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Restaurant co-owner jailed for money laundering and tax evasion

A co-owner of a Restaurant chain has been jailed for hiding millions of dollars in cash sales and laundering large amounts of it.

The co-owner was sentenced today at the Auckland High Court to three years and two months in prison, plus a $50,000 fine, on nine money laundering charges and 34 tax evasion charges.

A former accountant was also sentenced today to 10 months home detention and ordered to pay $5,000 in reparations.

Inland Revenue spokesman Tony Morris says the evasion wasn’t particularly sophisticated but was carried out on a massive scale.

“The client provided 114 individual GST returns to Inland Revenue on behalf of the Related Companies, which together concealed more than $6.5 million of mainly cash sales,” Tony Morris says.

“The tax offending was linked inescapably to the money laundering but the money laundering was far more complex, involving multiple bank accounts here and overseas.

“The co-owners, collected cash from the Restaurants, and delivered the money to be laundered.

“They controlled the deposit of large amounts of cash into bank accounts, transferred the cash to overseas banks, purchased large amounts of foreign currency, and then brought the money back to New Zealand.”

The tax offending spanned six years, from April 2008 to April 2014 through regular, two-monthly false returns to IR. The money laundering took place over 14 months through a series of transactions from 15 February 2012 to April 2013.

“Tax evasion hurts everyone because taxes are what fund essential items like hospitals, schools, and national parks. On a more basic level, tax evasion allows unscrupulous people to get a leg up over their competitors,” Tony Morris says.

“Hiding their cash sales, and laundering the proceeds of their offending, meant the Restaurants were inevitably able to undercut other restaurants.

“The tax evasion and money laundering were uncovered at a tremendous public cost. It required a substantial effort to detect, uncover and prosecute this case.

“The investigation took longer than it should have because they had false responses prepared to deliberately frustrate the enquiries. IR’s investigation into the money laundering meant contacting tax authorities in Australia and India where the co-owners tried to hide their criminal proceeds.

“The offending itself caused significant financial loss to society. The money laundering was designed to hide the tax evasion and allow him to enjoy the fruits of his crime at society’s expense,” Tony Morris says.

Another person, who was a former co-owner of the companies running the chain, pleaded guilty to 21 charges of tax evasion and was sentenced to nine months home detention in 2018.

He pleaded guilty to nine charges of money laundering along with the owner who also pleaded guilty to 34 charges of tax evasion in October.

He previously had imposed and served a sentence of Home Detention for charges relating to providing false or misleading information to Immigration New Zealand.

Source: www.ird.govt.nz


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