James Colin Raea has been a member of the New Zealand Institute of Chartered Accountants for 12 years, in that time he has allegedly been personally involved in tax fraud worth NZD 312 600, and an additional NZD 864 049 through companies he was involved with. Recently, at the Auckland District Court James Colin Raea admitted to 41 charges involving Goods and Service Tax (GST) and income tax, and sixteen similar charges for a company in which he was the sole-director. James Colin Raea chose to defend himself against an additional 31 charges, but was still found guilty.

James Colin Raea is alleged to have committed a series of his tax offenses through three companies in which he was the sole-director: Tuscany Way Limited, Anvil Holdings Limited, and Te Atatu Projects Limited.

The Inland Revenue Department (IRD) has already recovered NZD 280 000 from James Colin Raea’s debts. However, no money has yet been retrieved for tax debts incurred by his operating companies.

Jonathan Matthews, Investigations Manager of Assurance at the IRD, stated that the New Zealand courts take “a dim view of professionals like Mr Raea,” who use their extensive knowledge of the tax system for illicit personal gain.

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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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On October 8th Isobel Dick was sentenced to home detention after pleading guilty to five charges surrounding GST and income tax returns that she filed for her clients. She allegedly claimed several of her clients’ non-business related expenses as legitimate business costs on their tax returns, including holidays to Fiji and Bali, jewellery, clothes, groceries, private entertainment, mortgage payments and vet bills. According to the Inland Revenue Department (IRD), over the period from 1999 to 2002 she was responsible for NZD 758 732 worth of tax discrepancies.

The IRD claims that Isobel Dick operated a relatively small tax agency, with only 35 clients, the majority of whom were sole traders or small companies. She instructed her clients to provide her with all of their personal and business receipts, most of which were claimed to be business related, regardless of their nature. Reportedly, none of the clients were aware of Isobel Dick’s actions on their behalf.

Jonathan Matthews, IRD Investigations Manager of Assurance, said that tax agents are expected to hold the highest standards of honesty, and Mrs. Dick’s actions “displayed the complete opposite behavior.” He commented further, saying that she knowingly filed fraudulent returns, and subsequently ‘was ripping off other honest tax payers.”

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Georgie Jensen was sentenced on December 3rd, in the Waihi District Court, after pleading to 13 counts of non-payment of PAYE. Graham Pomeroy, Inland Revenue Assurance Manager, commented on the offences, saying “Failure to meet PAYE obligations is a breach of trust between the director and the employees. But in Jensen’s case, it wasn’t just PAYE but also child support and student loan deductions”.

Georgia Jensen was the director, sole shareholder and an employee of NZ Rigging Services Limited, which she incorporated in 2007. In the period between March 2008 and May 2009, a total of NZ$74,016.69 of PAYE and other employee deductions was withheld from the IRD. Georgia Jensen Since it incorporation, only NZ$7,000 of PAYE payments have been filed by NZ Rigging Services.

Reparation was not sought by the judge, as Georgia Jensen is currently unemployed. Though he did label her actions as “premeditated and deliberate”. Graham Pomeroy commented further by saying that when tax payers act against the system, they not only compromise the integrity of the tax system but cheat the community.

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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.

The former lifetime Surf Life Saving member and manager, Alison Douglas was sentenced to three and a half years jail time, after pleading guilty to 23 charges of tax fraud involving PAYE. Deductions from employee wages were taken by Douglas herself and not paid to the IRD. These amounted to $61,518.61 in total, or $88,538.87 after penalties and interest, after the $11,910.44 she has already made.

Separately, Alison Douglas also pleaded guilty to 18 charges of fraud and 1 charge of theft in a case brought forward by the police. Douglas had also overpaid herself by $198,764 in the years between 1998 and 2008, along with spending $6783 on un-authorized travel for herself and her family. Under questioning she justified this by claiming that she was bringing her own pay in line with other region’s Surf Life Savings managers, and the amount of work she was doing.

Pravin Kumar Patel was discovered to be attempting to commit tax fraud after a tax audit on his business. In 2002 he purchase a dairy in Auckland, only to sell it the subsequent year, and repurchase a similar store in Hamilton. In 2006 an audit was conducted on his business, and it was discovered that in three years of the Hamilton business’s lifetime $370,000 was undeclared and deposited into accounts held by Pravin Kumar Patel or his family.

In the March of 2007, Mr Patel mislead his tax agent and claimed he was leaving the country to take car of his sick father in India, he left to Australia instead. He also transferred $370,000 into a Melbourne based bank account. He has since been extradited back into New Zealand.

The undeclared money, in the period between April 2004 and May 2007 resulted in $148,620 in income tax, GST and overpaid Family Support tax credits, without subsequent penalties and interest. He has currently repaid $205,000 with another $20,000 due.

Rajpal Singh Dhillon was sentenced to six and a half years jail time by the Napier District Court on the 7th of May. He was found guilty of 50 charges of PAYE and GST tax evasion earlier last month. In aggregate it is estimate that $3,311,000 worth of tax evasion was perpetrated. The Inland Revenue Department is seeking to seize a residential property held in a trust controlled by Rajpal Singh Dhillon.

The fraud involved the falsification of invoices in a ring of three companies and 25 shared sub-contractors, between the years of 1998 and 2007. Similar schemes have been perpetrated in the agricultural industry. The last five years has seen 31 other people prosecuted for a total of $26.5 million worth of tax fraud.

Graham Edward McCready would alter the GST and income filings of his clients and his own in order to generate extra expenses or incomes. It is claimed by the prosecution and the Inland Revenue Department (IRD) that in many cases the false refunds sent to clients was used by Graham Edward McCready for his own expenses.

His clients have claimed to not have any knowledge of fraudulent activity committed on their behalf and were lead to believe that all refunds were genuine, and that they did not know what forms they were asked to sign.

Originally the courts laid 50 charges of tax fraud against Graham Edward McCready, to which he pleaded not guilty. When a reduced sentence was offered he accepted pleading guilty to 12 charges of fraud equaling to $183,155. This consisted of $92,320 of income fraud and $90,835 in GST refunds.