Z-Tek principals face the slammer

Z-Tek principals face the slammer

The principals of Melbourne-based Z-Tek Computers are currently sweating it out in Melbourne's Remand Centre waiting for final sentencing after pleading guilty to one count each of Defrauding the Commonwealth.

Widely known in the channel for selling IT products without sales tax advertised through avenues such as Melbourne's Green Guide, two of the six individuals involved in a string of related companies will be told their future next Wednesday, 20 September.

The date was set at a pre-trial hearing on Monday 11 September at the County Court of Victoria.

According to a government source familiar with the case, entities managed by the individuals involved defrauded the Commonwealth of around $3 million in taxes between May 1993 and June 1995.

The source reports George Guo Hong Zhou and Nelson Wei Zhou face sentences of between six months and one year after pleading guilty to one count of defrauding the Commonwealth. The maximum penalty for the offence is up to 10 years in gaol.

In return for the guilty plea, five other charges for defrauding the Commonwealth and one of organised fraud were not proceded with, the source said.

In addition, the tax fraud figure was reduced to $650,000, in line with the guilty plea.

Another man, Hao Liu (aka Michael) received a suspended sentence, while one others is to be sentenced on 1 October.

The charges relate to wholesale and retail businesses operated by the Zhou's: Asia Pacific International of Australia (APIA) and Z&Z. At least five other business names were implicated as associated with the other fraud charges that were not proceeded with by the court.

Zhou's existing business, Z-Tek Computer, started in 1995 and continues to be controlled by Nelson Wei Zhou's wife and company director for the duration of the Zhou's prison term, according to another government source.

The source reported the Zhou brothers looked "pretty calm and collected" at the hearing on Monday, each flanked by a defending QC. "But they weren't happy when they were remanded in custody," the source said.

The legal profession is not unfamiliar to Z-Tek. The company fronted court courtesy of the ACCC in August 1997 for allegedly advertising computers at non-tax inclusive prices.

In addition, ARN reported on 6 August that Z-Tek made an out-of-court settlement of $150,000 with Microsoft for allegedly selling counterfeit software.

A Microsoft statement at the time said several purchases of counterfeit products were made from Z-Tek by undercover investigators between July 1996 and March 1997.

Z-Tek staff refused to offer comment for this story.

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