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Jail time for director after $1m GST fraud

Jail time for director after $1m GST fraud

Fraud director with handcuffs

A Victorian man was sentenced to four years and two months in jail for more than $1 million in fraudulent GST refund claims, and the Tax Office has since fired warning shots to the small business community about its compliance approach with dodgy deductions. 

The County Court of Victorian laid down the sentence to director Jeffrey Harrison on Tuesday, including an order to pay tax, interest and penalties of $884,496 to the ATO.

In 2015, ATO officers audited Mr Harrison’s company, Hey Man Transport Pty Ltd, and uncovered more than $1 million in fraudulent GST refund claims he made in BAS lodged between 2009 and 2015.

Over this period Mr Harrison lodged 74 BAS in which he fraudulently claimed $1,084,274 in GST refunds.

In order to legitimately accrue more than $1 million in GST refunds, Mr Harrison would have had to have spent a minimum of $11.9 million on goods or services needed to run his transport business.

Despite the company appearing to have no commercial business activity, Mr Harrison’s GST claims grew over time to $19,000 a month at their highest point in 2015. The court found these claims to be entirely fraudulent.

ATO Deputy Commissioner Will Day welcomed the sentence, cautioning against brazen fraud against the tax system.

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“This wasn’t an honest mistake by a small business owner trying to do the right thing – it was a calculated and deliberate attempt to commit fraud and steal money from taxpayers,” Mr Day said.

“Investigations by our auditors showed Mr Harrison was claiming very large GST refunds which did not reflect the actual operations of his business.

“We welcome the jail sentence handed down and the warning it sends to others considering engaging in similar behaviour: if you break the law we will hold you accountable, even if it means pursuing you in the courts.”

ATO on the hunt

This latest case follows the sentencing of a New Zealand resident – who had been living and operating two businesses in Queensland – to jail over an $800,000 fraud involving GST refunds on his BAS.

Anthony Lee, 65, was sentenced last week to five years and 10 months behind bars in the Brisbane District Court, in addition to being ordered to repay the money he claimed.

Mr Lee was found guilty of eight charges: five of defrauding the Commonwealth, two of providing forged documents and one of attempted fraud. The ATO again publicly grilled Mr Lee as a warning to other dodgy operators. 

“Contrary to popular belief, tax crime is not victimless: when you claim a refund you’re not entitled to, you are stealing from the whole community and disadvantaging Australians who do the right thing,” ATO assistant commissioner Peter Vujanic said following the judgement.

Jail time for director after $1m GST fraud
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