Home detention for tax evasion

A Mt Maunganui man who tried to get a $2.375 million GST refund for a business deal he never had the money to complete has been sentenced to 12 months home detention.

Michael Philip Graham Yorke was sentenced in the Tauranga District Court at the end of last month after admitting a charge of tax evasion. He was also sentenced to 200 hours community service.

Inland Revenue investigations assurance manager Jonathan Matthews says this is a case of a very calculated attempt to try to get a substantial sum of taxpayer money based on a deal that was "completely bogus".

"The sentence shows how seriously the courts view this sort of offending and the prosecution taken against Mr Yorke shows Inland Revenue can and will detect fraudulent claims and hold people to account."

Yorke registered for GST in early 2006 listing his taxable activity as internet website design. A month later he sent in a GST return, which claimed inputs of $21.375 million resulting in a GST refund position of $2.375 million.

The refund was not released and an investigation was started.

Yorke was asked for documents supporting his claim and provided a tax invoice for the purchase of 10,000 web licences at a cost of $2,250 each from a recently formed Hamilton based company.

Inquiries with the company confirmed a contract, but payment was never made.

When Inland Revenue investigators expressed concern about Yorke being able to fund the deal, he claimed that a part payment of $18 million had already been made in cash.

Inquiries showed that was false and that he was never capable of making the $21.375 million payment detailed in his GST return.

It was also established Yorke approached his bank within a week of submitting the claim and made arrangements for an intended deposit of $2.35 million to be disbursed to other accounts, family and friends.

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