Close but no cigar: taxpayer jailed after creating fake business to obtain $1.5M tax refund

A 39-year-old South Australian man has been sentenced to 2 years and 4 months imprisonment after he attempted to obtain almost $1.5 million in tax refunds.

On 31 July 2019, Adam Hamshere appeared before the Adelaide District Court which heard that in January 2016, Mr Hamshere registered a fake business which purported to sell cigars. In doing so, Mr Hamshere obtained an ABN and later registered for GST and Wine Equalisation Tax (WET), backdating the GST registration to commence in January 2015.

In March 2016, Mr Hamshere lodged five business activity statements (BAS) in which he claimed an entitlement to $1,444,069 in GST and WET refunds.

After becoming the subject of an ATO audit, Mr Hamshere frequently phoned the ATO demanding immediate payment of the refund and claiming that his paper and electronic records had been stolen. However, despite thorough investigations into Mr Hamshere’s affairs, the ATO found no evidence to substantiate his business activity or his claims that his records had been stolen.

Ultimately, Judge Muscat found that Mr Hamshere had attempted to dishonestly obtain a financial advantage from the Commonwealth, pursuant to sections 11.1 and 134.2(1) of the Criminal Code 1995.

Acting ATO Assistant Commissioner David Mendoza asserted that the strong sentence is a timely reminder of penalties facing those who attempt to cheat the tax system. In doing so, he asserted that “those people who try to evade or cheat the tax and super system will get caught and we will take firm action. We will not tolerate this type of behaviour.”

Wiebke HerrmannWiebke Herrmann is a Director at James Conomos Lawyers where she practices in the areas of insolvency, bankruptcy and commercial litigation. If you or your business needs assistance navigating a legal dispute, please do not hesitate to contact her. 

3004 8214 |    |  wiebke@jcl.com.au