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GST fraud case studies

These case studies show that we take GST refund fraud very seriously.

Last updated 15 June 2022

GST fraud

GST refund fraud is claiming a tax refund or other benefit by providing false information to the ATO. It is not accidental because it is undertaken in a deliberate and dishonest way. Below is a summary of individuals that have had action taken against them for becoming involved in GST fraud.

April 2022 – False claims land swimming teacher in hot water

A former swimming teacher was sentenced to 3 years jail for claiming fraudulent GST refunds.

She lodged several original and amended business activity statements (BAS) for her swim school business. In each case, she deliberately overstated the purchase amounts to obtain a financial advantage.

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

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

March 2022 – Former tax accountant and bank manager sentenced to 3 years jail

A former tax accountant and bank manager was sentenced to 3 years jail for attempting to obtain a financial advantage of more than $390,000.

As the owner, director and authorised tax representative of a bank franchisee, he failed to lodge any BAS for 2 years. An audit revealed he owed nearly $200,000 in taxes and penalties.

He subsequently lodged 66 false BAS, in which he deliberately reduced the pay as you go (PAYG) withholding to nil. Not only did this eliminate the debt, but it also created a credit of $144,538.

Our investigations found the revisions to be entirely fraudulent, so the refund was never released.

March 2022 – Fraudster tracked down

After evading authorities, a man who obtained more than $171,000 in fraudulent GST refunds was sentenced to 2 years and 8 months jail.

The New South Wales man claimed his business had made more than $3.3 million in sales, claiming corresponding acquisitions and input tax credits. However, when we commenced an audit, it became clear the claims were false.

In addition to his jail term, he was ordered to repay the full amount.

January 2022 – GST fraudster jailed

A man who pretended to be running a business to get his hands on fraudulent GST refunds was sentenced to 3 years jail.

He falsely claimed his business had made more than $300,000 in sales, claiming $256,955 in GST credits.

In total, he obtained $189,270 in fraudulent GST refunds. He also attempted to obtain an additional $39,778, but this was stopped by our officers.

When the matter was heard in court, he pleaded guilty to 13 counts of obtaining a financial advantage by deception and one count of attempting to obtain a financial advantage by deception.

September 2021 – Jail time for phoenix operators

A group of 3 men were jailed for orchestrating an elaborate illegal phoenix operation that saw them pocket more than $4.6 million.

The trio established multiple labour hire companies. But despite charging their clients GST, they didn’t remit these funds to the ATO. They also included PAYG withholding on the workers’ payslips but failed to pass these amounts on.

Significant debts were raised after the companies were audited. But because they were withdrawing funds from company accounts on a regular basis, there were insufficient funds to cover the debts.

To continue the operation, they would simply create new companies, often appointing straw directors to cover their tracks.

The trio were sentenced to 8 years jail, 5 years jail, and 4 years jail, respectively, and were required to pay the full amount back.

August 2021 – Back to the drawing board for phantom property developer

A Queensland director was prosecuted for falsely claiming more than $200,000 in GST refunds.

As the sole director of a property development firm, he said he was involved in constructing a high-rise apartment building. But further investigation showed he didn’t own the land and hadn’t submitted any development applications for the site. He falsely claimed a range of non-capital expenses he hadn’t incurred.

The Queensland man was sentenced to 3 years jail to be immediately released on a recognisance release order and a 3-year good behaviour bond of $5,000. He was also ordered to pay the money back.

July 2021 – Businessman busted

A businessman and former tax agent was charged with 2 counts of dishonestly obtaining a gain from the Commonwealth.

The Melbourne man falsified a number of BAS in his client’s name, which resulted in him obtaining $135,248 in fraudulent GST refunds. Emails uncovered by our investigators showed he had told his employees to “keep their traps and emails shut” about the false refunds.

He was sentenced to 2 years jail to be released immediately on a $5,000 good behaviour bond.