Western Australia business owner, Sung Jae Cho has been sentenced in the District Court of Western Australia to five years and four months’ in prison for fraudulently obtaining more than $890,000 through illegal phoenix activity. He was also ordered to repay the money he stole.
An investigation by the ATO resulted in the prosecution of Mr Cho, including his conviction of 20 charges under the Criminal Code, including obtaining a financial advantage by deception between 2004 and 2007.
Between 1997 and 2009, Mr Cho operated a labour hire business through four different companies providing workers to engineering construction companies in and around Perth.
According to the ATO, his business displayed the hallmarks of illegal phoenix activity, including carrying on a business through one corporate entity which intentionally accumulated but did not repay debts; liquidating the business to avoid paying the debt; and continuing the business through a different corporate entity, which was still under his control.
Mr Cho also failed to report and remit the GST and Pay As You Go (PAYG) withholding while having sole and full control of the relevant entities.
“This kind of behaviour has an incredibly damaging impact on the Australian community through unpaid wages to employees, debts to other businesses, and unpaid taxes,” said ATO assistant commissioner Aislinn Walwyn.
“Companies like these are obtaining financial advantages over their competitors and robbing the Australian economy of revenue that could be spent on essential services.
“This is a strong reminder to those involved in illegal phoenix activity that if you engage in this behaviour you will get caught. We will continue to follow up phoenix operators despite their efforts to conceal their activities.”