Jail time for Tauranga mum guilty of elaborate tax fraud

A Tauranga mum faces jail time after committing $3M-plus in tax fraud. Photo/file

A Tauranga mum who created an elaborate scheme to falsely claim nearly $3 million in tax refunds and credits faces three years and seven months behind bars.

Karina Charmaine Knedler, 31, was sentenced in Tauranga District Court on 19 charges that included using a document with intent to obtain a pecuniary advantage, obtaining by deception and using forged documents.

The charges mostly related to false GST refund claims and forged documents for several fictitious businesses that never actually traded.

Judge Paul Mabey QC sentenced Knedler to three years and four months' jail on 18 of the charges and an extra three months for making false Working for Families tax credits claims.

Judge Mabey issued a starting point of five years' jail but allowed a 10 per cent reduction for character and lack of previous convictions and a further 25 per cent reduction for an early guilty plea.

A summary of facts revealed Knedler received $1.1m in fraudulent GST refunds after attempting to falsely claim $2.7m over a seven-year period.

Knedler had paid back some of the $1.1m, leaving an outstanding amount of just over $550,000.

Despite the Inland Revenue Department's audit and investigation, the offending continued unchecked and Knedler committed further offences to repay her previous offending.

Once Knedler became aware the IRD would prosecute, she escalated further offending through three new companies.

Knedler used fraudulent refunds for travel, lifestyle and living expenses and to purchase, renovate and improve both her property and businesses and presented a significant and ongoing risk to the revenue.

Inland Revenue group manager of investigations and advice Patrick Goggin said Knedler created an extremely complex scheme to rip off taxpayers.

He said Knedler was "quite relentless in her pursuit of money to which she was not entitled".

"Even when returns were being questioned, she produced numerous forged documents and conflicting explanations to back what became an increasingly elaborate web of deceit."

Mr Goggin said Knedler began a series of new fraudulent offending relating to other fictitious companies set up using different personal identities despite being investigated.

"This defendant's behaviour clearly showed brazen disregard for the tax system. She thought it was fine to repeatedly try to rip off millions in taxpayers' money that goes towards funding vital social services."

He confirmed Knedler used the money she obtained to fund overseas travel, construction of a residential property and costs associated with setting up her business activities, among other things.

"In short, she showed utter contempt for honest New Zealanders who do the right thing and pay their fair share of tax."

Inland Revenue would be exploring every available action to recover the money Knedler had stolen, Mr Goggin said.