Tax case sentences in the courts for the end of 2019

Tax crime happens when people cheat the tax system through deliberate and dishonest behaviour with the aim of obtaining financial benefit.

While most people are honest and pay tax on all their income, those that intentionally avoid paying tax or claim money they aren’t entitled to, are robbing honest people of services they might have had.

That’s why we help people do the right thing and take action when people deliberately try to avoid paying tax.

Here are the cases that reached the point of sentencing towards the end of 2019. 

Commissioner of Inland Revenue V Michael Robert Hills

A Christchurch man who paid other creditors instead of his tax bill was sentenced to 11 months home detention and ordered to pay more than $16-thousand dollars in reparations.

Michael Robert Hills ran Mead Building and took over another business in August 2012, significantly increased staff numbers. He made a deliberate decision to take tax deductions from staff wages but not pay the money on to Inland Revenue.

As a result, there is a total of unaccounted core tax deductions for the company of $595,312.77. Mead Building Limited also owes $16,833.40 for unpaid KiwiSaver Employer Contributions, money that the Company’s employees have also missed out on.

Hills was charged with one representative charge of aiding and abetting Mead Building to make the deductions ‘for a purpose other than payment to’ IR. The company is now in liquidation.

Commissioner of Inland Revenue V Boonrouen Thongskul, Sirirat Kampeng, Anchalee Minwong, Chanaratt Thongskul and Anuchit Tongskul

Five members of one family were sentenced to prison and home detention or ordered to pay reparations after a $2.3 million tax evasion case brought by Inland Revenue.

They’ve been ordered to pay more than $2.2 million in reparations by the High Court in Wellington. 

Commissioner of Inland Revenue V Lance Patrick McAuley

A lawyer who ignored repeated warnings from his tax agent and Inland Revenue was sentenced to 7 months home detention and 300 hours community work in October, on tax evasion charges.

Lance Patrick McAuley was also ordered to pay $10,000 in reparation. He was responsible for deducting PAYE and other tax payments for staff in two transport companies. The money should have been paid to Inland Revenue.

Throughout the offending, McAuley received income of $367,935 from the two companies, as well as paying himself salary/wages directly from one, earning a total of $521,109.00. As a result of McAuley’s actions the outstanding tax debt is $563,048.76.

Both companies placed into liquidation at the Commissioner’s petition with the liquidators’ final report concluding that McAuley was ‘trading recklessly’.

Commissioner of Inland Revenue V Lindsay and Roger Scott

Two Hamilton brothers were sent to prison for significant tax and charities fraud.

In the Hamilton District Court this week, Judge Kevin Phillips sentenced 61-year-old truck driver Lindsay Scott to 3 years 6 months in prison. His older brother Roger, a 64-year-old lab technician, was sentenced to 2 years and 6 months imprisonment.

Commissioner of Inland Revenue V Vanessa Joy Harris

An Auckland woman was sentenced to 6 months community detention and 60 hours community work for not paying staff PAYE deductions to Inland Revenue.

Vanessa Joy Harris faced 56 charges of aiding and abetting two residential building companies – Harris Built and Harris Holdings.  She was also ordered to pay $80,000 in reparations. Her husband was the sole director of both companies.

Deductions made from employee’s gross wages but not paid to IR when they were due. The total offending in both companies amounts to $357,332.45.

Harris was responsible for the day to day management, staff, finances and tax obligations of both Harris Built and Harris Holdings.

Commissioner of Inland Revenue V Ian David Wilson

A company director who ran three horticultural contracting businesses was sentenced to 6 months home detention for aiding and abetting his businesses failure to file PAYE returns.

Ian David Wilson faced 29 charges covering an almost two-year period.

During that time, Inland Revenue had various conversations with Wilson and with the employees and accountant of the companies he ran about the failure to file returns and/or pay tax as required.

Hills admitted her made the financial decisions for the company and decided when PAYE would be paid.  All three companies are now in liquidation.

Commissioner of Inland Revenue V Michelle Augustine

A dispute over child support payments saw a woman sentenced to five months home detention and ordered to pay $5,000 in reparations.

Michelle Augustine did the books for her partner’s company Absolutely Hammered Ltd (AHL) and her son Jason worked for the company.

He was made a liable parent after a birth certificate named him as the father of a child. Child support deductions were to come from his wages, but his mother refused to make the deductions.

Augustine told IR investigators that her son was not the child’s father, that she was aware of the consequences of not deducting child support and that she was not going to make the deductions.

She was also advised of how to dispute her son’s child support liability. Between 31 July 2014 and 31 January 2017, AHL failed to deduct child support payments of $20,463.81.

Commissioner of Inland Revenue V Peter Martin Coleman

An Auckland man, who a judge says used Inland Revenue as a bank to prop up failing businesses, was sent to prison for nearly five years.

Peter Martin Coleman was sentenced yesterday in the Auckland District Court to 4 years and 9 months in prison on a raft of tax charges under the Crimes Act and the Tax Administration Act. His actions resulted in an actual loss to Inland Revenue of $1,071,837.49.

Commissioner of Inland Revenue V Mara Sorm

A Waikato baker was sent to prison for nearly five years for persistent and premeditated multi-million-dollar tax evasion over six years.

Mara Sorm was found guilty by a Hamilton jury on 52 charges of tax evasion relating to himself, his wife, and their company after failing to declare some $6,500,000.00 in cash sales. He was sentenced today in the Tauranga District court to 4 years, 9 months in prison and ordered to pay $500,000 in reparations. 

Commissioner of Inland Revenue V Robert William Lee Grant

An Auckland company director was sentenced to 12 months home detention on tax evasion charges.

Robert William Lee Grant faced 71 charges covering not filing a return with the intent to evade GST, evasion of GST and knowingly not deducting PAYE with the intent to evade tax.

Grant was responsible for the finances and administration of the companies. His tax agent encouraged Grant to file returns which were overdue, to pay outstanding tax, and warned him that penalties (including prosecution) might follow.

The total amount of tax shortfall owing is $502,573.56

Commissioner of Inland Revenue V Umesh Patel 

An Auckland company director was sentenced to 3 months community detention plus 125 hours community work on tax evasion charges.

Umesh Patel ran Vista Infotech NZ Limited and between 2012 and 2015 failed to pay PAYE returns, paid net wages, and deducted employees PAYE totalling $102,807.86 to Inland Revenue.

The Defendant was aware that PAYE was outstanding and understood that it was an amount held in trust for Inland Revenue.

In an interview he told IR investigators he knew PAYE would not be paid when it was due and that he preferred to pay other creditors over Inland Revenue to keep the business going.

Commissioner of Inland Revenue V Clifford Desmond Meikle

The owner of a transport company was sentenced to 10 months home detention for failing to file PAYE, GST and income tax returns.

Clifford Desmond Meikle ran Meikle Transport and Meikle Transport Holdings which changed their names to CDM and JML respectively and both went into liquidation in 2013.

Meikle has also sentenced to 10 months post detention conditions which includes attending counselling for grief and mental health issues.

The amount owing is between $466,451.45 and $627,221.31

Commissioner of Inland Revenue V Jignesh Prakashkumar Purohit

A former Auckland auto mechanic was sentenced to 12 months home detention on money laundering and tax fraud charges.

Jignesh Prakashkumar Purohit also had six months post home detention conditions imposed on him.  He has repaid more than $70,000 of the money he obtained fraudulently.

In February 2016 another man in NZ on a student visa opened a company but was then deported.  The company never traded but Purohit still filed GST returns for it. Between May 2016 and 12 April Purohit systematically withdrew around $87,000 in cash from ATMs around the Auckland and Sydney areas.

He recruited at least three other Indian students to incorporate companies, open bank accounts and rent PO Boxes. Purohit and his wife moved to Australia in early 2018 but he travelled almost monthly back to New Zealand to check PO Boxes and withdraw money.

Commissioner of Inland Revenue V Kamlesh Jattan

An Auckland man, whose company sold EFTPOS terminals and barcode scanners, was sentenced to four months community detention and 100 hours community work on tax evasion and tax fraud charges.

Kamlesh Jattan, through a tax agent, filed 18 GST returns between 2011 and 2014 as well as three income tax returns. He was audited in 2016 and asked to provide a copy of bank accounts for his company.

Bank accounts obtained directly from the bank by IR showed Jattan had left out 88 transactions and recalculated the opening and closing balances.

The total tax shortfall was $164,938.92.

From the IRD News website | © Copyright 2020 Inland Revenue.