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Acacia Mining employees pay Tanzania $650,000 in tax evasion case

* Acacia Mining employees plead guilty to tax evasion

* Court orders payment of $650,000 in compensation

* Employees released after more than 18 months in jail (Adds state prosecutor, compensation, recasts)

By Nuzulack Dausen and Helen Reid

DAR ES SALAAM, June 17 (Reuters) – Three employees of Acacia Mining, a former Barrick Gold unit, have been released from jail in Tanzania after paying 1.5 billion Tanzanian shillings ($649,632) in compensation for tax evasion, a prosecutor told Reuters on Wednesday.

Deodatus Mwanyika, Alex Lugendo, and Assa Mwaipopo had been imprisoned since October 2018 when Tanzanian authorities charged three of Acacia’s local subsidiaries with dozens of offences including money laundering and tax evasion.

The three pleaded guilty to tax evasion. All other charges were dropped, said state prosecutor Wankyo Simon, who worked on the case at Kisutu Resident Magistrates’ Court in Dar es Salaam.

Under a plea bargain deal, they paid a total of 1.5 billion Tanzanian shillings in compensation, and an additional fine of 1.5 million Tanzanian shillings each to avoid a further four months’ jail time.

“We are proud that the three have paid compensation to the government,” Simon said. “We encourage all people in the country to keep on paying tax instead of evading.”

Barrick, which bought out Acacia Mining last year, declined to comment when asked about the release, which took place on Tuesday.

In May, Barrick resumed exporting gold for the first time since a ban on shipments in 2017 and paid an initial $100 million to settle the dispute.

The disagreement between Acacia and the government escalated three years ago when the miner was accused of overstating how much gold it was exporting and operating illegally in the country. It has denied any wrongdoing.

($1 = 2,309.0000 Tanzanian shillings) (Additional reporting by Zandi Shabalala; editing by Louise Heavens and Barbara Lewis)

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