Omitted income lands former tax agent in trouble
A former tax agent who made false statements in a business activity statement (BAS) and tax return has been sentenced to 20 months imprisonment. He was released immediately on entering into a $10,000 recognisance to be of good behaviour for 2 years.
Mr Ilias Temblalexis was a registered tax agent practicing as a sole trader under the name H&I Financial. He had more than 2,500 clients.
When we audited the business in 2018, we found Mr Temblalexis had drastically understated his income and GST on sales.
Our audit found the business’s 2017 tax return understated his income by $386,973, resulting in a tax shortfall of $194,603.79.
We also discovered Mr Temblalexis only began reporting GST on his BAS from 1 July 2017, even though his business income had exceeded the reporting threshold a year earlier.
Further investigation found one of the BAS he’d lodged understated the amount of GST on sales by $71,666.
Shadow economy activities like these are not victimless crimes. Not reporting or under-reporting income has broader impacts on our community, by reducing funds for essential services such as health, education and transport. It also makes it harder for honest businesses when others deliberately do the wrong thing to gain an unfair advantage.
In December 2019, the Tax Practitioners Board deregistered Mr Temblalexis as a tax agent for breaching the Tax Agent Service Act 2009.
Restaurateur served with jail term
A McLaren Vale restaurateur has been sentenced to 5 years and 3 months imprisonment after being found guilty of fraudulently obtaining $613,262 in GST refunds and attempting to obtain a further $210,333 that was stopped by the ATO.
Between September 2016 and November 2017, Mr Brad Redman submitted 19 false business activity statements (BAS), which considerably overstated the total sales and acquisitions of The Artel, the restaurant and gift shop business that he operated with his wife.
Several documents provided by Mr Redman throughout the audit contained inconsistencies, including:
- a sales summary from a point-of-sale (POS) system that was created in Microsoft Word
- a POS report claiming to cover the dates of 1 June to 31 June, despite there only being 30 days in June.
During our audit Mr Redman also supplied a forged medical document advising his wife was receiving treatment for cancer. We later checked with the doctor listed on the document, who confirmed she didn’t write the letter and wasn’t treating anyone by that name.
In sentencing, the magistrate described Mr Redman’s offending as persistent and deliberate, and that his false claims about his wife’s health were despicable. Mr Redman was sentenced to 5 years, 3 months and 2 days imprisonment, with a non-parole period of 3 years. He has also been ordered to pay $599,122 in reparations.
Shadow economy activities like evading tax obligations and claiming more than what you’re entitled to are not victimless crimes. They make it harder for honest businesses to compete and impact on our community by reducing funds for essential services such as health, education, transport and infrastructure.
5 years jail for serial GST fraudster
A Queensland woman has been sentenced to 5 years imprisonment, with a non-parole period of 20 months, for attempting to fraudulently obtain more than $650,000 in GST refunds, as well as other offences.
Ms Amanda Burman used ABNs that weren’t linked to active businesses to submit a series of false claims for GST input tax credits.
While some of Ms Burman’s earlier claims were paid, ATO audits found Ms Burman could supply no evidence to prove she was running a business. As a result, we advised Ms Burman that her claims were disallowed, and that her GST registration was cancelled.
Despite this Ms Burman repeatedly reactivated her GST registration and continued to make a series of fictitious claims. On each occasion, our checks confirmed Ms Burman couldn't provide any supporting documentation that she was actually running a business, and each time her claim was disallowed.
In total, Ms Burman obtained a financial benefit of over $150,000 and attempted to claim a further $500,000.
Evading tax obligations, or trying to get more than you’re entitled to, is a crime.
When you claim a refund, you’re not entitled to, you’re stealing from the community and disadvantaging everyone who does the right thing. It’s not fair and it’s not ok.
Property owner digs himself into a hole
South Australian man David Csongrady has received a criminal conviction and been fined $1,500, with orders to pay $699.30 in reparation, after providing false documents to an ATO auditor about deductions for his rental property.
We started an audit into Mr Csongrady’s 2018 tax return after noticing deductions for gardening repairs and maintenance for his rental property were unusually high. When we asked him to supply details about the expenses, Mr Csongrady provided us with photos of some tax invoices relating to hire of a skip bin and the removal of some dead trees.
But when we contacted the business that provided these services to check, we found some discrepancies.
The original tax invoice showed Mr Csongrady hired the skip for $210, but the record he supplied to us showed $1,090. And an additional $1,000 had also been added to the invoice for tree removal.
Following an investigation, Mr Csongrady was charged with 2 counts of incorrectly keeping records with the intention of deceiving or misleading a Commonwealth public official.
Receiving a criminal conviction is serious. It can have a significant impact on your reputation, career prospects and ability to travel overseas, as well as make it harder to borrow money or obtain insurance. It’s not something you can just sweep under the carpet. We know and trust that most people do the right thing. But when we see attempts to cheat the system, we take firm action.
False claims land swimming teacher in hot water
A former swimming teacher has been sentenced to 3 years jail for obtaining and attempting to obtain more than $250,000 in fraudulent GST refunds.
Ms Sasha Cordes lodged several original and amended business activity statements for her swim school business. In each case, she knowingly overstated the purchase amounts to obtain a financial advantage.
In total, $97,114 worth of fraudulent GST refunds were paid into her back account. She also tried to obtain an extra $181,947, but we stopped these refunds.
Ms Cordes will be released from jail after 15 months, on entering into a $1,000 recognisance on the requirement that she be of good behaviour for 2 years. She was also ordered to repay the full $97,114.
In sentencing, His Honour noted that the offending involved both deception and dishonesty and had been committed over an extended period.
As this case highlights, people who deliberately cheat the tax system will be caught and held to account.
You can
- phone 1800 060 062 to anonymously report tax evasion and shadow economy behaviour to us
- read about more recent Tax crime prosecution case studies.