Southland school lunch provider sentenced for $800,000 tax evasion

A Southland woman has been given home detention for tax liabilities of more than $800,000.

A Southland woman whose company provided school lunches has been sentenced to home detention for failing to pay income tax.

Debra Lee Monteith was sentenced in the Invercargill District Court to 11 months’ home detention.

Monteith is the sole director and shareholder of Lee 19 Limited, trading as Lee’s Catering, which has been in liquidation since March 2024, owing creditors more than $2 million.

Lee 19 was primarily involved in food catering, including the Ministry of Education’s Ka Ora, Ka Ako Healthy School lunches programme and catering at the Alliance Lorneville meat-processing plant.

The company was registered in 2019 as an employer and began paying its workers. But the following year, several employees phoned Inland Revenue (IRD) saying their KiwiSaver deductions were not being paid.

The IRD said no PAYE returns were filed until 2020, when returns for seven PAYE periods were returned all at once with $82,894.86 (excluding penalties and interest) immediately due and payable.

Monteith entered into an instalment arrangement in 2020 for the debt, but this was cancelled in 2022 because of missed payments.

The company then stopped paying PAYE entirely from March 2021 until February 2024, with a total of $801,928.79 unaccounted for.

Monteith told the IRD that the PAYE was used to keep the company afloat and pay for food costs. Her personal expenses were paid out of the company’s finances and her groceries were taken from the company’s pantry.

The IRD said Monteith benefited by just over $300,000 between 2020 and 2024.

Lee 19 also applied for and received more than $780,000 in Covid-19 support from various schemes.

A six-monthly liquidator’s report on Lee 19 shows the company owes secured creditors $197,226, preferential creditors $1.1m and unsecured creditors $843,336.

Companies Office records show Monteith has run four other companies since the late 1980s.

She was made bankrupt in 2013.