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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 case studies below reinforce that those who deliberately cheat the system will be held to account.

    On this page:

    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

    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.

    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 income 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 (TFN) 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.

    See also:

    Last modified: 26 Jun 2019QC 58778