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.

Photo by kenteegardin

Gary Adrian Koornneef, a Paraparaumu based property developer has been sentenced to 12 month home detention for his GST fraud. It was alleged that over the period covering September 2002 to September 2005, Gary Koornneerf sold a total of eight properties but failed to pay the appropriate GST on them.

In the June of 2001, a property was purchased by Advantage Construction and Consultancy Limited (“Advantage”), Gary Koornneef’s own company. This property was later developed and sold as a set of three subdivisions. In the July 2002 a property was purchased and later divided into five subdivisions, all of which were sold. There was no GST payment on any of these. Although, four were not filed the other came as a “Nil” return.

Gary Koornneef was open about the fact that he did not pay the returns, and instead sued the money to settle previous debts. In total, the fraud amounted to $233,500.01. This amount has been ordered to be paid back.

Timothy Andrew Penniket, a Tauranga based man, was charged with obtaining wage records from a company run by his mother. He is then alleged to have used these records to register 14 of the mentioned employees for GST via the internet, directing any funds to his own bank account, or one used by his associate. In total, thirty two returns were submitted by Timothy Penniket.

The Inland Revenue Department (IRD) has so far recovered $16,127 from the bank account, a further $6,501 has been made in reparation by the associate. The court has also ordered $16,387 to be repaid, totaling the amount that has yet to be recovered by the IRD.

Derek Hugh Perry was sentenced to 12 month home detention on the 3rd of June, after he was found guilty on 22 charges of GST fraud. Seemingly due to his poor health, Derek Perry was sentenced to home detention, as opposed to jail time.

In the time between May 2005 and May 2007, while based in Taupo, Derek Hugh Perry filed false returns for two businesses, of which he was the sole proprietor. The two businesses, Derek Perry & Associates Limited and Aunt Ruth’s Sauce Company, were both established by Derek Perry, but never succeeded past their initial set-up phase. Yet, regardless, Derek Perry filed tax returns for both. Derek Perry & Associates limited was subject to 13 returns, which amounted to $57,960. Aunt Ruth’s Sauce Company had 9 returns and claimed refunds of $44,421.

Derek Perry has also been ordered by the court to pay reparation to the value of $92,326, which was the total amount of GST refunds he received.

Auckland based Graham Ashley Robert Palmer, has been sentenced to 15 month in jail for his GST fraud. He has already served jail time for previous GST fraud in 1988, the offense amounted to $2.6 million of fraud.

In this case, in the August of 2006, Graham Ashley Robert Palmer submitted an electronic GST return for a company for whom he is the only shareholder, Rexon Ltd. It contained purchases of $650,000 and garnered a return of $81,250. In the following month additional purchase invoices were faxed in, reporting an additional $731,250 in purchases, with $91,406.25 of refunds. The invoice company is owned by an associate of Graham Ashley Robert Palmer.

Upon audit, the IRD found that the materials and purchases stated in the invoices was either overstated or non-existent.