A bankrupted Northland man was not prepared to pay his fair share of tax but had no qualms receiving benefits from the government, a judge commented while sentencing the man to home detention.

Thomas Joseph Brown, 57, appeared in the Whangarei District Court for sentencing after pleading guilty part-way through his trial last month to charges of evading assessment or payment of income tax and GST. A court order prevented the Northern Advocate from publishing the fact he had pleaded guilty at the time.

Three others - Timothy Meredith, 46, Carol Karl, 51, Andrew Karl, 43 - were found guilty by a jury on similar charges. All are members of a group which utilises a Maori sovereignty element to resist the Inland Revenue Department. The scheme consists of a bank account in the name of Nga Uri Tupoto Incorporation through which income generated by the four is washed and no tax is paid by them or the incorporation.

Their income was deposited in the incorporation's account before the funds are transferred to their respective bank accounts by electronic transfer or cash.


In Brown's case, deposits of $325,450 were made into the incorporation's bank account between October 2010 and April 2011. The source of the money was identified as Stargate Corporation, a manufacturer of party pills. Further analysis of the incorporation's bank account indicated withdrawals of $235,000 were made over the same period and deposited into an ANZ Bank account called Aetherika Ahu Whenua Trust.

Brown is the sole signatory of that account.

He provided services to Stargate Corporation and used the income for his personal living expenses without paying any tax. The total tax evaded was $119,000. In court he presented a cheque for $10,000 to the IRD as a "goodwill gesture".

Judge Keith de Ridder said Brown, who received a disability allowance, acknowledged he should have thought through things better and was at a low risk of reoffending.

Despite being a man of considerable intelligence, he said Brown embarked upon a clear path of evading his responsibility of paying taxes.

Judge de Ridder said the benefit Brown received was funded by tax dollars, but he was not prepared to pay his share of taxes.

He made repeated spurious applications to tip over the trial and entered a guilty plea after being advised by senior lawyer Greg Bradford he had no defence.

Brown was sentenced to nine months' home detention. Brown was bankrupted in February 2011, Meredith has been a bankrupt since April 2008.