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Christchurch man jailed for GST fraud

A Christchurch man, who was previously self-employed, has today been jailed for nearly three years for filing 49 false GST returns.

Scott McCormick set up a number of companies here and in Australia which were supposed to import alcohol drinks to the New Zealand hospitality industry.

The pattern was the same for each of the three companies – APSM Enterprises, VE Holdings and Drink Red. McCormick prepared and filed 49 false GST returns covering the three companies starting in November 2013 through until March 2017.

Analysis of the bank accounts for APSM Enterprises and VE Holdings showed no evidence of income from sales and no evidence of business expenditure in the account. It was all cash withdrawals, transfers/payments to himself, his family members or associated entities.

Drink Red operated three bank accounts.  One showed limited evidence of business income and expenditure but nowhere near the levels recorded in the GST returns filed with Inland Revenue.   

The remaining two accounts showed no evidence of business expenditure and as with APSM Enterprises and VE Holdings all expenditure in the account consisted of cash withdrawals, personal expenditure, transfers/payments to the Defendant, his family members or associated entities.

$399,212.84 was paid in to APSM’s bank account and $219,931.37 into the bank account nominated by VE Holding. $149,363.78 was paid into the account of Drink Red that it was not entitled to.

McCormick was sentenced today in the Christchurch District Court to 2 years and 11 months in prison on the 49 charges he faced, with the judge saying “tax fraud like this involves a gross breach of trust”.

The total amount he claimed for the three companies was $768,507.99 and $501,488.09 has not been repaid.

Last updated: 03 Oct 2022
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