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Jail for Property Developer, after $3.4m GST Fraud

by | Jan 29, 2019 | Property Taxation, Tax Planning

A luxury property developer who caused a loss of $3.4 million to the Commonwealth through GST fraud has been sentenced to six years’ jail after an ATO investigation.

Mr Ensor’s conviction came after an ATO investigation found he had structured his companies to fraudulently obtain GST credits and failed to report property sales to avoid paying GST, causing a loss to the Commonwealth of $3.4 million.

Failed to Report GST on Sales while claim GST to fund developments

Between 2008 and 2011, Mr Ensor lodged false BAS statements on behalf of nine companies of which he became the sole director, using the money he obtained to fund the purchase of luxury items including a marina at Lake Macquarie, a catamaran and a unit to live in.

The funds were also used to meet expenses incurred during the course of developing five beachfront luxury apartments in Manly.

Mr Ensor reported his companies’ expenditure was more than $24 million and claimed more than $2.2 million in GST refunds.

He also failed to report the sales of the Manly apartments on which he should have paid GST of more than $1.5 million.

Setup Pheonix companies to claim GST

In making his GST refund claims, Mr Ensor created false invoices that showed related companies provided project management services, and produced fraudulent invoices for the purchase of high-value excavators, trailers, trucks and catamarans.

ATO assistant commissioner Aislinn Walwyn said the conviction represented the agency’s stance against illegal phoenix behaviour and tax crimes.

Phoenix Property Developer

“This case exhibits classic illegal phoenix behaviour. Companies were deliberately liquidated to avoid paying creditors and taxes. New companies continued operating the same or a similar business with the same ownership,” Ms Walwyn said.

“Illegal phoenix activity is a serious threat to the integrity of the tax and superannuation systems and costs the community billions of dollars every year.

“As part of the multi-agency Phoenix Taskforce, the ATO is committed to taking strong action against illegal phoenix activity to protect all Australians.”


Need Help?

If you have any concerns over how to claim and report GST on any property developments, please contact our office for help.

See also:-

House & Land Development Tax Planning Opportunities

New Residential Developments – Purchaser Pay GST Direct to ATO

Property Development – Tax Issues to Consider

Draft Property Construction Website Guidance ATO

GST Margin Scheme – Simple Example

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