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Computer dealer jailed for tax evasion

Computer dealer jailed for tax evasion

A Box Hill man has been sentenced in Melbourne to 22 months jail for defrauding the Government of $1.9 million in sales tax.

Fifty-six-year-old Leslie Ferdinands failed to pay sales tax on computer goods sold over a 15-month period between 1994 and 1995, by obtaining goods with a tax-free exemption number, before selling these goods as if the tax had been paid.

Operating under the name Vindar Pty Ltd, Ferdinands managed to sell PC equipment and peripherals in excess of $9 million without paying sales tax, before being discovered by Australian Federal Police and the ATO.

Ferdinands was also implicated in a scheme to write false invoices for contractors, enabling others to avoid sales tax. He was not charged for these offences, however.

Eligible for parole in three months on a 28-month good behaviour bond, the presiding judge cited mitigating factors and the defendant's undertaking to assist authorities in future prosecutions.

"The means adopted by you to defraud the Commonwealth were common in the trade and obviously operated to the disadvantage of honest traders," Judge Cullity told Ferdinands.

After changes to sales-tax exception laws in 1998, Bill Madden, ATO's national project manager claims the prevalence of tax fraud had been culled significantly, evident in the sharp increase in tax revenues collected by the ATO.

Prior to 1998 the ATO was receiving between $50-55 million per month. After 1998 this figurer jumped to $80-85 million per month, an increase significantly higher, Madden claimed, than an estimated 10-15 per cent growth of the industry.

"We've had a focus on the computer industry for the last few years now," said Madden. "Quite often it comes from a dealer being constantly undercut by a competitor, who then complains to the ATO and we follow it up."The sentencing of Ferdinands, who pleaded guilty to two charges of fraud, comes after the ATO has faced a lot of pressure with the introduction of the new tax system.

"This case demonstrates the Tax Office's commitment to stamp out fraudulent operators in industries such as the computer industry," claimed assistant tax commissioner John McCarthy. "While much of our effort is devoted to helping people understand the new tax system, we will continue to remain alert and work with the computer industry to detect tax scams."


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