CC Fined Over Scrap Copper Fraud

A CLOSE corporation that became caught up in a fraudulent scheme involving the sale of scrap copper belonging to Telecom Namibia more than a decade ago was fined N$200 000 in the Windhoek High Court yesterday.

Acting Judge Collins Parker imposed the fine on the close corporation, Dresselhaus Scrap CC, on 19 charges of fraud. A member of the close corporation, Heinz Dresselhaus, pleaded guilty to the 19 counts of fraud as a representative of the close corporation four weeks ago.

In a plea explanation provided to the court, Dresselhaus stated that he and the other member of the close corporation, Ettienne Weakley, had established that a former procurement manager of Telecom Namibia, Ivan Ganes, had from time to time under-invoiced Dresselhaus Scrap CC in respect of scrap copper that the close corporation bought from Telecom Namibia. They also established that the accounting department of Dresselhaus Scrap CC had issued cheques in those incorrect amounts to pay the parastatal, he stated.

Dresselhaus said it was further established that the accounting department of Dresselhaus Scrap had rewarded Ganes for the under-invoicing by making cheque and cash payments to him.

According to Dresselhaus the close corporation was under-invoiced in a total amount of about N$930 000, and the actual loss suffered by Telecom Namibia was close to N$450 000.

Telecom Namibia later sued Dresselhaus Scrap for more than N$9 million in a civil case, which was settled when the close corporation agreed to pay the parastatal N$2,4 million.

Dresselhaus Scrap was a successful business, but it was destroyed by the scam orchestrated by Ganes, senior counsel Willie Vermeulen, who represented Dresselhaus, informed Acting Judge Parker after Dresselhaus had pleaded guilty on behalf of the close corporation.

Dresselhaus, Weakley and a former manager at Telecom Namibia, James Camm, were standing trial before Acting Judge Parker on 30 charges until the State, represented by Chief Public Prosecutor Danie Small, decided four weeks ago to amend the indictment faced by the accused in order to charge Dresselhaus in his capacity as a representative of Dresselhaus Scrap as well.

Small accepted a plea of guilty in respect of 19 counts of fraud that Dresselhaus offered in his representative capacity after the amendment of the indictment.

That plea and its acceptance by the prosecution led to the acquittal of Dresselhaus, Weakley and Camm on all charges against them in their personal capacities.

The charges were based on allegations that Dresselhaus Scrap paid bribes and kickbacks to Camm and Ganes and defrauded Telecom Namibia to the tune of close to N$1,2 million between late 1998 and early 2001, while the close corporation had an exclusive contract to buy scrap copper from the telecommunications parastatal.

Ganes was sentenced to an effective two-year prison term and a fine of N$100 000 in June 2005, after he had pleaded guilty to 13 counts of fraud in connection with the scrap copper transactions between Telecom Namibia and Dresselhaus Scrap.

Ganes returned to the Windhoek High Court to testify as a witness for the prosecution in the trial of Dresselhaus, Weakley and Camm after he had served his sentence.

During the sentencing yesterday Acting Judge Parker described Ganes as the architect of the criminal scheme in which Dresselhaus Scrap became involved. He recounted that the discovery of the scam resulted in the financial ruin and eventual demise of Dresselhaus Scrap, which had once been one of Namibia’s leading scrap metal dealers.

On a request from defence lawyer Sarel Maritz, who has been representing Dresselhaus, Acting Judge Parker gave the close corporation time until 30 June to pay the fine of N$200 000.

Source : The Namibian