Luke Daniel Rivers initially denied the charges but then changed his mind. Photo / Dean Purcell
A crooked accountant conjured up employees and used a change of name to run a racket including the country’s biggest known wage-subsidy scam.
Luke Daniel Rivers later claimed financial stress and a culturally-derived need to project success had influenced his offending.
All known wage-subsidy frauds paled in comparison with Rivers’ $1.6 million scheme, Auckland District Court heard today.
But instead of spending the more than $900,000 he fraudulently acquired, he siphoned much of it off to Singapore bank accounts opened with a fake passport.
Born Mai Qu, Rivers moved to New Zealand from China in 2001 as a teenager.
He spent a term at a local grammar school but couldn’t afford the fees, so he went to work, then studied and became an accountant.
He changed his name by statutory declaration in June 2004, believing an English-sounding name would enhance his career prospects.
In July 2006, he got a new Inland Revenue Department (IRD) number under the name of Luke Rivers.
However, he did not tell the tax department he still held another tax number under his birth name.
Prosecutor Fiona Culliney said the offending Rivers was charged with started in 2011, when he evaded child support by filing multiple tax returns misrepresenting his income.
But when the Covid-19 pandemic presented a new opportunity, the scale of his offending escalated.
As the Government rolled out wage subsidies and small-business support schemes, Rivers cooked up an elaborate con.
He pocketed about $906,000 and attempted to swindle a further $724,105.60.
The fantasy world of his fraud scheme included the names of three Indian “employees” who had never been in New Zealand.
He made 28 applications on behalf of eight companies he controlled, with a dozen of those applications fraudulent.
In the small-business cashflow scheme he acquired about $29,000 and made failed applications for a further $41,600.
The court heard Rivers was the sole director and shareholder of Your Payroll Limited, Your Refund Limited, Accounting 4 Me Limited and Save On Mortgage Limited.
In multiple wage-subsidy applications he named himself as a full-time employee.
Rivers was charged in June 2023 and initially denied the allegations.
By October that year, it seemed a trial lasting four or five weeks would happen.
But in April this year, Rivers admitted 29 charges.
Culliney said Rivers’ offending was prolonged and involved the abuse of his position as a chartered accountant.
“On that basis, [the chances of] a discount for character, if any’s available, must be very slim.”
The court heard Rivers cited his Chinese culture and “expectations on him to be financially successful” as influencing the offending.
“He’s well-educated and a successful businessman,” Culliney said.
“This is a particularly sophisticated and deliberate scheme of fraud. It’s opportunistic in the sense that the country was in crisis, but it wasn’t a situation where it was easy enough to dip into client funds.”
In November 2020, Rivers opened an Oversea-Chinese Banking Corporation (OCBC) account in Singapore and sent $100,000 to it.
In June 2021, he opened an account with Standard Chartered bank under a Chinese name.
In total, $696,243.50 was sent to that account.
In December 2020, he sent $250,000 to the OCBC account on the same day he received that money from the Government.
Defence counsel Baden Meyer said Rivers was not a demonstrative man, but he was remorseful.
The defendant had already repaid $1 million.
“The payment of reparation …. is a practical demonstration of his remorse," Meyer said.
The prosecution said seven years’ jail should be the starting point, and the defence said six years.
Judge Kathryn Maxwell said the amount of money in the fraud was an aggravating factor.
She said Rivers’ use of two IRD numbers allowed him to misrepresent his income for seven years.
He forged documents to get three IRD numbers for the Indian people and also made false employment returns.
In some instances, Rivers used real people’s names and details to give the wage-subsidy applications a veneer of legitimacy.
Rivers abused subsidies which were established to support businesses in need at a time of high stress, Judge Maxwell said.
“It is, more broadly, fraud against taxpayers as a whole.”
Rivers received a 10% discount for the reparations he made and a 5% discount for his guilty pleas.
He was sentenced to five years and 11 months’ imprisonment.
Judge Maxwell told him: “You did not take what you needed. There was a smorgasbord of dishonesty and considerable personal gain.”
John Weekes is a business journalist mostly covering aviation and court. He has previously covered consumer affairs, crime, politics and court.