Criminal fraud convictions

02 Feb Criminal fraud convictions

The ATO is committed to dealing firmly with the small minority of taxpayers, intermediaries and others who commit fraud or other offences against the tax and superannuation laws.

Criminal prosecutions are our firmest strategy for dealing with the minority of taxpayers who commit fraud or deliberately evade their lawful obligations despite our increasingly intensive, and where possible supportive, efforts to achieve their compliance.

We share information and collaborate with other agencies, including law enforcement agencies and our international counterparts in detecting and dealing with serious abuses of the tax system. This includes cases investigated as part of the cross-agency Project Wickenby taskforce. Serious fraud cases are investigated by the Australian Taxation Office (ATO) and prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).

The courts can impose not only custodial sentences, but also fines and other penalties. Where the offence has resulted in a loss to the Commissioner, for example where a fraudulent refund has been received by the taxpayer, the courts normally order reparation.

Following are some examples of criminal fraud prosecutions that resulted in convictions between 1 April and 30 June 2012.

Case study: Lodging false business activity statements

 

A Queensland woman who lodged BAS for multiple businesses was convicted and sentenced to 2 years imprisonment after being found guilty of obtaining financial advantage. She had claimed fraudulent refunds on her activity statements over a period of 18 months.

As well as the custodial sentence, the court ordered the woman to repay over $55,000 which was equivalent to the amount of refunds that she had received.

Case study: Project Wickenby

Three NSW co-directors of an air conditioning company used illegal ’round-robin’ schemes, where money labelled as ‘company expenses’ was transferred to a Vanuatu account and returned ‘tax-free’ to the taxpayers’ personal accounts.

One of the company directors was convicted and sentenced to four years jail with a non-parole period of two years for defrauding the Commonwealth. His wife, also a co-director, was sentenced to three years imprisonment with a non-parole period of 15 months, while their business partner received the equivalent of a two year suspended sentence.

In making his decision the Judge stated “Most people would probably welcome the chance not to pay income tax; it would make a substantial part of their income available for spending as they pleased.

But most people acknowledge the obvious need for the government to levy income tax. It can provide essential services to us all as well as support those who have little or no income to be taxed.”

Case study: Income tax fraud

 

A Queensland woman was convicted and sentenced to two years jail for attempted income tax fraud of nearly $73,000.

She submitted false income tax returns for a number of prisoners who were serving time in a Queensland prison. She falsely claimed that the prisoners were employed by various companies who had never employed them. The false returns resulted in refunds being paid into a bank account that the woman controlled.

Case study: False education expense claims

A NSW man was sentenced to 10 months jail for making false self education expense claims of over $64,000 in his 2009 income tax return.

Investigations revealed that the man had fabricated invoices for expenses he said he incurred at an Australian University at which he had never been enrolled.

He also claimed expenses for a study trip to Singapore. Department of Immigration and Citizenship (DIAC) records showed that the man had not travelled to Singapore in the period he claimed to have undertaken the foreign course.

Case study: lodging false business activity statements

A Queensland man was convicted and sentenced to 3 years jail for lodging false BAS statements for four companies that he was the authorised contact for.

He submitted false invoices for motor vehicles he claimed the businesses had purchased, which investigators found to be fraudulent when checking details with the motor dealers. He attempted to receive fraudulent GST refunds of $105,576 with these false invoices.

Case study: stolen personal details used to submit false business activity statements

 

A NSW man was convicted and sentenced to 3 years jail for using stolen identities to submit false Business Activity Statements and therefore claim GST refunds that he was not entitled to.

He registered Australian Business Numbers for businesses in the names of seven of the identities he stole. He then submitted Business Activity Statements for these businesses and claimed false GST refunds for these companies. The refunds were paid into bank accounts he had set up in the names of the stolen identities.

Case study: false fuel credit claims

A Queensland man was convicted and sentenced to 6 years jail and ordered to pay reparation of $1.37 million for claiming false diesel fuel credits that he was not entitled to.

He claimed he owned and hired a number of transport vehicles for which he purchased diesel fuel for transporting goods across Australia. He claimed total rebates of over $1.5 million for diesel fuel he claimed to have purchased for transportation of goods.

Investigations revealed that many of the vehicles he claimed diesel fuel credits for were not transport vehicles, but were normal sedan type motor vehicles. His former employees also advised that the businesses the man operated were for storage of transported goods rather than transporting the goods, so he would not have had to purchase the diesel fuel that he claimed he had.

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