Businessman given home detention for tax evasion

Gisborne Courthouse. File picture by Rebecca Grunwell

A GISBORNE businessman who evaded paying about $421,000 in tax over a five-year period has tried unuccessfully to have an indicated sentence further reduced.

He was sentenced to home detention for seven-and-a-half months.

In March, Art Fun Wear owner Liangxing Luo, 46, pleaded guilty to three charges of tax evasion after accepting the sentence indication from Judge Warren Cathcart.

Returning to court for the sentence to be imposed, Luo’s laywer Michael Kan said his client could now potentially receive a further discount from the indicated sentence, having shown insight into his offending at an interview with a pre-sentence report writer.

Luo told the author his offending was motivated by greed.

The judge might now want to take into account Luo’s attitude and how accepting he was of his conduct, to discount the indicated sentence further, Mr Kan said.

But Judge Cathcart rejected the submission, saying that insight was immaterial to the sentence already indicated.

In his view the main mitigating factor highlighted by the pre-sentence report was Luo’s lack of previous convictions, which was already taken into account at the time the sentence was formulated.

The judge imposed the full seven and a half months term on Luo, who will serve it at his Potae Avenue address.

There will be six-month standard and special post-detention conditions.

Stores in Gisborne, Dunedin and Invercargill

Luo, who operated three emporium-styled stores in Gisborne, Dunedin and Invercargill, now has convictions for offences (under the Tax Administration Act 1984) of aiding and abetting the company to evade assessment or payment of tax by knowingly failing to keep information required to be kept by tax law; and with two counts that he evaded the assessment or payment of tax by another person, under a tax law.

His offending was discovered during an audit.

He was unable to produce records for cash sales at his Dunedin and Invercargill stores when required to do so by the Commissioner of Inland Revenue.

He had either personally or directed others to deposit some cash from sales into accounts other than the company’s.

He did not advise his tax agent of those deposits or provide the agent with the daily sales records kept by employees.

The tax agent used incomplete information to prepare and file the company’s GST and income tax returns.

Luo previously told an auditor he did not intend to mislead his tax agent.

He admitted depositing funds from cash sales into personal accounts but said he did so to avoid bank fees.

He also claimed some of the money in the personal accounts was from repayment of loans but was unable to provide any details.

A GISBORNE businessman who evaded paying about $421,000 in tax over a five-year period has tried unuccessfully to have an indicated sentence further reduced.

He was sentenced to home detention for seven-and-a-half months.

In March, Art Fun Wear owner Liangxing Luo, 46, pleaded guilty to three charges of tax evasion after accepting the sentence indication from Judge Warren Cathcart.

Returning to court for the sentence to be imposed, Luo’s laywer Michael Kan said his client could now potentially receive a further discount from the indicated sentence, having shown insight into his offending at an interview with a pre-sentence report writer.

Luo told the author his offending was motivated by greed.

The judge might now want to take into account Luo’s attitude and how accepting he was of his conduct, to discount the indicated sentence further, Mr Kan said.

But Judge Cathcart rejected the submission, saying that insight was immaterial to the sentence already indicated.

In his view the main mitigating factor highlighted by the pre-sentence report was Luo’s lack of previous convictions, which was already taken into account at the time the sentence was formulated.

The judge imposed the full seven and a half months term on Luo, who will serve it at his Potae Avenue address.

There will be six-month standard and special post-detention conditions.

Stores in Gisborne, Dunedin and Invercargill

Luo, who operated three emporium-styled stores in Gisborne, Dunedin and Invercargill, now has convictions for offences (under the Tax Administration Act 1984) of aiding and abetting the company to evade assessment or payment of tax by knowingly failing to keep information required to be kept by tax law; and with two counts that he evaded the assessment or payment of tax by another person, under a tax law.

His offending was discovered during an audit.

He was unable to produce records for cash sales at his Dunedin and Invercargill stores when required to do so by the Commissioner of Inland Revenue.

He had either personally or directed others to deposit some cash from sales into accounts other than the company’s.

He did not advise his tax agent of those deposits or provide the agent with the daily sales records kept by employees.

The tax agent used incomplete information to prepare and file the company’s GST and income tax returns.

Luo previously told an auditor he did not intend to mislead his tax agent.

He admitted depositing funds from cash sales into personal accounts but said he did so to avoid bank fees.

He also claimed some of the money in the personal accounts was from repayment of loans but was unable to provide any details.

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