Press Release – Inland Revenue Department
Inland Revenue says that today’s sentencing in the Wellington High Court of Paul William O’Connor to three years and six months in prison for his part in an aggressive tax evasion scheme sends another clear message to those who break the law.
O’Connor was found guilty on a total of 14 charges of tax evasion on 26 July as part of the same case involving Scott Anderson and Brent Gilchrist. Anderson was subsequently jailed for his role in the scheme last month.
“This case involved very calculated and deliberate attempts to get substantial sums of taxpayer money based on transactions that were false. This was naked fraud and a sustained course of evasion activity by a successful businessman as the Judge said,” Group Manager Assurance, Patrick Goggin said.
“The sentence shows that courts view this sort of offending seriously and the prosecution taken against O’Connor shows that Inland Revenue will hold people to account if they break the law.”
Mr Goggin said that O’Connor willingly allowed his companies to be used to create fictitious expenses that were offset against their income streams.
“This activity included filing false tax returns, hiding assets, and the late filing of returns to allow his business to be repeatedly restructured to conceal the proceeds of fraud. The transactions were motivated by greed and were structured so that a very profitable business could pay little or no tax thereby cheating other taxpayers.”
Inland Revenue is working to recover the money that is outstanding.
Mr Goggin said that when someone is not paying their share they are taking money from essential public services like schools and hospitals.
“As the Judge said, society depends on honesty within the tax system, and O’Connor’s actions were an affront to those who pay their fair share. Our customers can be confident that Inland Revenue will detect those evading their obligations and those cheating on their taxes should be aware that we will take action when we detect deliberate non-compliance.”
Press release from IRD – July 26
Inland Revenue has welcomed the conviction of three businessmen in the Wellington High Court today involved in complicated and determined tax evasion schemes. Group Tax Counsel, Graham Tubb, said those involved used offshore bank accounts, false invoices and false deductions to evade tax and repeated restructurings of the principle business to protect and conceal the proceeds of the fraud.
Paul William O’Connor was found guilty on a total of 14 charges, out of 15, of tax evasion relating to filing of false tax returns and evading the assessment and payment of tax by his business entities.
Mr Tubb said O’Connor evaded $1.8 million of tax over a period of 13 years.
Scott Crawford Anderson was found guilty of two charges of aiding O’Connor to evade tax by providing fictitious invoices. Brent John Gilchrist was acquitted of two charges of aiding O’Connor to evade tax.
Gilchrist and Anderson were found guilty of 6 charges of aiding and abetting the fourth co-accused to evade tax through the provision of fictitious invoices.
A fourth co-accused (who presently has name suppression) had earlier pleaded guilty to 6 charges for his part in the offending.
“The transactions went well beyond sharp practice or clever accounting. The offenders were individually and collectively fraudulent and were designed to allow a very profitable business pay little or no tax, leaving the burden on other taxpayers,” said Mr Tubb.
“This case serves as a reminder that we have placed significant resources into identifying tax evasion arrangements and we take appropriate action when the rules are deliberately broken,” Mr Tubb said.