A Christchurch company director who deducted PAYE from his workers’ wages but didn’t pass it on to Inland Revenue has been sentenced to 10 months’ home detention.
Frederick Mario Mau Epiha pleaded guilty to 16 charges of aiding and abetting a company he set up to knowingly apply PAYE deductions and was sentenced in the Christchurch District Court on Tuesday.
In a statement today, the Inland Revenue Department (IRD) outlined Epiha’s “phoenix type” offending – a term that describes when a criminal group, company, or individual who has been shut down, prosecuted, or otherwise disrupted simply re-establishes itself under a new identity, name, or structure, much like the mythical phoenix rising from the ashes.
“Before incorporating Redemption Solutions Ltd (RSL) in May 2022, Epiha worked as a manager for Asia Pacific Group Limited (APG),” the agency revealed.
“He re-established APG’s business under a new company (RSL) without changing or addressing APG’s compliance behaviour.
“Epiha knew of APG’s tax arrears but incorporated RSL to take over APG’s trading business and continued to operate the business in a similar manner to APG.”
The IRD confirmed RSL was incorporated on May 4, 2022, as an employment services company operating out of both Auckland and Christchurch.
Epiha was listed as the sole director from October 22, 2022.
“RSL was tax non-compliant from the outset and was placed into voluntary liquidation by shareholder resolution in April 2023,” said the statement.
“Between May 2022 and March 2023, RSL was required to file PAYE returns each month. Epiha failed to pay the full amount between August 2022 and April 2023, leaving an unpaid PAYE of $215,043.24.”
Epiha’s offending was described as “deliberate, premeditated and repeated”.
“The court was told the real victims are New Zealand taxpayers and that offending of this nature poses a threat to the integrity of the tax system,” the IRD statement said.
“Offending of this kind also creates an unfair financial advantage over other businesses in the same industry, potentially encouraging other industry participants to commit the same offence to compete on a balanced playing field.”
Epiha’s offending continued despite warnings from the IRD.
The agency said he even confirmed that he knew RSL’s failure to pay its employees’ PAYE to the IRD Commissioner was a criminal offence.
In a similar case in 2024, APG director Melanie Tatana was sentenced to three years’ imprisonment for aiding and abetting APG in failing to account for PAYE of $1,602,864.17.
In court, her offending was described as “serious” and “the worst of its kind to come before the Christchurch District Court in the last 20 years”.
The judge said it involved “the wilful diversion of funds” rather than business insolvency.
Tatana – also known as Melanie Jill Smith – ran asbestos removal and labour hire company APG, which employed around 60 people.
On 63 occasions between April 2019 and September 2022, APG failed to pay PAYE totalling $1,602,864.17 to the IRD.
As a result, Tatana was charged with 63 counts of aiding and abetting APG to knowingly take PAYE from workers’ wages and not pay it on to Inland Revenue.
The IRD also revealed that between April and May 2022, APG received over $2.2 million in Covid-19 wage subsidies, with $107,500.00 in governmental resurgence support payments.
Anna Leask is a senior journalist who covers national crime and justice. She joined the Herald in 2008 and has worked as a journalist for 19 years with a particular focus on family and gender-based violence, child abuse, sexual violence, homicides, mental health and youth crime. She writes, hosts and produces the award-winning podcast A Moment In Crime, released monthly on nzherald.co.nz