2006 media releases

Owner of chain of rest homes get 21-month prison term for million dollar tax evasion
21 May 2007

A company director was today sentenced to 21 months of imprisonment for failing to account for nearly $1.3 million of PAYE deductions for his eight rest home companies.

Keran Unka, aged 54, of Raumati South, had earlier pleaded guilty to eight representative charges of aiding and abetting his companies in the misappropriation of trust money. He was given leave to apply for home detention and the sentence start date was deferred for two months by Judge Davidson.

Mr Unka was the sole director of the Village Care group of companies. The main company, Village Care, provided management services to seven companies operating a total of 10 rest homes in Blenheim, Invercargill, Marlborough, New Plymouth, Palmerston North, Wanganui and the Wairarapa.

The Wellington District Court was told this morning that $1,278,008 in PAYE deductions from about 300 staff members were not passed on to Inland Revenue between May 2001 and May 2003.  Of this amount $913,000 remains unaccounted for.  All eight companies have now been liquidated and struck off the Companies Office Register.

Inland Revenue investigators found that Mr Unka instructed office staff which creditors to pay.  On most occasions PAYE deductions were not approved.  On the few occasions when they were, the payments were usually made late.

Inland Revenue manager Colin Hutchins said the prison sentence is a lesson for those taxpayers who try to juggle their debts using tax money. 

"Inland Revenue's not a bank," said Mr Hutchins.  "PAYE tax is money taken from staff on trust to be paid over to Inland Revenue.

"No employer has the right to take staff PAYE and use it for any other purpose, including paying other creditors."

Mr Hutchins said that any business that was struggling should seek professional help straight away.

Businesses who dodge their tax obligations make it very hard for honest businesses to compete, said Mr Hutchins.

"We owe it to the vast majority of honest businesses out there to take strong action, and the court today has shown it views this seriously."

Contact:

Alison Welch

029 890 1930

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• Family assistance payments to be made early
• Inland Revenue welcomes tough sentence on tax fraudster
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• Family assistance payments to be made early
• Inland Revenue welcomes Govt3 award wins
• PAYE Subsidy available for employers
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• Prison for Tauranga contractor on tax fraud charges
• Inland Revenue confirms stand on depreciation
• Family Assistance payments to be made early
• Tax discount for new businesses
• Tauranga contractor jailed for tax offences
• Inland Revenue revises rules on shortfall penalty application
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• Inland Revenue website wins People's Choice award
• Tax due date coming up on 7 February
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more media releases ›

Corporate Affairs
Inland Revenue

To make a media query:
Phone 04 890 1698 or email mediaqueries@ird.govt.nz
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New Zealand

Date published: 21 May 2007

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