A woman who tried to claim almost $7 million in GST returns for a non-profit organisation did so out of a combination of business naivete, sense of entitlement, grandiosity and wishful thinking, the Wanganui District Court has heard.
Waimaria Theresa Whakarau, 35, was convicted of 12 counts of dishonestly using a document to obtain a pecuniary advantage after she attempted to claim $6.9 million from the Inland Revenue Department, a crime Judge David Cameron called an "insidious type of fraud, really a fraud against all the taxpayers in New Zealand".
On September 29, 2008, Whakarau registered a non-profit company, Kaos Promotional, for GST, backdated to commence on April 4, 2008.
Whakarau was named as the representative of the company, which also listed the names of four other people, her siblings.
Annual turnover for the company was expected to exceed $1.3 million.
On one GST return, claiming $10,956, when asked to provide documentation Whakarau instead provided a letter asking for more money, claiming expenses for $18,613, and provided details of purported expenditure and sales.
Also attached were receipts for cigarette papers, petrol, takeaways and women's magazines.
On another occasion, the supporting documentation sent with a claim for $2.7 million included a quote for 33 cabins and a handwritten list of expenses - which included the claim she had purchased a 747-400 aeroplane.
Between October 16, 2008, and November 4, 2009, Whakarau sought refunds totalling $6.9 million. Of that, she was paid $8860, which included money transferred into her child support arrears.
Whakarau was called in to meet Inland Revenue in November 2008 and was told that they did not consider she had carried out any taxable activity between April 2008 and November 2008 and that her returns were fraudulent.
Whakarau did not produce any evidence to the contrary.
At a second interview in December 2009, Whakarau was shown all of the GST returns filed until then and agreed that the signature was hers and that she had filed them. She did not provide any evidence to back up her claims that the business and taxable activity existed.
Her counsel, Richard Leith, said Whakarau had been in custody for the past two months for breaching bail. She was not happy about being in custody or being sentenced for something she wanted to challenge but he was unable to take the matter further, he said.
A psychological report concluded that Whakarau's offending had arisen primarily out of an apparent naivete about business processes, coupled with a sense of entitlement, grandiosity and some element of wishful thinking.
Mr Leith said Whakarau was not someone who had developed an elaborate scheme to defraud, rather she had been "quite bold" in seeking something she wrongfully felt entitled to.
She was a beneficiary at the time and was trying to get a business going.
IRD prosecutor Wendy Luxford said the department was mindful of her continual offending, which persisted after she was told she was not entitled to make the claims.
Judge Cameron said Whakarau had a criminal history spanning 1991-2009, with five previous convictions for obtaining by deception in 2009.
This was an escalation of that fraudulent offending, and her pre-sentence report showed she had no remorse, evident in that she continued to deny the offending. The only appropriate sentence was jail, Judge Cameron said.
Whakarau was sentenced to six months in prison and ordered to pay reparation of $8860.96 and solicitors' costs.