Student Sentenced for GST Fraud

October 23, 2010 New Zealand Taxation

200601 court roomA student has been sentenced to five months of home detention after being found guilty of using fake companies to receive GST returns of over NZD 40 000.

Bing Liu, a student in Auckland, has been sentenced to five months home detention after he admitted to 15 separate charges involving GST fraud involving NZD 44 350. He is alleged to have created 10 separate companies which were used exclusively to process fake expenses, and receive subsequent GST refunds. According to the Inland Revenue Department, the businesses’ real transactions contained only GST refunds and lump sum withdrawals by Bing Liu.

According to Jonathan Matthews, Investigations Manager of Assurance at the IRD, said that Bing Liu filed all his returns from an internet café, in a concentrated effort to hinder detection of his actions. He commented further, saying that Bing Liu “…knew very well what he was doing was wrong and now he’s paying the price.” Jonathon Mathews continued to say that the New Zealand tax system relies on honesty, and that the sentence should send a strong message to anyone else considering similar actions.

Bing Liu has also been order to pay the IRD NZD 30 000 in reparations. These have been scheduled to be made in installments over the course of his detention period.

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