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$1m in GST fraud lands director in jail

$1m in GST fraud lands director in jail

A Victorian director has been sentenced to four years and two months in jail for more than $1 million in fraudulent GST refund claims despite the company having no commercial business activity.

Tax&Compliance Jotham Lian 10 October 2018
— 1 minute read

The County Court of Victorian laid down the sentence to Jeffrey Harrison yesterday, 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. 

“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.”

Last week, a New Zealand resident was sentenced to five years and 10 months in jail for fraudulently claiming GST refunds as a director of a Brisbane-based cattle business.

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$1m in GST fraud lands director in jail
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