Colin Rath was behind the Fiddler's Green winery in North Canterbury. Photo / Supplied
A former high-flying New York property developer who sailed to New Zealand to open a vineyard has today admitted a $1.3 million tax fraud.
Colin David Rath entered guilty pleas to 39 charges of using a document for a pecuniary advantage relating to GST returns, and two charges of forgery - one relating to the Inland Revenue Department documents and the other involving Immigration New Zealand - at Christchurch District Court this afternoon.
The 59-year-old now faces a possible jail term when he is sentenced in March.
Rath sailed to New Zealand on a luxury yacht with his family in 2016.
The following year, he started a winery business in the Waipara wine-growing region in North Canterbury.
However, his businesses, Waipara Winds Ltd which traded as Fiddler’s Green restaurant and vineyard, and New York Grape Escape Ltd, struggled.
Rath started doctoring invoices from different businesses, including builders, marketing companies and other professional service providers, to file falsified goods and services tax (GST) returns
Over a four-year span, through his two companies, Rath filed 39 false GST returns.
In support of them, he prepared 85 forged documents.
He also used 13 forged documents purporting to be from Inland Revenue in support of an entrepreneur residency visa application to Immigration New Zealand.
Inland Revenue, who brought the prosecution against Rath, said he was given just over $1.3m in refunds.
Rath advised Inland Revenue that Waipara Winds Ltd was renovating and improving the land and property of the vineyard to beginning to produce more sustainable income through a restaurant, bed and breakfast, and new crops to augment the grape and wine production and increase grape production.
He was advised the GST affairs of the company were under audit on May 6, 2021.
The April 2021 GST return recorded expenditure of $1.6m, $967,000 of the expenditure related to a “spec house”, “subdivision costs”, and payments for work on “B & B”. Rath told Inland Revenue investigators he would like to arrange a visit so he could show them the assets that the expenditure related to. He asked that the visit be as soon as possible so then the refund could be released.
On May 7, 2021 he took two investigators for a tour of the company’s property. The tour included him pointing out the subdivision for five new sections, as well as pointing out the “spec house” which did not have access from the vineyard.
While showing the house, Rath looked under a rock for the keys but said his wife must not have put them back when there the day before, their daughter’s boyfriend had been working on the property tidying up the last of the build.
He said the investigators could look through the windows. The officers noted furniture in the house, with Rath saying it was staging furniture as the house was getting ready for sale at the end of the month.
Rath provided a copy of the contract with a building company for the “spec house” and also a copy of the subdivision plans, which was a printout of a satellite view of the property with lines drawn on it by a marker pen.
He said the surveyor was away, but he could get more information in a few weeks. The April 2021 GST return included expenses of $103,000 to the surveyor.
A search of the address of the house Rath had taken Inland Revenue investigators to showed that it was owned by a third party unrelated to him or his companies. The owner confirmed he had finished building the home about one year ago. He was not aware of Inland Revenue’s visit and confirmed that he had not given Rath permission to take them to his house.
The building company named in the contract for the “spec house” advised they had completed work for Waipara Winds Ltd in 2017 for about $16,000. They had not issued tax invoices since then or received payments.
With each GST return, Rath provided false information such as a copy of a US bank account which had been doctored.
The Connecticut-raised Rath describes himself on his own website, www.colinrath.com, as a “successful entrepreneur, Manhattan real estate developer, and author”.
He wrote, “It is what it is: A true Manhattan real estate nightmare with a silver lining” which recounts his experiences during the 2000s New York property boom.
A New York Times article in 2015, which referenced him having owned a US$3.4m ($4.7m) luxury apartment in Manhattan with two waterfalls feeding a koi pond in the living room, also signalled his intentions to live in New Zealand, saying “this is not the America I knew”.