A former restaurant and supermarket owner has been sentenced to home detention after illegally claiming nearly $380,000 he was not entitled to from Inland Revenue.
Zhenhong Fang was sentenced yesterday in the Wellington District Court after earlier being found guilty of 87 charges of dishonestly using a document for financial gain and filing false GST returns.
He was sentenced to 10 months' home detention, 250 hours' community work and ordered to pay reparation of $7500.
IRD group manager investigations and advice Patrick Goggin said Fang's offending involved the deliberate misuse of numerous companies to claim just over $379,000 of taxpayer money he was not entitled.
That amount remains outstanding.
"Inland Revenue's investigation began in early 2007 after these 16 companies filed 87 GST returns between April 2005 and September of the previous year.
What we found was that exaggerated amounts of income and expenditure had been included in the claims especially on the expenditure side."
Fang admitted to being in charge of the companies along with being responsible for filing their returns, Mr Goggin said.
"A search of Fang's home uncovered a large amount of business records and an analysis of the companies' bank records showed that only four of them had traded legitimately.
"The remaining 12 companies had recorded significant bank account activity but this was based on deposits and withdrawals being made from each other. No trading had taken place and it became clear that the figures in the returns were completely false."
Mr Goggin said that while the other four companies had traded legitimately, Inland Revenue found their expenses were overstated, and that they had therefore received refunds illegally.
"Our analysis also indicated that Fang was using the money to buttress those companies that were still operating businesses. It should be crystal clear that people running any type of business should never attempt to keep that business afloat by claiming false refunds."
Zhenhong Fang's companies:
* A-Mart Jiayi Group Hoding (crrct) Company Ltd;
* A-Mart Eden Restaurant Limited;
* Mr Chan's Suppermarket (crrct) Palmerston North Ltd;
* Super Bargain Ltd;
* A-Mart Jiayi Food Court Ltd;
* A-Mart Jiayi Warehouse Ltd;
* Asian Food Wholesale Centre Ltd;
* Chain Sun Trading (NZ) Ltd;
* Digitel Network Solutions Ltd;
* Global Trust & Investment (Auckland) Ltd;
* Link Cyber Ltd;
* New Overseas Trading (NZ) Ltd;
* Overseas Service Auckland Centre Ltd;
* Sunrise Global Trading (NZ) Ltd;
* TJD Realty (NZ) Ltd; and
* Wellington Food Wholesale Centre Ltd.