IRD hits hard at 'fraud as business'
The Inland Revenue Department has sent a warning to would-be fraudsters after a Wellington man who sold "fraud as a business" was sentenced to jail for 3 years.
A fictitious invoice scheme employed by Scott Crawford Anderson, 52, was described by Justice France, in the High Court in Wellington on Friday, as "blatantly dishonest" and an "affront to all who work".
Anderson was found to have cost Inland Revenue $220,000, though Justice France said he must have cost New Zealand millions of dollars through his dishonest practices, which started in the 1990s.
Wellington tax specialist and former Inland Revenue employee Brent John Gilchrist, 52, was sentenced to 10 months of home detention for his role in the scheme. Gilchrist's offending represented a $55,000 loss of tax.
Inland Revenue group tax counsel Graham Tubb welcomed the sentences, saying the pair had committed offences against the wider tax-paying community.
"Like many of these cases of fraud, they're driven by greed and ego . . . It really is fraud as a business and we won't shrink from taking action."
Justice France said he was puzzled as to why Gilchrist was involved in the scheme, which was of greater benefit to Anderson.
The pair had known each other for some time and were last month found guilty of providing false invoices for a Wellington-based accountant, whose name is suppressed. A bank account was opened in Vanuatu, which effectively laundered money.
Anderson received a harsher sentence for his offending related to an invoice-writing scheme through a company called Globe.net. False invoices of $875,000 had been created, which led to a $220,000 tax shortfall.
Justice France said this scheme was "more serious" and "blatantly dishonest". "This is an affront to all who work, normally for so much less than the defendants in this case." He was sceptical of submissions that Anderson was remorseful, suggesting he was remorseful for the position he found himself in. Anderson was a promoter of the Actonz investment scheme, which promised investors vast tax savings. The High Court ruled against Anderson in 2003 and in 2007 he was bankrupted, owing Inland Revenue nearly $14m.
In 2005, Gilchrist was found guilty of knowingly failing to provide information to Inland Revenue over a tax avoidance scheme.
- © Fairfax NZ News