Accountant 'abused clients' trust'
A Christchurch accountant who advertised himself as running "the best little accountancy firm on the planet" has pleaded guilty to 76 theft and tax charges totalling more than $630,000.
Grant Perry McGowan, 51, was extradited from Australia to face the charges in the Christchurch District Court today.
Court taker Sarah Taylor took 35 minutes to read out details of the 76 charges in the indictment and was thanked by Judge Jane Farish and defence counsel Paul McMenamin.
Judge Farish said she had planned to remand McGowan in custody for his sentencing on January 30, but after comments from McMenamin and Crown prosecutor Phil Shamy, she decided to grant bail.
Shamy confirmed that McGowan had kept to his bail conditions while he had been on remand since his extradition.
He had been reporting weekly to the police, who held his passport, and he was required to live at a particular address.
Farish increased his reporting to twice a week and asked for a reparation report before sentencing and a pre-sentence report that will cover McGowan's suitability for home detention.
McMenamin said he had not "encouraged any false hopes" that McGowan might get home detention.
McGowan ran an accountancy practice in Christchurch called McGowans - "the best little accountancy firm on the planet".
He persuaded eight clients to take part in an unlawful scheme to "buy tax losses". The scheme involved him putting in invoices to falsely state that he had provided the clients with professional services.
After money had changed hands, the tax benefits obtained by the clients were more than their cash outlay. They ended up paying $158,375 and had underpaid their income tax by $239,000.
McGowan faced 19 charges relating to that offending, 22 charges of theft by a person in a special relationship and 35 charges that he knowingly applied PAYE tax deductions for purposes other than payment to Inland Revenue.
McGowan was a chartered accountant and a member of the New Zealand Institute of Chartered Accountant until May 2004, when he was struck off for professional misconduct, conduct unbecoming an accountant, negligence or incompetence, and significant breaches of the code of ethics.
Details provided by Shamy and Inland Revenue senior solicitor Paul Saunders indicate that the total losses involved in the offending are $636,115.
The summary of facts states: "The defendant's offending shows a deliberate decision by him to abuse the trust placed in him as an accountant and a tax agent by both his clients and the commissioner of Inland Revenue."