A house on the Whitianga Waterways , Coromandel, worth about $1million and a $550,000 Italian launch owned by Michael Holmes and Sharon Holmes. Photo / Belinda Feek
A house on the Whitianga Waterways , Coromandel, worth about $1million and a $550,000 Italian launch owned by Michael Holmes and Sharon Holmes. Photo / Belinda Feek
Couple who admitted cheating IRD out of nearly $1m in GST still have millions in assets.
A couple convicted of fleecing almost $1 million from the taxpayer between them by not paying GST are still living a life of luxury, with interests in properties and a boat totalling $5.9 million.
Michael Holmes, 69, admitted cheating the Inland Revenue Department out of $773,000 and his wife Sharon,55, admitted similar charges involving $225,000.
The Inland Revenue Department brought cases against the couple which were heard separately by the Hamilton District Court.
Sharon Holmes, 55, is either a director or shareholder of companies which own a newly built $1 million house on the Coromandel, an Italian boat, an apartment on the Gold Coast and another Whitianga apartment. Her name is also on the title for five neighbouring sections in Pukekohe, along with another woman.
But Michael Holmes, who owned Parnell's Metropole Bistro & Bar and Le Brie in the CBD in the 1990s, did not have any assets to his name at sentencing as the properties and boat were in his wife's name or trusts.
The court was able to force Mrs Holmes to pay back everything she owed, because the assets were owned by companies linked to her. But the judge could not touch Mrs Holmes' assets while sentencing her husband, who committed the majority of the offending.
Michael Holmes registered three businesses for GST and used them to buy further commercial buildings and units. But when some of his purchases did not go through, he still claimed the GST on them.
Michael Holmes (left in green) in 2008. Photo / Belinda Feek
He also spent a $249,000 GST refund which was mistakenly paid to him.
He was sentenced to 10 months' home detention at a Karaka home - as there was no reception for monitoring equipment at the Coromandel house - on eight fraud-related charges last year and ordered to pay reparation of $252,649.00.
At the time, Judge John Macdonald said: "In the end I feel quite uncomfortable about the situation because it now appears that there are assets out there in the form of a boat exposed in May which had a valuation of $525,000 to $550,000 that could be sold and the money could be applied to the debt to the tax department. But strictly speaking, in a legal sense, you have no direct control over that.
"You could of course persuade your wife to take some steps to sell that asset, no doubt, but in terms of my position I cannot force the issue as I see it."
While Michael Holmes was awaiting sentencing, the couple's previous home in Whitianga, owned by a company in which his wife is a director, sold for $1.5 million - more than double the sum he was convicted over.
He has finished his home detention and was at the Whitianga home when the Herald visited. He said the debt wasn't his - rather the companies that he had been involved with and had subsequently been wound down.
Sharon Holmes, an unqualified accountant, pleaded guilty to knowingly providing false information to the IRD on May 12, 2008 and evading the assessment of GST between March 21, 2001 and January 16, 2009. Prior to sentencing she had already paid back $200,149.47. However, a reparation order was made for an additional $25,460.67, which was paid on the day.
Sharon Leigh Holmes leaves the Hamilton District Court after being sentenced for charges of evading GST. Photo / Belinda Feek
In October, she was sentenced to eight months' home detention to serve at a Karaka house.
The first charge related to Hetherington Farms Family #2 Trust, of which Sharon Holmes is both a beneficiary and director and shareholder of the company which acts as the trustee.
She filed GST for just under $25,000 instead of $225,052.01.
The second charge related to Westvue Management Company Ltd of which she was a director, which she never registered or applied to get an IRD number for and didn't pay GST on 15 occasions over eight years.
The money went on the purchase of the boat and the Gold Coast unit, Crown prosecutor Mike Robb told the court.
An IRD spokesman said it did have civil remedies available to seek further reparations and they were being considered.
Sharon Holmes yesterday said any money taken had been paid back.
She said the $500,000 which the IRD claimed was still outstanding on behalf of her husband were two separate incidents involving late GST returns and resulted in the companies being wound up and the debt being written off by IRD.
"It's an historic company debt that we never had any benefit from."
