The $1.5 million tax-scam so clever it could be a movie
MILLION-dollar fraudster Andrew Christopher Hurst was able to fool tax officials with fake documents when a $40,000 claim raised their suspicions, a court has heard.
The 42-year-old Sunshine Coast dad shed a tear in Maroochydore District Court on Friday as Judge Gary Long jailed him for his six-year, $1,585,413.11 tax fraud.
A podiatry business he claimed to be running from north Brisbane and Pelican Waters was exposed as a fake when he owned up to Australian Taxation Office investigators in 2014.
Hurst had used his knowledge as a former Australian Taxation Office customer service officer and as a Child Support Agency financial investigator to devise a scheme by which he set up the fake podiatry business in 2006 and began submitting false business activity statements in 2008.
He was still working with the child support agency when he began the plan to reap GST refunds for purchases that never took place.
A schedule of facts tendered by Commonwealth Prosecutor Ben Satiu included the admissions Hurst made when Tax Office investigators interviewed him on April 22 last year.
Hurst lodged 67 false business activity statements in his own name between April 2008 and February 2014 and a further 22 false statements in the name of a family trust between December 2008 and December 2013.
He knew from his time working for the Tax Office that sales of a medical practitioner were GST-free and any purchases were GST claimable.
Hurst told investigators he kept his claims under $20,000 each month because he believed claims above $20,000 would trip a risk rating engine, something he also knew from his time in the Tax Office.
In completing his claims, he would work backwards from a refund amount of just less than $20,000 and devise sales and purchase figures that gave that refund outcome.
His offending triggered an audit in February 2009 after Hurst submitted a claim of $43,427 for the previous month.
But when the Tax Office contacted Hurst, he told them he had made mistakes in the statement, resulting in an incorrectly-calculated expected refund.
He was asked to provide a detailed GST transaction report, along with tax invoices of the major amounts from suppliers.
Hurst faxed officers a fake bookkeeping print as well as fake invoices, which resulted in the GST refund being significantly reduced, but not withheld.
No administrative penalty was imposed because Hurst had voluntarily disclosed the purported error at the start of the audit.
His offending continued until an audit was launched in February 2014.
Hurst submitted a $14,460 refund claim the following month, which was withheld while the audit was underway.
A check of Hurst's bank accounts showed the GST refunds he received had been spent on TAB and lotto, credit cards, vehicles, a television, shares, home loan payments, house renovations and decks, a water tank, overseas holidays, cruises and a time share.
The $14,460 claim was not paid.
Hurst made clear the extent of his gambling addiction when interviewed by tax officers.
He had gambled on horses mainly but also dogs.
But then he would gamble on anything he could.
He thought he would just lodge a couple of activity statements, receive a couple of refunds and stop, but he didn't.
"I was winning massive amounts of money and I just couldn't - I just couldn't stop," he told investigators.
"It was like the more money I won gambling, the more money I needed to gamble."
He said he wanted "it dealt with".
"I just couldn't stop. And this is the only way that it was going to stop," he told investigators.
Defence solicitor Nathan Turner said his client had stopped gambling and sought professional help since being charged.
Mr Turner said Hurst had separated from his wife but had a close relationship with his 11-year-old son.
A psychologist's report detailed Hurst's addiction to gambling, alcohol and to a lesser degree, methamphetamine.
Judge Long said Hurst had cynically and substantially abused the trust reposed in businesses by the tax system.
Hurst wiped his eyes with a tissue as Judge Long told him how his incarceration would separate him from his son.
He sentenced Hurst to seven-and-a-half years in jail with a non-parole period of three years.
Hurst was also ordered to repay the $1,585,413.11 he defrauded from the Tax Office.
He briefly hugged a woman before being led from the court room.