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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