Commonwealth Director of Public Prosecutions

Tax cheat who defrauded the Australian Community over $332k has sentence increased

Date of Publication: 
12 February 2015

A 39-year-old Perth man has been resentenced and his term of imprisonment increased to three and a half years with a requirement to serve twenty one months in custody for defrauding the Australian community of $332,646.

The Commonwealth Director of Public Prosecutions (CDPP) successfully argued on appeal that Mr Craig Host’s previous sentence of two years with release after eight months, was manifestly inadequate.

Between 2004 to 2008 Host obtained financial advantage from the taxation office by lodging thirty false monthly BAS returns and three annual tax returns. When the ATO conducted a full audit of his affairs in late 2008, Host also used forged documents in an attempt to avoid detection.

In resentencing Host the Appeal Court said “The Respondent’s criminality was not isolated or opportunistic. It involved planning and premeditation—a system of planned, deliberate, repeated and dishonest claims with the object of obtaining substantial sums of money from the ATO for his own benefit. The Respondent’s criminality in relation to the monetary benefits he fraudulently obtained was compounded by his use of forged documents with a view to misleading and deceiving the ATO in relation to those benefits” and that “when all the relevant facts and circumstances … and all relevant sentencing factors are examined it is apparent that the total effective sentence did not reflect the seriousness of the overall offending”.

When resentenced Host had already been released from custody under the original sentence so the increase meant he had to return to prison to serve an additional 13 months.

Charges

Craig Host was originally convicted and sentenced in relation to:

  • 30 x s.134.2(1) Criminal Code (Cth) – lodgement of false monthly BAS returns for the family trust
  • 3 x s.134.2(1) Criminal Code (Cth) – lodgement of personal annual income tax returns
  • 15 x s.145.1(1) Criminal Code (Cth) – use forged documents.
The maximum penalty for each offence is 10 years imprisonment and/or a fine of $66,000.

Proceed of Crime Litigation

Paralleled litigation under the Proceeds of Crime Act 2002 (Cth) was also conducted by the Australian Federal Police (AFP) in order to recover the monies defrauded.

Case Background

In the year 2000 Host commenced a computer retail sales and support business which operated under a trust structure. The business was registered for GST. Host and has wife were the primary beneficiaries of the Trust and sole directors and shareholders of New Chip Nominees Pty Ltd ("Newchip"), which was the trustee for the Family Trust. Host overstated the amount of creditable acquisitions that were said to have been made by the Family Trust, and once lodged resulted in a credit amount payable to the Family Trust that he was not entitled to.

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The ATO utilises a self-assessment system which relies on the honesty of tax payers in declaring the correct amounts of GST payable and refundable. For further information about self-assessment and how the ATO check compliance is available on the ATO website.

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