Housing construction couple jailed for $800k tax evasion after splashing out on jewellery, beauty salon visits

Inland Revenue said a judge found the couple spent a significant amount on jewellery, high-end clothing stores, and beauty salon visits. Photo / Kenny Rodger

Inland Revenue says an Auckland couple have been sent to prison after spending up on jewellery and beauty salon visits instead of paying tax.

Mohammed Naseeb and Rehana Ali were sentenced in the Manukau District Court this week on multiple charges of personal income tax and GST evasion.

Inland Revenue said Naseeb and Ali were also accused of income tax and GST evasion and failures to account for PAYE for their company, Supreme Constructions Civil & Drainage Works Company Ltd.

“Judge Andree Wiltens did not accept that there was no personal gain to Naseeb and Ali,” Inland Revenue said in a press release.

“There was significant spending in their bank accounts on things like jewellery, high-end clothing stores, beauty salon visits ... at the expense of the NZ taxpayer.”

The IRD said Naseeb and Ali were found guilty after a judge-alone trial on jointly committing all 69 tax-related offences for which they were charged.

The IRD said the offending happened between 2010 and 2015.

The tax agency said the overall evasion of income tax and GST amounted to about $750,000, with a further $80,000 unaccounted for PAYE.

Inland Revenue said after some PAYE payments were made, the total loss was about $800,000.

“The judge described it as very deliberate offending in which business income was under-reported for the pair, and also within Supreme when it was later registered, through them filing false returns.”

Naseeb and Ali were each sentenced to three years’ prison.

A PwC liquidators’ report said the company stopped trading in 2015 due to “the director’s poor health and the inability to realise a major debtor”.

In 2016, the IRD claimed $126,819.72 in unpaid GST and payroll tax.

In a final report in December 2020, the PwC liquidators said the director provided only sparse records and the company owed money to Carter Holt Harvey.

It was removed from the Companies Register soon after.