Two men were today sentenced to jail by the Melbourne County Court for tax fraud and money laundering offences.
Chi Vien Duong, 42, was sentenced to five years and six months jail and his business partner Nhon Anh Khuu, 45, to four years and six months.
Duong and his business partner Khuu pleaded guilty to three counts of defrauding the Commonwealth, 23 counts of obtaining a financial advantage by deception and one count of dealing with money or property intended to become an instrument of crime.
The two men ran a labour hire and poultry sales business which they used to over-claim GST input tax credits of $1,164,609 by creating a number of fake subcontractor companies.
They also used a round robin money laundering scheme – paying employees in cash that was not declared to the Tax Office – to avoid pay as you go withholding tax and Medicare levy surcharges. The scheme also allowed them to hide cash income of $2,046,846.
The total amount defrauded was about $4.7 million.
Investigations by the Tax Office began in 2004, as a result of search warrants conducted by the Tax Office, Australian Federal Police, Centrelink and the Department of Immigration and Citizenship, on seven locations across Melbourne. The search warrants resulted in the seizure of $735,000 in cash.
Duong will serve three years and four months before being eligible for parole and Khuu and will serve two years and eight months.
Tax Commissioner Michael D’Ascenzo said tax fraud is not a victimless crime and it has serious impacts on the broader community, both in terms of the unfair burden shouldered by honest Australians and also because of its corrosive effect on community standards.
“The Tax Office continues to have a close focus on businesses operating in the cash economy who seek to evade their tax obligations,” Mr D’Ascenzo said.
“Last year we wrote to, phoned or visited more than 68,000 businesses, we undertook 7,300 reviews and audits and established more than $100 million in total liabilities.
“People who seek to evade their obligations put an unfair economic and operational burden on the majority of those who do the right thing.
“We take firm action and where necessary work with other law enforcement agencies to bring these people who abuse Australia’s tax and superannuation systems to justice.”
Results from 1 July 2008 to end March 2009 show that we have had 48 prosecutions for indictable offences (not including the prosecutions under Project Wickenby).
About the Author
Warren Kruger is an Australian Tax Specialist and Advisor.
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Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,enter your name and email address in the Opt In Box located on the top right hand side of this article.
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