Five members of one family guilty of $2.3 million tax swindle

The family operated 21 restaurants in a number of cities and towns across New Zealand. Photo / 123rf

Five members of one family have been sent to prison and home detention after a $2.3 million tax evasion case brought by Inland Revenue.

The five – Boonrouen Thongskul, Sirirat Kampeng, Anchalee Minwong, Chanaratt Thongskul and Anuchit Tongskul – plead guilty five weeks into a trial expected to last ten weeks. They were part of a family group of eleven who initially faced charges they'd been part of co-ordinated tax evasion effort over a seven-year period.

They've also been ordered to pay more than $2.2 million in reparations by the High Court in Wellington.

Inland Revenue spokesperson Richard Philp said the trial ended early when the five siblings entered guilty pleas.

"Once they'd heard much of the Crown evidence against them, these five entered guilty pleas in relation to the GST and income tax returns of the businesses for which they were responsible, and their own income tax return," he said.

"By their guilty pleas the brothers and sisters acknowledged they knew their returns were false and were a deliberate ploy to evade tax. Cash sales were deliberately suppressed to pay less tax.

"An aggravating feature of the offending for Chanaratt Thongskul and Anuchit Tongskul was that their declared income was low enough to qualify for Working for Families Tax Credits in some of the years charged.

"This family operated 21 restaurants in a number of cities and towns across New Zealand, most trading as 'Thai House Express'. During the trial, IR maintained the family operated the businesses in the same format and style akin to a franchise operation.

"The case followed an extensive investigation into the family group with searches of private properties disclosing business records, luxury goods and cash in some instances.

"The general allegation was that the family distributed the cash amongst themselves, as part of a deliberate practice of not reporting or recording cash sales and diverting the cash to private use.

"This is not trivial tax evasion. At one point in the trial the cash deposited in personal bank accounts was said to be more than $9 million. For these five defendants the sum is more than $5.2 million.

"IR's prosecution action was a success with the five defendants entering guilty pleas to charges of filing 366 false income tax, GST and personal tax returns evasion relating to their own tax affairs and those of their 11 companies."

At the High Court in Wellington on Wednesday Chanaratt Thongskul was sentenced to two years and eight months in prison and ordered to pay $900,000 in reparation; Sirirat Kampeng will serve 12 months home detention and pay $600,000 in reparation; Anchalee Minwong was sentenced to 10 months home detention with $400,000 in reparations; And Anuchit Tongskul got nine months home detention and must pay $300,000 in reparations.

Boonruen Thongskul was convicted and discharged with $5,000 in reparation to pay.

"While most people are honest and pay tax on all their income, those who intentionally avoid paying tax or claim money they aren't entitled to, are robbing honest people of services they might have had.

"That's why we help people do the right thing and act when people deliberately try to avoid paying tax."