its system, only US$ 239.00 was reflected as withholding tax payment from MNG.
Whereas the fake receipt given to MNG, which had the same receipt, number as the one in the LRA system, carried the value of US$179,101.39 representing a difference of US$ 178.862.39, which the perpetrators attempted to rob.
The IBLL also alerted the LBDI of the potential tax revenue fraud and the LBDI flagged the account.
On December 14, 2016 an individual identified as Alvin Johnson, claiming to be the Accountant of H. General Merchandise was arrested at the LBDI 9th Street branch in Sinkor, while attempting to withdraw US$20,000 from the H. General Merchandise Account in which the US$179,101.39 was deposited.
He has since been turned over to the Police.
During preliminary investigation, the Manager for Logistics and Procurement of MNG informed the LRA that a manager’s check was obtained from the IBLL in favor of the General Revenue Account as payment of its withholding taxes for November.
The manager’s check was given to the company’s Logistics Officer/Expeditor for payment at the LRA.
The MNG Expeditor logged in at the LRA Security desk at about 9:15am on December 9, 2016. According to him, he could not process said payment as he was told that the system was down.
Due to the long system delay, the expeditor claims he gave the documents, along with the manager check, for processing to an LRA staff who he knows very well and who is assigned in the banking hall. He returned at 5pm and received a receipt from a CBL teller.
The receipt in the possession of MNG is however a fake receipt.
Thanks to the swift action of the President of IBLL, the fraud was aborted. The declared payment has now been deposited in the GRA.
Meanwhile, the LRA has suspended two of its staff pending the completion and outcome of the investigation, requested CBL to withdraw the teller and is working with the Liberia Police to identify and prosecute all the potential perpetrators, including the registered holders of H. General Merchandise account, into which the MNG tax payment had been diverted.
The LRA says this is a recurrent act in the revenue system and that the expedited introduction of electronic payment and filing systems including mobile money will help mitigate this problem.
Also, the LRA is engaging with relevant stakeholders in the redesign of the process and to prioritize and accelerate the necessary investments in the LRA to further protect the national revenues.
Additionally, the LRA is calling for a review of the account opening processes at the various banks and full adherence to the Know Your Customer (KYC) regulation issued by the Central Bank of Liberia.
The LRA also says despite strives to improve the system, there remains serious revenue leakages that must be combated and that these economic crimes must be fully prosecuted.