Millionaire property developer jailed for GST Fraud

As being a member of society and this country, it is important that each and every individual hold up to their tax obligations towards the country. Trying to deceive the Taxation office or not pay tax can lead to penalties and possibly even jail time.

Sydney-sider millionaire property developer Benjamin Ensor is one example of someone who has tried to fraud the Australian Taxation Office over his GST claims and tax obligations.

Recently sentenced for GST fraud and illegal “phoenixing” activity, the luxury Sydney property developer will now spend six years in jail and pay over $1.8 million Australian in reparations.

Benjamin Ensor was convicted on Friday at the NSW District court for offences regarding structuring entities to fraudulently receive Goods and Services Tax credits and failing to report property sales correctly. His actions have caused damage of $3.4million Australian in losses to the federal government.

Some of the activities which Ensor was convicted of include falsely lodging Business Activity Statements on behalf of nine entities which he was the sole director of between 2008 to 2011. With the money he had obtained from this fraudulent activity, he had used it to purchase luxury goods for himself such as a marina at Lake Macquarie, a catamaran and an apartment.

According to the Australian Taxation office, Benjamin Ensor had reported expenditure of more than $24 million Australian for these entities and claimed $2.2 million Australian in Goods and Services Tax refunds. Ensor had justified his Goods and Services Tax refund claims by creating fake invoices to show his companies providing project management services and created fraudulent invoices for the purchase of high value trucks, trailers, catamarans and excavators. He had also failed to report his sales of Sydney apartments which summed up to over $1.5 million Australian.

In Benjamin’s case, this represents a clear example of “phoenixing” or phoenix activity which costs the economy $5 billion a year through unpaid wages, invoices and tax bills.

Phoenix activity occurs when a company deliberately liquidates in order to avoid paying our creditors, taxes and employee entitlements. The perpetrator transfers their assets to a new company and then continue operating in an identical or similar fashion with the same ownership. Phoenix activities have negative impacts on the economy and the public as it involves the non-payment of wages and employee benefits such as superannuation, it avoids paying its suppliers and as a result the government loses revenue which funds important community services like schools and hospitals.

Some signs to look out for which may indicate a company is conducting illegal phoenix activity includes:

  • If the company is able to unfairly compete with other contractors by charging less for their services
  • If the company changes its name frequently
  • If superannuation payments have not been made
  • If company directors and owners publicly enjoy an extravagant lifestyle that doesn’t seem to match their income.
  • If the directors of a new company are all family members of the director of the former company
  • If a similar trading name is used when the company changes its name
  • If the new company uses the same business location and phone number

 

 

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