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Perth man jailed, ordered to repay $110k in fraudulent GST refunds

Regulation

Many of the thousands being pursued for bogus GST claims will be in debt to the ATO for years, police warn.

By Philip King 9 minute read

A Perth man has been sentenced to two years’ jail for fraudulently obtaining almost $110,000 in GST refunds and has been ordered to repay the money.

Perth District Court found Justin McCormick had reregistered an ABN in February last year he had previously used from 2009–15 and began lodging bogus BAS and claiming GST on purchases that were never made.

He got a total of $109,278 in fraudulent GST refunds from two original and three revised BASs but stopped filing after the ATO began auditing the claims.

The ATO referred him for prosecution and Mr McCormick was convicted of five offences of dishonestly obtaining a financial advantage by deception.

GST fraud became a widespread problem in 2020 after social media website TikTok revealed how to set up an ABN and lodge a fake GST refund claim.

In response, the ATO set up Operation Protego, which has taken action against 56,000 people over alleged GST fraud and raised about $700 million in liabilities including $300 million in penalties.

It said in conjunction with the Serious Financial Crime Taskforce, more than 100 suspected perpetrators had been arrested including members of outlaw motorcycle gangs, organised criminal organisations and youth crime gangs. More than 10 people had already been convicted for involvement in the activity.

However, the fraud is believed to have cost the taxpayer at least $1.6 billion and the ATO has been widely criticised for failing to act sooner on alerts about the scam.

Serious Financial Crime Taskforce Chief John Ford repeated a warning that it was taking GST fraud seriously.

“We’ve urged offenders to come forward to the ATO or face severe consequences including imprisonment,” he said.

“We are escalating our efforts to enforce repayment of this fraud. For those people who did receive fraudulent payments, this debt will remain against their account and interest will continue to apply.

“Some of these fraudsters can expect to be in debt to the ATO for many years to come and any refunds will be offset immediately to repay the debt.”

“Our message is clear, if you don’t run a legitimate business, you do not need an ABN and you cannot claim GST refunds.”

Mr McCormick will be released after 12 months on a $1,000 good behaviour bond for 18 months. He was ordered to repay the amounts fraudulently obtained.

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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