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Prison term for tax fraud sends strong message

Inland Revenue
Te Tari Taake


2 December 2003

Prison term for tax fraud sends strong message

Some 800 taxpayers from Auckland, Tauranga, Whakatane, Rotorua, Hamilton, Foxton, Shannon, Levin and Palmerston North were caught up in massive tax fraud – and one of Inland Revenue’s biggest investigations of its type.

Inland Revenue said the five-year prison term handed down today to the fraudster confirms how seriously the courts view attempts to defraud the tax system.

Loraine (subs: correct) Elliott, of Inland Revenue, said the tax defrauded should have gone into New Zealand’s revenue base to fund government spending, including community services, hospitals and schools.

“Tax fraud is not a victimless crime – it is short-changing each and every taxpayer in New Zealand,” said Ms Elliott, Auckland Service Centre Manage, Manukau.

Manukau Inland Revenue staff spent two and a half years investigating the $1.8million fraud and had the defendant extradited from Sydney.

Ms Elliott said the fraud came to light when sharp-eyed investigators in Tauranga noticed large numbers of people were filing returns for previous years, claiming rebates for child care and donations.

As it became clear that the fraud had caught up people across the North Island – the investigation team grew. A dozen investigators, working in three teams, completed the case, which culminated in 376 tax charges being laid.

Peter Charles Hirawani , 52, was convicted in the Manukau District Court last month on 369 charges of fraudulently claiming tax rebates. (Seven charges were dropped after the trial). He was sentenced today to five years on each charge to be served concurrently.

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Hirawani had claimed fraudulent rebates on behalf of clients for donations made to charity, childcare costs and fees paid to him. Hirawani then took a 15% fee.

In this particular case, not only had Mr Hirawani defrauded Inland Revenue, he had breached the trust of taxpayers whose tax returns he prepared.

“The tax system relies on self-reporting and honesty. Today’s sentencing sends a strong message that there are serious consequences for those who attempt tax fraud.

“….and it’s not a case of if they get caught … it’s when they are caught,” said Ms Elliott.

Ms Elliott said the case was significant for Inland Revenue. “It’s the biggest rebate fraud case we’ve had, it involved many individual taxpayers, and there were 100 witnesses called. It’s a major step for us to extradite someone, and our computer forensic unit helped to produce crucial evidence.”

“The professionalism, commitment, persistence and hard work of our staff played a vital role,” said Ms Elliott. “They were superb.”

She said identifying and investigating tax fraud was a high priority for Inland Revenue investigators.

“We owe it to all those honest taxpayers who do pay their fair share of tax to make sure that people who attempt to rip off the system are brought to account.”

Inland Revenue is always willing to talk to people about their tax affairs, said Ms Elliott. Individuals or businesses who want to put their tax affairs right have the opportunity to make a voluntary disclosure, and should contact their local Inland Revenue office.


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