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  • Tax crime prosecution case studies

    From failing to lodge tax returns to submitting false work-related expenses, we will not tolerate any form of tax crime.

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    July 2021 – False claims catch up with Melbourne businessman

    A Melbourne businessman and former tax agent has narrowly escaped jail after pleading guilty to obtaining $135,248 in fraudulent GST refunds.

    At the time of offending, Mr David Brandi was the principal of a tax and accountancy firm.

    One of the firm’s clients built residential units, which they managed through a group of property development companies.

    In his capacity as a registered tax agent, Mr Brandi prepared the business activity statements for these companies. But he added extra amounts to the construction costs, which inflated the GST refunds. The resulting refunds were then deposited into the firm’s bank account.

    Our investigation uncovered emails from Mr Brandi, telling employees to ‘keep their traps and emails shut’ about the dodgy refunds.

    He later pleaded guilty to two counts of dishonestly obtaining a gain from the Commonwealth and repaid the full amount.

    He was sentenced to two years jail to be released immediately on a $5,000 good behaviour bond.

    In 2020, Mr Brandi also had his registration terminated by the Tax Practitioners Board (TPB). This was on the grounds that he had breached the Code of Professional Conduct and failed to comply with tax laws for his personal affairs.

    We and the TPB are committed to maintaining the integrity of the tax profession by taking appropriate action against those not doing the right thing.

    July 2021 – Sydney accountant receives 18 month community corrections order

    Sydney accountant My Dung Ho (also known as Sarah or Sandra Ho) received a criminal conviction and an 18 month community corrections order after pleading guilty to dishonestly obtaining a financial advantage by deception.

    We joined forces with the NSW Police Force to investigate Ms Ho’s activities after we identified suspected fraudulent activities that occurred while she was briefly employed at a Sydney firm in late 2018.

    Investigations confirmed Ms Ho had secretly lodged amended business activity statements for three of the firm’s clients and directed tax refunds to her personal bank accounts. In total Ms Ho obtained $4,472, and a further refund of $2,880 was stopped before payment was made.

    She made the first fraudulent amendment just two days after starting work with the firm.

    At Downing Centre Local Court last month Ms Ho pleaded guilty to two counts of dishonestly obtaining a financial advantage by deception. She received a criminal conviction along with an 18 month community corrections order and a $2,200 fine. She was also ordered to repay the $4,472 she had obtained.

    Since then Ms Ho has also been arrested and charged in relation to further fraud offences.

    This matter was prosecuted as part of our work to tackle the shadow economy, ensuring that dishonest and criminal activities which avoid, misuse or abuse the tax system are addressed.

    July 2021 – Trucking boss's fraudulent scheme runs out of gas

    A South Australian man who created fake transport companies to get his hands on more than $3.8 million in fuel tax credits has been sentenced to ten years jail.

    Mr Reginald Roberts, who already operated trucking businesses in South Australia, created three additional companies. He then lodged 75 false claims under the Diesel and Alternative Fuel Grants Scheme and the Energy Grants Credit Scheme.

    These schemes, which have since been replaced by fuel tax credits, were designed to allow eligible heavy road transport businesses to claim back 18.51 cents per litre of fuel each month.

    Across the three companies, Mr Roberts claimed more than 20 million litres of fuel, but there was no evidence to suggest the fuel had ever been purchased. Further checks confirmed there were no trucks registered to any of the companies.

    Mr Roberts used the aliases ‘David Campbell’ and ‘Phillip Williams’ in an attempt to cover his tracks, but a collection of evidence, including fingerprints on a signed document, ultimately led us to him.

    We have approximately 256,000 fuel tax credit registered clients, and we generally see very high levels of compliance.

    For the small number of people who attempt to cheat the system, the consequences will catch up with them.

    June 2021 – Man cops criminal record for false WRE claims

    A finance and IT manager who made false work-related expense claims in his income tax returns has been convicted and fined at the Southport Magistrates Court.

    Mr Gavin Crosswell claimed ‘other work-related expenses’ totalling $86,229 and $79,472 respectively in his 2016 and 2017 tax returns.

    Our systems immediately flagged that the claims were unusually high for someone of his income and occupation. But he ignored the real-time warnings asking him to double-check his claims and proceeded to lodge them.

    When we commenced an audit, Mr Crosswell took it a step further by submitting a voluntary disclosure form increasing his ‘other work-related expenses’ in the 2016 tax return to $104,837. In doing so, he attempted to claim an additional $18,608 of work-related expenses.

    Mr Crosswell provided 47 invoices and 8 bank statements in an attempt to substantiate his claims, but checks proved they were false or altered. He hadn’t incurred the expenses relating to 46 of the invoices, and the remaining invoice was for private expenses.

    As well as 58 criminal convictions being permanently entered on his record, he was fined $4,000 and ordered to pay $75,000 to the Commissioner, plus court costs.

    If you have a criminal record, you may have to declare it to authorities and employers. It may impact your ability to:

    • volunteer
    • work with children
    • apply for insurance
    • obtain travel visas.

    These convictions will also go against you if you are ever before a court again.

    Make sure you double-check your claims this tax time!

    March 2021 – Criminal conviction for tax agent's false returns

    A New South Wales tax practitioner has been convicted and sentenced to an 18-month Community Corrections Order for SMSF auditor number (SAN) misuse.

    Over five years, Mr Konstantino Koufos lodged 30 self-managed super fund (SMSF) annual returns on behalf of 13 clients.

    He falsely claimed they had been audited by an approved SMSF auditor and entered details of an auditor who was completely unaware his details had been used.

    It was only when the auditor received a letter from one of Mr Koufos’s clients that he knew something was wrong. To his surprise, they were seeking information about audit reports that were said to have been prepared in his name. The auditor contacted the Institute of Chartered Accountants Australia and New Zealand to inform them his SAN had been used without his knowledge.

    When we launched an investigation, it became clear Mr Koufos had engaged the auditor’s services in 2014, but no further contact had been made since then. Mr Koufos deliberately provided false information in the returns, including approved audit completion dates for each fund.

    As part of the ATO’s response to the black economy, we support tax professionals and the integrity of the profession by taking appropriate action against those doing the wrong thing.

    As the outcome of this case shows, deliberate and sustained behaviour may result in a criminal conviction.

    See also:

    March 2021 – Cop couple caught and convicted

    A New South Wales couple who were employed as police officers found themselves on the other side of the law after making multiple false work-related expense claims.

    In their 2017 and 2018 income tax returns, husband and wife Paul MacDonald and Kathryn Goddard claimed a range of deductions they hadn’t legitimately incurred. As a result, they received refunds totalling $28,483 and $17,851 respectively.

    Our systems immediately detected the claims were unusually high, but Mr MacDonald and Ms Goddard ignored system-generated warnings and proceeded with their returns.

    When we commenced an audit, the pair provided a number of false documents in an attempt to substantiate their claims. For example, they provided a letter claiming to be from a Senior Sergeant at their work. Upon further inspection, the person’s name had been spelled incorrectly, their title and phone number were wrong, and the local area command referenced on the document no longer existed.

    The pair also provided fabricated invoices for work-related travel. Ms Goddard falsely claimed to have spent $464 per night at a Port Macquarie motel and Mr MacDonald falsely claimed to have spent $578 per night at a Tea Gardens resort. In reality, the ‘weapons training’ they claimed to have attended in these locations didn’t exist.

    Mr MacDonald and Ms Goddard have since repaid the amounts they obtained.

    When their case was heard at East Maitland Local Court, they were both convicted and sentenced to a two-year good behaviour bond in the sum of $2,000. They also ‘copped’ a $3,000 fine.

    Receiving a criminal conviction is serious. It can significantly impact your employment, reputation and ability to travel overseas. Don’t take the risk.

    See also:

    Last modified: 02 Aug 2021QC 58778