Melbourne reseller jailed for $1.2 million tax fraud

Melbourne reseller jailed for $1.2 million tax fraud

Six moons after new federal sales tax laws came into effect, a Melbourne reseller is crying in his swill today after being sentenced on Tuesday to two years in jail for defrauding the Commonwealth out of $1.2 million in sales tax.

The finding by Judge Ross of the Melbourne County Court against Michael Mihalakis, aged 34, is believed to be the largest ever against a personal computer trader in Australia.

Found guilty on four charges, Mihalakis was ordered to serve 10 months behind bars before being released on a further two-year good behaviour bond. The Crimes Act allows for fraud to carry a maximum penalty of up to "10 years in jail and/or a $100,000 fine". The judge implied that the punishment would have been harsher had the defendant not cooperated with authorities.

A spokesperson for the ATO revealed Mihalakis had traded under several names over several years, opening and closing businesses in an attempt to stay ahead of the law.

Michael Cebalo, assistant commissioner of taxation, claimed the Australian Taxation Office and Australian Federal Police have been closely monitoring and strictly enforcing laws in the computer industry. This observation of resellers has netted 185 charges, including 21 that involved "custodial sentences".

"While the main emphasis of our compliance activities is to help people meet their obligations, we will take strong action against those who deliberately evade taxes," Cebalo said. "The fact that defendants have been jailed shows that there are serious consequences for those people who flout the law."

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