Commonwealth Director of Public Prosecutions

Andrew HURST - GST fraud

Tax Fraud

On 16 September 2016, 42-year-old former Australian Taxation Office (ATO) employee Andrew Hurst was sentenced to seven years and six months imprisonment after he pleaded guilty in the District Court at Maroochydore of falsely claiming GST refunds worth $1,585,413.11 to which he was not entitled.

Hurst had registered as a sole trader, as well as the sole director and beneficiary of another business that was operating as a Trust. Both businesses purportedly provided podiatry services, however ATO investigations revealed both were fake.

Between April 2008 and June 2014, Hurst lodged 67 false business activity statements (BAS) with the ATO, where he recorded fictitious sales and purchases for his purported businesses. As a former ATO employee, Hurst knew that sales of a medical practitioner were GST-free and any purchases were GST claimable.

Hurst’s BAS claims triggered an audit in February 2009 after he submitted one for $43,427.

During this review of his entitlement to receive some of the GST refunds claimed, Hurst submitted fabricated documentation including fictitious bookkeeping entries and false tax invoices purportedly recording business activity and the supply of equipment to his business entities.

Hurst also unsuccessfully attempted to obtain a further $14,460 in GST refunds in relation to a falsified BAS lodged on behalf of the Trust entity, which was not paid by the ATO.

Hurst’s false BAS statements resulted in his two businesses obtaining total GST refunds of $1,585,413.11 to which they were not entitled. Hurst used this money to feed his gambling addiction and on overseas holidays, cruises, a time share, vehicles and home renovations.

Charge / Sentence

Following a guilty plea, on 16 September 2016 Hurst was sentenced to:

  • seven years and six months imprisonment for two counts of obtaining a financial advantage by deception section contrary to subsection 134.2 (1) of the Criminal Code (Cth)
  • two years imprisonment for using false documents contrary to subsection 145.1 (1) of the Criminal Code (Cth)
  • two years imprisonment for attempting to obtain a financial advantage by deception contrary to sections 11.1(1) and 134.2(1) of the Criminal Code (Cth).

A single non-parole period of three years was imposed, and the sentences were ordered to be served concurrently. Four days presentence custody was declared as time already served.

Hurst was further ordered to pay reparation to the Commonwealth of Australia of $1,585,413.11 pursuant to subsection 21B of the Crimes Act 1914 (Cth).

Sentencing remarks

In sentencing, Judge Long SC said Hurst’s offending was premeditated, calculated, and systematically persistent and involved substantial and cynical abuse of the self-assessment system relating to GST for businesses. 

‘There was abuse therefore, of the trust reposed in the operators of businesses in that regard and the system for the making of genuine returns and claims. Apart from the financial loss to the Commonwealth, your conduct strikes at the level of confidence placed in the efficiency and integrity of the Australian taxation system.’

It was apparent to Judge Long SC that a degree of sophistication was involved, as Hurst had applied the knowledge he’d gained from his previous employment at the ATO. As a result, his Honour noted it was both necessary and appropriate to achieve general and personal deterrence through imposing condign punishment.

In sentencing, Judge Long SC took into account a previous criminal history for dishonesty offences, an early indication of a plea of guilty, his cooperation by making full admissions of his offending, his remorse, the impact the sentences would have on his family, and an assessment made by a clinical psychologist that Hurst had taken steps to address addictions to gambling, drugs and alcohol.