Home, wife and reputation lost after fraud
An accountant has been jailed for stealing from his trust account, and convincing clients to join in an unlawful scheme to buy tax losses.
Christchurch District Court Judge Jane Farish said clients and the Inland Revenue Department lost $556,749 as a result of 51-year-old Grant Perry McGowan's activities.
It was said at his sentencing on 76 charges that he had taken an adversarial attitude to the IRD.
He is now beginning a three year, three month jail term, and he has lost his marriage and sold his house to put his share towards the reparations.
Judge Farish said: "You were a talented man, an effective negotiator, somebody who was able to think outside the square."
She noted he had helped the health board by setting up several medical assistance schemes in the Canterbury area.
But he also had an alcohol problem and had to seek counselling as the pressures upon him became immense.
"You have lost your home, your wife, your good name, your reputation. You have been living in very impoverished circumstances for a significant period," she said.
He had been living beyond his means when the offending took place from 2002 to 2007.
McGowan, who had advertised himself as running "the best little accountancy firm on the planet", was struck off as a chartered accountant and member of the New Zealand Institute of Chartered Accountants in May 2004 for professional misconduct, conduct unbecoming an accountant, negligence or incompetence, and significant breaches of the code of ethics.
When warrants were issued for his arrest in 2008, he was contacted in Australia where he was doing accountancy work and did not resist extradition.
Defence counsel Paul McMenamin said McGowan had been in a "chaotic and decayed state" when he first encountered him, but he had now taken responsibility "for the gravity of his conduct and the poorness of his discipline and lifestyle".
The offending showed his steady decline under pressure. He was genuinely remorseful. He realised that he had lost so much through his own fault and his own self-indulgence.
McMenamin urged a sentence of home detention for his client.
Crown prosecutor Phil Shamy said: "What is required here is a relatively substantial term of imprisonment."
McGowan had admitted charges of theft by a person in a special relationship, failing to pay PAYE to the tax department for his own operations, and 19 tax charges relating to the sales of tax losses.
Judge Farish said he had breached the trust of his clients and the IRD, for whom he was a tax agent.
She imposed a series of jail terms totalling three years, three months and told McGowan that because of the breach of trust and the amount of the losses to his clients and the community, a sentence of home detention would have been manifestly inadequate.