The former directors of a failed Tokoroa company deducted more than $229,000 of PAYE from their staff which they failed to pay the IRD, a court has heard.
Dennis Bruce Allen, 50, was sentenced in Rotorua District Court yesterday to nine months' home detention and 200 hours' community work.
He had previously pleaded guilty to one representative count of tax evasion for knowingly applying or permitting PAYE deductions to be applied for a purpose other than payment to the Commissioner of Inland Revenue.
Wilfred Cortesi, Allen's fellow director at Pro-Installations (Central) Ltd, had previously been sentenced to eight months' home detention and 200 hours' community work.
Judge Phillip Cooper said the offending, which took place between May 2008 and July 2010, was a breach of trust as money deducted from employees' wages for their PAYE obligations was instead kept and used for the company's own purposes.
"This was not a case of bumbling incompetence but a conscious decision not to pay this money in the way it was required to be paid."
Are you getting a sense of deja vu? Check this out:
We blogged a couple of weeks ago about the hypocrisy of Matt McCarten opining about tax rorts for the rich when he was a tax rorter himself. Stuff has a very interesting story, which shows that McCarten and Unite's rorting is even worse than first thought; check this out:
Inland Revenue is chasing unionist Matt McCarten's Unite Support Services for $150,750 in unpaid taxes after the department forced the company into liquidation last month.Now we knew about the $134,000 debt, and the $8000 per month payment deal that Unite union has negotiated. But to learn that Unite Social Services Limited, for whom McCarten is listed as the sole director was somewhat shocking.
McCarten's vehicle, which supplied administrative support services to the youth-orientated union Unite, was put into liquidation by a High Court order last month after the IRD pursued it for "failure to provide for taxation," according to the first liquidator's report.
The Official Assignee rated the prospect of a dividend as "unlikely," and is looking into the company's possible interest in an Onehunga building lease, the report said.
The liquidator will contact McCarten to verify Unite Support Services' interest in the building, which may have outstanding arrears owed on the lease.
IRD is seeking almost $4000 costs, $97,000 in a preferential claim and a further $49,800 as an unsecured creditor with proof of debt.
The Unite union assigned an interest in a lease and the provision of educational activities to McCarten's company, according to its 2009 financial statements, the latest lodged with the Companies Office. The union has the right to take action against McCarten's company if there's a default on the lease agreement.
The union ran afoul of the IRD after failing to pay tax on revenue accrued between October 2007 and March 2009. After racking up $134,000 in unpaid tax, it agreed to repay that at a rate of $8000 a month.
For McCarten, his union and his company to have have incurred debts to the IRD of well in excess of a quarter of a million dollars is outrageous. And the story above confirms that this was a systematic rorting of the tax system, running from October 2007 to March 2009; more on that later.
In the post above from July 2011 we posed some questions of Matt McCarten; read on:
So we have some questions for Matt McCarten:
Last but not least, and noticing the dates during which payments to IRD were systematically withheld, here are some final questions:
- How many staff members did Unite Union and Unite Social Services Limited employ?
- How much of the money owing to IRD was PAYE, deducted at source from employees and held in trust?
- How much of the money owing to IRD was for Student Loan deductions from employees?
- How much of the money owing to IRD was for Kiwisaver deductions from employees, and employer deductions for Kiwisaver?
- Who was responsible for making payments to IRD?
- Who made the decision to withhold payments to IRD, and is that person still an employee of Unite Union or Unite Social Services Limited, or an office-holder of either of the aforementioned?
- Was the money owing to IRD used for other activities?
- How much of the money withheld and owing to IRD was used for Unite union campaigns or publicity?
- How much of the money withheld and owing to IRD was used for any activities in any way related to the 2008 General Election?
- What donations of money, time and/or resources were made to political parties in the period October 2007 to March 2009, and which parties were the beneficiaries of donations from Unite Union or Unite Social Services Limited?
- What would Unite Union and Matt McCarten's reaction be if an employer employing staff who are members of Unite Union withheld payments to the IRD totalling more than $250,000, and for a period of eighteen months?
We have another question today; what's the difference between the case of Mr Bruce Allen and that of Mr Matt McCarten? Could McCarten's public profile be the reason why he wasn't prosecuted for offenses over a similar time period, and offences which involved a similar amount of dosh?
If anything Matt McCarten's breaches of his statutory obligation to pass on PAYE deductions from his union's employees is more serious than Bruce Allen's. McCarten regularly rails against dodgy employers, but in truth, he is as bad as any of them. There is a very large double standard at play here.