Jail time for GST fraud

One example:  A luxury property developer who caused a loss of $3.4 million to the Commonwealth through GST fraud has been sentenced to six years’ jail after an ATO investigation.

Manly man Benjamin Ensor was sentenced in the NSW District Court to six years in jail and ordered to pay reparations of more than $1.8 million.  Ensor’s conviction came after an ATO investigation found he had structured his companies to fraudulently obtain GST credits and failed to report property sales to avoid paying GST, causing a loss to the Commonwealth of $3.4 million.

Between 2008 and 2011, Ensor lodged false BAS statements on behalf of nine companies of which he became the sole director, using the money he obtained to fund the purchase of luxury items including a marina at Lake Macquarie, a catamaran and a unit to live in.

The funds were also used to meet expenses incurred during the course of developing five beachfront luxury apartments in Manly.  He reported his companies’ expenditure was more than $24 million and claimed more than $2.2 million in GST refunds.  He also failed to report the sales of the Manly apartments on which he should have paid GST of more than $1.5 million.

In making GST refund claims, he created false invoices that showed related companies provided project management services, and produced fraudulent invoices for the purchase of high-value excavators, trailers, trucks and catamarans.

ATO assistant commissioner Aislinn Walwyn said the conviction represented the agency’s stance against illegal phoenix behaviour and tax crimes.  “This case exhibits classic illegal phoenix behaviour. Companies were deliberately liquidated to avoid paying creditors and taxes. New companies continued operating the same or a similar business with the same ownership,” Ms Walwyn said.

Another example:  The Maroochydore District Court sentenced David Latemore to two and a half years in jail for GST fraud and ordered him to repay more than $130,000 that he fraudulently obtained.

Between October 2008 and February 2013, Latemore lodged eight BAS and fraudulently obtained $138,723 in GST refunds and attempted to obtain a further $962,772.  Although Latemore stated that he was the director of a motor vehicle and yacht business, an ATO audit found the company had no business activity, did not make any business sales or purchases, had not paid any GST and had no entitlement to receive the GST refunds claimed.  He also supplied false documents to the ATO to support his claims.

Jotham Lian (composite of two articles)
29 January and 4th February 2019
accountantsdaily.com.au