A husband and wife serving home detention on charges of avoiding more than $200,000 in taxes had earlier been declared bankrupt, owing the Inland Revenue Department more than $750,000.

Carol Karl, 51, and Andrew Karl, 43, were found guilty by a jury in the Whangarei District Court in November last year and appeared for sentencing yesterday.

Carol Karl faced one charge of evading assessment or payment of income tax, one of evading assessment or payment of GST and another of evading payment of tax. The offences occurred between April 2006 and April 2015. Andrew Karl faced similar charges, relating to offending between April 2010 and April 2015.

Crown solicitor Mike Smith informed the court yesterday bankruptcy orders were filed in October 2014 and both were declared bankrupt by the High Court on December 15 that year. Carol Karl owed more than $470,000 in tax arrears while her husband owed more than $300,000, Mr Smith said.

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He said if the court was minded to impose a non-custodial sentence, community work should be ordered which would go some way towards them paying back to the New Zealand public in terms of tax evasion. Both were among five people who traded under the name Nga Uri o Tupoto which, according to the IRD, received just over $3.6 million in its bank account during the period they did not pay taxes.

Carol Karl's lawyer Sumudu Thode said home detention could be considered and submitted she had no ability to pay reparation as she had been bankrupted.

John Moroney, representing Andrew Karl, also called for home detention and said apart from the latest offending, his client had led a productive life. He may have been a bit naive in trusting the incorporation but he genuinely believed in his innocence, Mr Moroney submitted.

Judge Keith de Ridder said the Karls continue to hide behind the incorporation and not take responsibility for their actions. Despite their considerable intelligence, he said both embarked on a deliberate path to avoid paying tax and even made repeated attempts to stop their trial with spurious applications which had no merit. The judge said he was sceptical of their explanation that their actions benefited their hapu because taxation itself was designed to benefit communities.

Two others - Timothy Meredith and Thomas Joseph Brown - have already been sentenced. Meredith was sentenced in December to three-and-a-half-years in jail for evading more than $700,000 in taxes. A nine-month home detention sentence was imposed on Brown who pleaded guilty part-way through his trial in November.