Inland Revenue has welcomed the prison sentences handed down to two Wellington tax advisors today involved in a multi-million dollar tax fraud. The sentences are the longest ever handed down in a New Zealand tax case.
Barrie James Skinner and David Ingram Rowley were sentenced in the Wellington High Court today after earlier being found guilty of filing fraudulent tax returns on behalf of their clients, in which they claimed fictitious expenses in excess of $9 million. The pair was also found guilty of attempting to pervert the course of justice.
Skinner received a sentence of eight and half years in prison and Rowley received eight years.
Patrick Goggin, Group Manager Assurance, said tax agents and advisors have a duty to ensure their clients' tax affairs are correctly reported to Inland Revenue.
"Rowley and Skinner not only breached their clients' trust by acting illegally but also that of Inland Revenue which trusted them to act with honesty and uphold the integrity of the tax system."
"The pair filed false income tax and GST returns on behalf of numerous clients through their tax agency, Tax Planning Services Limited (TPSL), for goods and services that were never provided. Under this arrangement, the client paid an invoice for these claims but then received the bulk of the payment back. This not only reduced the client's tax liability but TPSL retained the difference."
Mr Goggin said Rowley and Skinner attempted to pervert the course of justice by asking clients to tell Inland Revenue that the false invoices, which had originally been treated as subcontracting services, were for payments made on apartments and car parks. They also supplied clients with false documents to try and substantiate these claims.
"Advisors need to take care when advising clients who are under investigation and Skinner and Rowley crossed the line by coaching their clients to lie to Inland Revenue.
"Rowley and Skinner personally benefited by around $2 million from fraudulent schemes. An analysis of Skinner's personal expenses showed that he spent his gains on travel and an extravagant lifestyle, while Rowley used his share to pay off his mortgage," he said.
"Inland Revenue as part of its compliance programme is using increasingly sophisticated methods to detect tax evasion and fraud schemes, and will take action against serious non-compliance.
"Despite their complex and concerted efforts to cheat the tax system, Rowley and Skinner failed to stay ahead of the law. As a result, they ended up in court, and this sentence shows that Inland Revenue and the courts view such offending very seriously," Mr Goggin said.