Year in Prison for Tauranga Tax Fraud
January 25, 2012 New Zealand Taxation
A Tauranga man has been sentenced to a year in jail for neglecting his business’ tax obligations, and using employee tax payments to fund his own expenses and recreation.
Last week the Tauranga District Court sentenced an Adrian Ace, an agricultural contractor, to twelve months in prison for evading his PAYE and GST tax obligations. Adrian plead guilty to 28 charges of failing to properly account for PAYE for the employees at his company Pride Contracting Limited. He had also pleaded guilty to three charges of evading GST. Cumulatively, the company owed approximately NZD 55 000 to the Inland Revenue Department.
According to the IRD’s investigations manager Jonathan Matthews, Adrian Ace was first contacted by the IRD regarding his company in August 2005, when a repayment plan was established to help him pay back over NZD 21 000 in due taxes. Only six payments were made, and soon after the defendant stopped filing GST returns. Between July 2006 and December 2007 the company also ceased to make PAYE payments.
During an interview with the IRD, Adrian Ace admitted that he had used his employees’ PAYE payments to cover his own personal expenses, including rent and petrol. He added that when his company was still operational he routinely used the company bank account to pay for his own recreational activities.
Jonathan Matthews explained that Adrian Ace claimed not to understand his full tax obligations, regarding his employees’ PAYE payments, and had disregarded the IRD’s letters concerning the mistakes.