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Tax crime prosecution case studies

Our tax crime prosecution case studies show that people who deliberately cheat the tax system will be held accountable.

Last updated 9 January 2024

December 2023 – Former tax agent found guilty

Former Sydney tax agent, Ahmed Afifi, has been found guilty and sentenced to a 3-year intensive corrections order for dealing with the proceeds of crime after he lodged false and fictious income tax returns (ITR) on behalf of his clients.

Under the intensive corrections order, Mr Afifi will complete 430 hours of community service work and is prohibited from associating with his ex-business partner. He was also fined over $20,000 and order to pay reparation of over $175,000.

Through his Darlinghurst-based accounting practice, Coreplex Consultants, Mr Afifi abused his position as a tax agent and received refunds relating to ITRs which contained false information. The ITRs were lodged on behalf of 4 separate clients, resulting in more than $175,505 in fraudulent refunds being released into a bank account controlled by Mr Afifi, without the consent of the taxpayers.

In 2018, the ATO conducted an audit into the details claimed in the ITRs of several of Mr Afifi’s clients and found false information regarding gross income amounts, tax withheld amounts and work-related expenses claimed as deductions.

Mr Afifi was disqualified from practicing as a tax agent and deregistered from the Taxation Practitioner’s Board in 2018.

You can confidentially report suspected tax crime to the ATO by completing the tip-off form or phoning the tip-off hotline on 1800 060 062

September 2022 – Brothers busted for fake document scheme

Two brothers who ran an accounting firm have received criminal convictions for a scheme to falsify Commonwealth documents in order to obtain bank loans.

Yevgeni Bezhenar (also known as James) and Alexander Bezhenar of Halifax Business Consulting Pty Ltd (Halifax) in Melbourne were convicted on all counts after pleading guilty to several charges, admitting they commissioned the creation of false Commonwealth documents including Business Activity Statements (BAS) and Notices of Assessment (NOA) to obtain bank loans for their business and a number of clients.

We uncovered the scheme after auditing another matter and launching a subsequent investigation that saw search warrants executed at Halifax’s office as well as an employee’s home.

We found evidence that the Bezhenar brothers had paid employees and others to create false BAS and NOAs that inflated sales or earnings, which would then be passed off as genuine to banks and other lenders.

In several cases, they had commissioned the firm’s graphic designer, Eugene Vinarsky, to alter documents at their request.

The Bezhenar brothers would make handwritten amendments to the documents – sometimes doubling their clients’ actual earnings – before sending them on to Mr Vinarsky to digitally manipulate.

Mr Vinarsky went to great lengths to make the documents look legitimate. In one email, he reminded his boss, Yevgeni Bezhenar, to only provide one of the doctored documents by facsimile or hard copy, to avoid someone noticing he had edited the original document’s security stamp.

Mr Vinarsky was convicted for the part he played in the offending. He was sentenced to a 12-month Community Correction Order requiring him to complete 200 hours of unpaid community work.

Yevgeni Bezhenar was convicted and sentenced to 10 months imprisonment while his brother, Alexander, was convicted and sentenced to 6 months imprisonment. Both were released immediately on a $1,000 recognisance release order requiring them to be of good behaviour for 18 months.

Receiving a criminal conviction is serious. It can have a significant impact on your reputation, career prospects and ability to travel overseas.

If you know or suspect phoenix, tax evasion or shadow economy activity, report it to us by completing the tip-off form or phoning us on 1800 060 062.

September 2022 – Former tax agent jailed

A former tax agent has been sentenced to 6 years imprisonment with a non-parole period of 3 years and 6 months for claiming more than $800,000 in fraudulent refunds.

In his capacity as a registered tax agent, Mr Peter Lines managed the tax affairs of numerous individuals and businesses.

Between December 2014 and January 2018, he submitted several false tax returns in his clients’ names without their knowledge or consent. He also submitted some valid tax returns for his clients but directed the corresponding refunds to bank accounts he controlled.

Mr Lines tried to conceal what he was up to, but it all started to unravel when his firm detected a series of abnormal transactions and reported them to us.

In total, Mr Lines obtained $634,347 in fraudulent refunds, which he has been ordered to pay back. He also attempted to obtain an additional $180,986.

As part of our response to the shadow economy, we are committed to taking action against the small number of people who threaten the integrity of the tax profession.

This matter was also referred to the Tax Practitioners Board. Mr Lines’s tax agent registration has not been renewed.

August 2022 – Omitted income land former tax agent in trouble

A former tax agent who made false statements in a business activity statement (BAS) and tax return has been sentenced to 20 months imprisonment, released immediately on entering into a $10,000 recognisance to be of good behaviour for 2 years.

Mr Ilias Temblalexis was a registered tax agent practicing as a sole trader under the name H & I Financial and had more than 2500 clients.

But when we audited the business in 2018, we found Mr Temblalexis had drastically understated his income and GST on sales.

Our audit found the business’s 2017 tax return understated his income by $386,973, resulting in a tax shortfall of $194,603.79

We also discovered Mr Temblalexis only began reporting GST on his BAS from 1 July 2017, even though his business income had exceeded the reporting threshold a year earlier.

Further investigation found one of the BAS he’d lodged understated the amount of GST on sales by $71,666.

Shadow economy activities like these are not victimless crimes. Not reporting or under-reporting income has broader impacts on our community by reducing funds for essential services such as health, education and transport. It also makes it harder for honest businesses when others deliberately do the wrong thing to gain an unfair advantage.

In December 2019, the Tax Practitioners Board deregistered Mr Temblalexis as a tax agent for breaching the Tax Agent Service Act 2009.

August 2022 – Restaurateur served with jail term

A McLaren Vale restaurateur has been sentenced to 5 years and 3 months imprisonment after being found guilty of fraudulently obtaining $613,262 in GST refunds and attempting to obtain a further $210,333 that was stopped by the ATO.

Between September 2016 and November 2017 Mr Brad Redman submitted 19 false business activity statements (BAS), which considerably overstated the total sales and acquisitions of The Artel, the restaurant and gift shop business that he operated with his wife.

Several documents provided by Mr Redman throughout the audit contained inconsistencies, including a sales summary from a point-of-sale (POS) system that was actually created in Microsoft Word, and a POS report claiming to cover the dates of 1 June to 31 June, despite there only being 30 days in June.

During our audit Mr Redman also supplied a forged medical document advising his wife was receiving treatment for cancer. We later checked with the doctor listed on the document, who confirmed she didn’t write the letter and wasn’t treating anyone by that name.

In sentencing, Her Honour Judge Kudelka described Mr Redman’s offending as persistent and deliberate, and that his false claims about his wife’s health were despicable. Mr Redman was sentenced to 5 years, 3 months and 2 days imprisonment, with a non-parole period of 3 years. He has also been ordered to pay $599,122 in reparations.

Shadow economy activities like evading tax obligations and claiming more than what you’re entitled to are not victimless crimes. They make it harder for honest businesses to compete and impact on our community by reducing funds for essential services such as health, education, transport and infrastructure.

You can anonymously report tax evasion and shadow economy behaviour to the ATO by phoning 1800 060 062.

August 2022 – 5 years jail for serial GST fraudster

A Queensland woman has been sentenced to 5 years imprisonment, with a non-parole period of 20 months, for attempting to fraudulently obtain more than $650,000 in GST refunds, as well as other offences.

Ms Amanda Burman used ABNs that weren’t linked to active businesses to submit a series of false claims for GST input tax credits.

While some of Ms Burman’s earlier claims were paid, ATO audits found Ms Burman could supply no evidence to prove she was running a business. As a result, we advised Ms Burman that her claims were disallowed, and that her GST registration was cancelled.

Despite this Ms Burman repeatedly reactivated her GST registration and continued to make a series of fictitious claims. On each occasion our checks confirmed Ms Burman could not provide any supporting documentation that she was actually running a business, and each time her claim was disallowed.

In total Ms Burman obtained a financial benefit of over $150,000 and attempted to claim a further $500,000.

Evading tax obligations, or trying to get more than you’re entitled to, is a crime.

When you claim a refund, you’re not entitled to, you’re stealing from the community and disadvantaging everyone who does the right thing; it’s not fair and it’s not ok.

August 2022 – Property owner digs himself into a hole

South Australian man David Csongrady has received a criminal conviction and been fined $1,500 with orders to pay $699.30 in reparation after providing false documents to an ATO auditor about deductions for his rental property.

We started an audit into Mr Csongrady’s 2018 tax return after noticing deductions for gardening repairs and maintenance for his rental property were unusually high. When we asked him to supply details about the expenses, Mr Csongrady provided us with photos of some tax invoices relating to hire of a skip bin and the removal of some dead trees.

But when we contacted the business that provided these services to check, we found some discrepancies.

The original tax invoice showed Mr Csongrady hired the skip for $210, but the record he supplied to us showed $1,090. And an additional $1,000 had been added to the invoice for tree removal.

Following an investigation, Mr Csongrady was charged with 2 counts of incorrectly keeping records with the intention of deceiving or misleading a Commonwealth public official.

Receiving a criminal conviction is serious. It can have a significant impact on your reputation, career prospects and ability to travel overseas, as well as make it harder to borrow money or obtain insurance. It’s not something you can just sweep under the carpet. We know and trust that most people do the right thing. But when we see attempts to cheat the system, we take firm action.

This matter was prosecuted by the Commonwealth Director of Public Prosecutions.

May 2022 – False claims land swimming teacher in hot water

A former swimming teacher has been sentenced to 3 years jail for obtaining and attempting to obtain more than $250,000 in fraudulent GST refunds.

Ms Sasha Cordes lodged several original and amended business activity statements for her swim school business. In each case, she knowingly overstated the purchase amounts to obtain a financial advantage.

In total, $97,114 worth of fraudulent GST refunds were paid into her back account. She also tried to obtain an extra $181,947 but we stopped these refunds.

Ms Cordes will be released from jail after 15 months, on entering into a $1,000 recognisance on the requirement that she be of good behaviour for 2 years. She was also ordered to repay the full $97,114.

In sentencing, His Honour noted that the offending involved both deception and dishonesty and had been committed over an extended period.

As this case highlights, people who deliberately cheat the tax system will be caught and held to account.

April 2022 – Doctor prescribed jail time for failure to comply

A doctor from Western Australia has been sentenced to 7 months jail following a long history of non-compliance.

In February 2020, Dr Iain Russell was convicted and fined $50,000 for failing to lodge 5 tax returns and 13 business activity statements (BAS). As part of his sentence, he was ordered to submit the outstanding lodgments within 2 months.

When they were not received, he was prosecuted again. This time, he was charged with 18 counts of failing to comply with court orders under the Tax Administration Act 1953.

In April 2022, while sentencing Dr Russell, the Magistrate stressed that tax obligations are not optional, and that non-compliance places a burden on the rest of the community.

He will be released from jail after 2 months, upon entering into a $10,000 recognisance to be of good behaviour for the remainder of his sentence. As part of the good behaviour bond, he will need to lodge each of the outstanding tax returns and BAS by 30 September 2022.

While we’re committed to protecting the integrity of the tax system, the decision to prosecute is not one we make lightly. Before initiating prosecution action, we make multiple attempts to contact taxpayers to provide and help support.

If you’re falling behind on your obligations or have made an honest mistake, we will work with you to find a solution. But in instances like this, where people have consistently evaded their obligations and refused to comply, the consequences will catch up with them.

 

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