Fraudulent GST claims leads to jail for company director

MEDIA RELEASE

12 September 2013

Fraudulent GST claims leads to jail for company director

An Auckland-based company director has been sentenced to prison for six months in the Auckland District Court today after he was earlier found guilty on two charges of aiding and abetting two companies claim tax refunds to which they were not entitled.

Group Manager Investigations and Assurance, Patrick Goggin, said that Varunesh Venkat Naidu deliberately used Premium Developments Limited and GSMarena Limited to file false GST refunds in 2010 and 2011.

“This is a case of someone deliberately misusing companies to illegally claim taxpayer money.

“Naidu used Premium Developments to seek a GST refund of $206,666 in 2010 claiming that the company had paid a deposit of $180,000 and a balance of $1,680,000 for an Auckland property to a vendor who was based in China.

“We asked Naidu to verify this claim, and he not only changed his story to say that he had only paid the deposit, he then tried to withdraw the false return to try and stall our investigation. Meanwhile he attempted to sell the property without the vendor’s permission.”

Mr Goggin said that Naidu used the same tactics with GSMarena Limited and he used that company to file false GST returns in 2010 and 2011.

“Our audit showed that this company claimed expenses of $579,757 however an examination of its bank statements showed that there was never any such level of business activity.

"As with Premium, he kept changing his story as to why he could not produce the necessary documentation to support these refund claims."

As a result of the offending, the loss to Inland Revenue was just over $65,000, much of which was used for personal expenses.

"Naidu’s actions were a deliberate attempt to claim money to which he was not entitled simply to. He was fully aware of the rules and that his actions were illegal. He was funding his lifestyle by making false GST refund claims and thereby cheating taxpayers by his actions. The outcome is that he has ended up in court,” Mr Goggin said.

ENDS

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