Three principals of Melbourne-based Z-Tek Computers have been booked in for a six-month sojourn at the Big House following their sentencing last week for defrauding the Commonwealth out of more than $650,000 in sales tax.
George Guo Hong Zhou and Nelson Wei Zhou were sentenced by Judge Morrow of the Melbourne County Court to 12 months' jail, with six months to serve immediately. They also face a $1,000, three-year good behaviour bond upon release.
A third party in the Z-Tek tax evasion scheme, Sam Jin, was also sentenced after a guilty verdict and received the same penalty as the Zhous. In addition, Jin was ordered to pay reparations to the Commonwealth of $631,000.
As reported in ARN Daily, (September 15), the two Zhou's earlier pleaded guilty to one count of defrauding the Commonwealth out of sales tax. The maximum penalty for the offence is up to 10 years in jail.
The charges relate to tax fraud by wholesale and retail businesses that the Zhou's own, including Asia Pacific International of Australia (APIA) and Z&Z. At least five other business names were implicated as being associated with fraud charges the court did not proceed with.
In return for the guilty plea, a government source said five other charges of defrauding the Commonwealth and one of organised fraud were not proceeded with.
The source said all three men and their representing QCs seemed "not too upset" by the proceedings, adding that Judge Morrow took a dim view of them despite sales tax no longer existing under the current GST.
In handing down his sentences to the three men, Judge Morrow mentioned previous charges that they had faced.
He said that by participating in this illegal scheme, the guilty parties had forced many legitimate computer traders out of business and that the sums involved were a significant defrauding of the Commonwealth that could not be tolerated.
The Zhous' existing business, Z-Tek Computer, was started in 1995 and continues to operate under the control of Nelson Wei Zhou's wife, also a company director.
Another government source said there is still a "handful" of charges pending from the old sales tax system. This included one with "many millions of dollars" involved against an organisation that started its activities in Victoria before expanding into Western Australia.
The source said there are still plenty of Australian Tax Office and Australian Federal Police resources being allocated to "winding up" cases originating under the old system and said there is some pressure to get them finalised.