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  • Tax crime prosecution case studies

    From failing to lodge income tax returns to submitting dodgy work related expenses, we will not tolerate any form of tax crime. The following case studies reinforce that those who deliberately cheat the system will be held to account.

    Latest news

    Tax fraudster who stole the identity of 52 people jailed

    A Queensland man who tried to steal more than half a million dollars worth of tax refunds from unsuspecting job applicants was recently sentenced to five years jail.

    Mr Micah Robby Elstak used the aliases Robert Ketting-Oliver and Ryan McCarthy to orchestrate an elaborate online job scam, which involved conducting fake interviews over the phone. After emailing applicants to confirm they had been successful, Mr Elstak requested a scanned copy of their driver’s licence, bank account details and tax file number.

    Mr Elstak used this information to create myGov accounts or to take over applicants' existing myGov accounts.

    After linking the myGov accounts to ATO online services, Mr Elstak lodged tax returns in their names. These refunds were credited to one of the 63 bank accounts he controlled.

    Along with our cross-agency partners at Queensland Police, we quickly identified the scheme, with $378,099 of the $565,895 Mr Elstak attempted to claim stopped before it reached his bank accounts.

    It serves as an important reminder to beware of what you share. Your employer will only need you to provide details like your TFN and bank account details in a TFN declaration once you start work.

    You should also use SMS codes as your sign-in option for myGov, as this is a quick and secure way to sign-in to access ATO online services.

    If you or someone you know has paid or provided personal identifying information to a scammer, call us on 1800 008 540 to report it straight away.

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    Egregious intermediaries

    Tax agent con caught and convicted

    NSW man Nigel Bradshaw (also known as Bruce Bradshaw) has been sentenced to twelve months jail for ripping off his clients and the community through an income tax fraud.

    Between 2010 and 2015, Mr Bradshaw lodged a number of income tax returns and amended income tax returns containing false information. He fraudulently under-reported income in order to gain inflated refunds, substituting his postal and bank account details for his clients'. Refunds were funnelled through a bank account Mr Bradshaw controlled before being passed on to his unwitting clients, with Mr Bradshaw pocketing the inflated difference.

    On other occasions, Mr Bradshaw lodged correct income tax returns on behalf of his clients, but still siphoned off some refunds into his own accounts.

    His activities resulted in a loss to the Commonwealth of $84,063 and a loss to eight individual taxpayers of $12,069.

    His theft was uncovered when his former employer, a property investment services company in Sydney, cleaned out some old filing cabinets and found a number of notices of assessment (NOAs) that had been fraudulently altered.

    As well as his criminal conviction, Mr Bradshaw was issued with full reparation orders.

    We share an interest with professional associations in ensuring the integrity of the tax profession. The Tax Practitioners Board terminated Mr Bradshaw’s registration in 2015.

    Failure to lodge

    Company director sentenced for ongoing non-compliance

    A company director has been convicted and fined $51,500 after pleading guilty to seven charges relating to outstanding activity statements and failing to comply with information notices.

    Mr Michael George Fotios, the Director of private resource company Delta Resource Management Pty Ltd, was convicted and fined $37,500 for failing to lodge five activity statements from 1 January 2016 to 31 March 2017.

    He was also convicted of failing to provide information and documents to us as required by notice. He was fined $7,000 on each of the two charges relating to this failure.

    Mr Fotios was fined a total of $51,500 across all seven charges in the Perth Magistrates Court after the magistrate considered his:

    • plea
    • financial circumstances
    • lodgment of the relevant returns
    • compliance with the information gathering notice.

    The magistrate said due to the history of non-compliance and the seriousness of the offences, imprisonment was seriously considered as a sentencing option, however, the appropriate penalty was applied. He described Mr Fotios’ non-lodgment and non-compliance as contemptuous.

    If you are aware of fraudulent behaviour you can report a concern confidentially or phone us on 1800 060 062.

    False work-related expense claims

    Incorrect deductions land chef in hot water

    A Queensland woman has been convicted of three criminal offences after making false and misleading statements on her tax returns.

    Ms Helen Feulufai was employed as a chef at a hospital, where she was supplied with a full work uniform, personal protective equipment and tools by her employer. She was also not required to travel or use her own vehicle in the course of her employment. Despite this, Ms Feulufai claimed travel and clothing expenses as work-related deductions on her 2016 to 2018 financial year tax returns.

    She also claimed charitable donations to an organisation that was not registered as a deductible gift recipient, in order to obtain refunds to which she was not entitled.

    The refunds amounted to more than $45,000 over three years.

    Ms Feulufai had been audited previously for claiming similar deductions, and in both cases was sent a letter providing education about valid deductable expenses for travel, vehicle and charitable donations.

    In addition to repaying the refunds, in June 2019 Ms Feulufai was ordered to pay a fine of $3,000, as well as an additional $20,000 payment to the Commissioner of Taxation and court costs.

    Five employees convicted for false WRE claims

    Five employees of an engineering firm have been convicted and ordered to pay orders and fines of more than $50,000 for making false work-related expense (WRE) claims.

    In 2015 we identified unusual patterns of WRE for car and travel expenses being claimed by Bechtel employees at Curtis Island. Checks with the employer confirmed the company reimbursed all drive-in, drive-out employees for their travel expenses, and that they were not entitled to claim any costs in their tax returns.

    The employees had been given tax advice by their employer in relation to WRE. We also developed a fact sheet which Bechtel issued to affected individuals with their payslips.

    As part of the engagement process, we met with registered agents of the affected employees, and provided a new tailored webpage for Bechtel employees. We also established a dedicated email and hotline number for employees seeking further advice on how to amend their returns and avoid a potential penalty.

    While most employees chose to voluntarily amend their tax returns, some declined the opportunity or continued to claim incorrect WRE deductions. This resulted in the conviction of five Bechtel employees for falsely claiming WRE and they have been ordered to pay a total of $54,315 in orders and fines.

    Convictions:

    • Mr Michael Doon was convicted in the Southport Magistrates Court on 15 October 2018 for making a false and misleading statement. He received a $700 fine and was ordered to pay an additional $7,840.
    • Mr Ralph Mueller was convicted in the Brisbane Magistrates Court on 16 April 2019 for making a false and misleading statement. He received a $500 fine and was ordered to pay an additional $8,000.
    • Mr Arnulfo Elpa was convicted in the Townsville Magistrates Court on 8 October 2018 for recklessly making a false or misleading statement (s8N). He received a $1,000 fine and was ordered to pay an additional $9,509.
    • Mr Phillip Frid was convicted in the Brisbane Magistrates Court on 12 October 2018 for recklessly making a false or misleading statement (s8N). He received a $1,000 fine and was ordered to pay an additional $19,766.
    • Mr Phillip Presley was convicted in the Latrobe Valley Magistrates Court on 16 October 2018 for recklessly making a false or misleading statement (s8N). He received a $6,000 fine.

    GST fraud

    Not-for-profit not compliant

    Most Australian charities work hard to get their tax and superannuation obligations right. We’re committed to detecting and dealing with the small number of organisations that intentionally or dishonestly avoid their obligations, or try to claim refunds or other payments they’re not entitled to.

    On 15 August 2019, Ms Nicole Hocking received a criminal conviction for deliberately submitting false business activity statements (BAS) on behalf of her charity ‘Help Save the Furry Ones’.

    An audit of the charity’s accounts found Ms Hocking had submitted a number of original and amended BAS that overstated the GST input tax credits the charity was entitled to, gaining a financial advantage of more than $34,000. Evidence about the income generated by the charity did not match up to the claimed expenses. During the audit Ms Hocking was unable to explain these claims or provide receipts or documentation to support them.

    Ms Hocking’s charity has now been stripped of its Australian business number (ABN), GST role and associated tax concessions. In addition to her criminal conviction, Ms Hocking received a 12-month prison sentence, released immediately on a two-year good behaviour bond. She was also ordered to pay reparations of $34,265.

    Accounting student imprisoned for GST fraud

    A South Australian man who used his accounting knowledge to set up a fake business has been sentenced to two years and four months jail for attempting to obtain nearly $1.5 million in refunds he wasn’t entitled to.

    Mr Adam Hamshere, 39, obtained an ABN, intending to provide bookkeeping services. He later registered for GST and Wine Equalisation Tax (WET), claiming he sold cigars.

    On 31 March 2016, Mr Hamshere lodged five BAS, claiming he was entitled to GST and WET refunds of $1,444,069. He phoned us the next day asking for his refund to be paid that day.

    This attracted our attention and our risk rating engine (RRE) created a review item once the BAS were lodged. An audit was commenced the next day. Despite being told his refunds were being audited, Mr Hamshere phoned again asking for his refund on numerous occasions.

    Detailed investigations found no evidence of business activity, nor evidence of Mr Hamshere’s claims that his paper and electronic records had been stolen.

    Mr Hamshere was charged with six counts of section s11.1 & s134.2(1) of The Criminal Code 1995 as he attempted, by deception, to dishonestly obtain a financial advantage from the Commonwealth.

    Refund fraud

    Three years and three months jail for tax fugitive

    On 30 May 2019, a 56-year-old New South Wales man was sentenced to three years and three months jail a decade after he fraudulently obtained and attempted to obtain more than $200,000 from the ATO. He was also ordered to pay reparations of $154,188.

    Between 2002 and 2004, Mr Peter Garven lodged three fraudulent tax returns on behalf of Peter Garven Consulting and Garven Resources, netting himself $102,504 in refunds he was not entitled to. After submitting a string of false business activity statements, Mr Garven fraudulently obtained a further $51,684 in GST refunds.

    Following extensive audit activity, in which Mr Garven was given every opportunity to amend his returns, the matter was referred to the courts.

    When Mr Garven failed to appear for trial, a warrant was issued for his arrest. Mr Garven remained a missing person until he was arrested by New South Wales Police in 2017.

    The outcome of this case sends a strong message to the community that people who cheat the tax system will be caught and will be held to account. While we are here to support you, we take firm action against those who deliberately do the wrong thing.

    Man convicted of income tax fraud

    A tax scam involving handwritten income tax forms, lodged fraudulently on behalf of a number of overseas citizens whose personal details had been stolen, has led to a jail term for an overseas citizen.

    In March 2019, Mr Tharun Likki was sentenced to two years and three months jail for fraudulently obtaining more than $117,000, and attempting to obtain another $22,180. Working with others, Mr Likki illegally obtained the visa details of a number of Indian nationals living in Australia, using their details to generate tax file numbers (TFNs) and then lodged paper tax returns on their behalf.

    Mr Likki filled out a number of the forms himself, confirmed by handwriting analysis during the investigation.

    The fraud was uncovered by an anonymous report received through the Tax Evasion Referral Centre.

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    Last modified: 16 Oct 2019QC 58778