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2008 media releases

Inland Revenue warns against divulging personal details
8 February 2008

Inland Revenue warns taxpayers not to freely divulge their personal details after an Auckland serial fraudster was sentenced today to five and a half years imprisonment for tax fraud thought to total over $2 million.

Scott Fraser, who changed his name from Roderick Scott McRae in December 2005, ran a scheme designed to fraudulently obtain income tax refunds. 

From June 2005 to July 2006, Fraser, or an associate, convinced more than 300 people to divulge personal details, which were then used to create false claims for refunds. The refund was paid into a bank account belonging to either the taxpayer or, in some cases, an associate.  Fraser, or an associate, received up to 85 per cent of the refund, and the rest remained with the taxpayer.

Group Manager Assurance, Martin Scott, said Inland Revenue moved quickly to close down the scheme after it was detected by the department in June 2006.  Fraser was charged in October 2006 and placed in custody soon afterwards.

Most participants in the scheme did not understand they were involved in a fraud, said Mr Scott. The participants were told by Mr Fraser, or his associates, that the refunds were legitimate.

Mr Scott said that people should not divulge personal information unless there was a very good reason.

''The New Zealand taxation system relies on voluntary compliance. Taxpayers must take responsibility for their own affairs, or make sure their tax returns are prepared by reputable professionals," he said.

Mr Scott said that Inland Revenue had the resources and capabilities to detect and quickly halt illegal activity, and this scheme was quickly shut down after it was first detected.

''This was a particularly comprehensive and abusive fraud, and something we take very seriously.''

Participants in the scheme have been contacted and most have paid, or are paying back, the money to Inland Revenue.  All participants have been given a personal contact at Inland Revenue and offered a debt repayment option.

While the overall amount of lost revenue exceeds $2 million, Fraser was charged with defrauding the department of a representative $742,518 through the claiming of false refunds on behalf of the participants in the scheme.

He had earlier pleaded guilty before Judge Harvey  in the Manukau District Court to 249 charges of income tax fraud and was sentenced on those charges today.  (The five and a half years' sentence included a two-thirds non-parole period.)  Fraser is yet to enter a plea on another 17 tax-related charges.

Fraser has two previous convictions (under the name McRae) for tax fraud. In 2001 he was sentenced to four years imprisonment on 18 charges of fraud, and in November 2004 he was sentenced to another two years imprisonment. He was released from prison into home detention in June 2005.

Ends

For more information:

Adrienne Perry
Senior Media Advisor
(04) 890 1698
(029) 890 1698

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Corporate Affairs
Inland Revenue

To make a media query:
Phone 04 890 1698 or email mediaqueries@ird.govt.nz
Please note, the email address is only for enquiries from the news media. It is monitored during normal business hours 8am - 5pm Monday to Friday.

P O Box 2198
Wellington 6140
New Zealand


Date published: 08 Feb 2008

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