Serial tax cheat gets home detention, community work

Published: Mon 2 Sep 2013 04:11 PM
Serial tax cheat gets home detention, community work
2 September 2013
Serial tax cheat gets home detention, community work
The sentencing of a former restaurant and supermarket owner on a total of 87 charges in the Wellington District Court today is another warning that Inland Revenue is working hard to catch tax cheats.
Zhenhong Fang was sentenced to ten months home detention, 250 community work and ordered to reparations of $7500 after earlier being found guilty on 54 charges under the Crimes Act of dishonestly using a document for financial gain and 33 charges of aiding his businesses to file false GST returns under the Tax Administration Act.
Group Manager Investigations and Advice, Patrick Goggin, said that Fang’s offending involved the deliberate misuse of numerous companies to claim just over $379,000 of taxpayer money to which he was not entitled. This amount remains outstanding.
“Inland Revenue’s investigation began in early 2007 after these sixteen companies filed 87 GST returns between April 2005 and September of the previous year. What we found was that exaggerated amounts of income and expenditure had been included in the claims especially on the expenditure side.”
Mr Goggin said that Fang was interviewed as part of the investigation and he admitted to being in charge of the companies along with being responsible for filing their returns.”
“A search of Fang’s home uncovered a large amount of business records and an analysis of the companies’ bank records showed that only four of them had traded legitimately.
“The remaining twelve companies had recorded significant bank account activity but this was based on deposits and withdrawals being made from each other. No trading had taken place and it became clear that the figures in the returns were completely false.”
Mr Goggin said that while the other four companies had traded legitimately, Inland Revenue identified that their expenses were overstated, and that they had therefore received refunds illegally.
“Our analysis also indicated that Fang was using the money to buttress those companies that were still operating businesses. It should be crystal clear that people running any type of business should never attempt to keep that business afloat by claiming false refunds.
Inland Revenue has options available to businesses in financial trouble that do not involve breaking the law. We will continue with a zero tolerance approach to such matters.”

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