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The scheme - how it was set up

Operation 4 – how the scheme was set up.

Published 11 February 2024

Stage 1

The Tier 1 developers contracted the Tier 2 building companies to construct a development, such as a hotel and golf course.

Stage 2

The Tier 2 building companies obtained supplies or labour from the small (shell) Tier 3 suppliers, such as a bricklayer.

Stage 3

The developer claimed they paid GST to the building companies and the building companies claimed they paid GST to the sacrificial suppliers – GST skimming. Grossly inflated construction costs and purchases of goods between the companies that never actually occurred were also recorded to claim additional GST.

Stage 4

Mr Li Zhang conspired with the intention to cause loss to the Commonwealth of $15 million by fraudulently obtaining GST refunds.

He was sentenced to 10 years in jail with a non-parole period of 6 years and 8 months.

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