A Manly man was today sentenced to six years' jail in the NSW District Court for goods and services tax (GST) fraud relating to illegal phoenix activity in the property and construction industry. He was also ordered to pay reparations of more than $1.8 million.
Benjamin Ensor, 56, was convicted after an Australian Taxation Office (ATO) investigation found he had structured his companies to fraudulently obtain GST credits and failed to report property sales to avoid paying GST, causing a loss to the Commonwealth of $3.4 million.
Between 2008 and 2011, Mr Ensor lodged false Business Activity Statements (BAS) on behalf of nine companies of which he became the sole director, using the money he obtained to fund the purchase of luxury items including a marina at Lake Macquarie, a catamaran and a unit to live in. The funds were also used to meet expenses incurred during the course of developing five beachfront luxury apartments in Manly.
Mr Ensor reported his companies' expenditure was more than $24 million and claimed more than $2.2 million in GST refunds.
To justify his GST refund claims, Mr Ensor:
- created false invoices that showed related companies provided project management services
- produced fraudulent invoices for the purchase of high-value excavators, trailers, trucks and catamarans.
He also failed to report the sales of the Manly apartments on which he should have paid GST of more than $1.5 million.
Assistant Commissioner Aislinn Walwyn said while some people viewed tax crime as victimless, this couldn't be further from the truth.
"Illegal phoenix activity is a serious threat to the integrity of the tax and superannuation systems and costs the community billions of dollars every year," Ms Walwyn said.
"This case exhibits classic illegal phoenix behaviour. Companies were deliberately liquidated to avoid paying creditors and taxes. New companies continued operating the same or a similar business with the same ownership.
"As part of the multi-agency Phoenix Taskforce, the ATO is committed to taking strong action against illegal phoenix activity to protect all Australians.
"Today's result demonstrates the ATO's commitment to detecting and prosecuting the most egregious tax crimes and should serve as a warning to those who think they can flout the law and get away with it."
If you have any knowledge or concerns about companies that may be exhibiting illegal phoenix behaviour you can report it to the ATO – either online at ato.gov.au/reportaconcern or by phoning the phoenix taskforce hotline on 1800 807 875.
