All resellers should be wary of a new evasion scam exposed by a NSW dealer last week. A purchase order he forwarded to a distributor late last year has been illegally copied and its details altered before being reused by a third party to buy goods totalling over $41,000 from the same company.
Highlighting the need for further regulations on how goods are being paid for, the goods were picked up by the buyer after being paid for by a direct cash deposit into the distributor's bank account. The very large distributor in question was happy to accept the transaction in this manner without any further checks as to its legitimacy.
According to the reseller who contacted ARN with full details of the matter, the forged document was a copy of his printed order form including its letterhead, contact details, sales tax number and his signature.
"It had been changed but I traced the document to an order I placed with another branch of the distributor in October," said the central coast reseller who wanted to remain anonymous.
It's a bit scary
"I have never dealt with this branch of the distributor. It's a bit scary when someone places a $41,000 order in my name with my tax accreditation number and then pays for it with cash. I wonder how many other times my or other people's orders have been used in the same way."
The reseller was alerted to the fraudulent use of his sales tax number when a courier company rang advising him of a purchase order faxed to it in error. Two digits in the distributor's number had been mistakenly switched by the shonky buyer who attached a copy of the untraceable cash deposit slip as proof the order had been paid for.
"I would probably never have known of the order if the buyer hadn't faxed the payment confirmation to the wrong company," our source said. "Luckily, someone was thorough enough to ring the number on the letterhead to advise it had gone to the wrong number."
The reseller contacted his local police and regional tax office immediately. The ATO was making urgent enquiries with the distributor and charges will probably be laid as a result. The ATO is also now investigating whether this is the action of a rogue employee or an organised system catering to cash-based dealers.
"I was worried that if something went wrong, I'd be in the gun. Resellers should ask their suppliers to confirm all orders with them before they are processed," the reseller said, adding that there should be regulations limiting the size of orders that can be paid for in cash.
"They [the ATO] shouldn't allow cash transactions on anything over $500. There is a huge cash economy happening in the computer industry and that is how tax is being avoided.
"I think that someone who is working in the company is grabbing mine and perhaps other orders, then scanning them, altering them and selling them on the black market. This could be rampant, as I have since discovered that all accredited companies and their tax numbers are listed on the ATO's Web site."