6 May 2019

Family of Thai restaurateurs charged with tax fraud and money laundering

7:31 pm on 6 May 2019

A family of Thai restaurateurs who ran a string of restaurants around the lower North Island has gone on trial in the capital, accused of tax fraud and money laundering.

18072016 Photo: Rebekah Parsons-King. Wellington High Court.

The restauranteurs are on trial in the High Court in Wellington. Photo: RNZ / Rebekah Parsons-King

Between them, the 11 defendants face 64 charges in the High Court in Wellington, to which they pleaded not guilty at the start of the trial.

The defendants are:

  • Boonrouen Thongskul
  • Vattanachai Kampeng
  • Sirirat Kampeng
  • Trai Sunathvanichkul
  • Anchalee Minwong
  • Chusak Minwong
  • Chanaratt Thongskul
  • Supaowalax Thongskul
  • Anuchit Tongskul
  • Rina Tongskul

Crown lawyer Andrew Instone told Justice Simon France that for seven years between 2008 and 2015, the defendants were said to have worked together to evade the taxes of 14 companies they were in charge of.

That led to $12 million being omitted from their GST and income tax returns, he said.

The defendants were also accused of working together to evade their own and each other's personal income tax.

Mr Instone said it was alleged they did that by failing to declare cash payments by customers to their businesses.

"Instead of being accounted for in the normal manner, the cash was deposited by the defendants or their staff into each other's bank accounts.

"The funds were either used for personal purchases or returned to the businesses as 'funds introduced'.

"Often, sums would be transferred between different family member's bank accounts to ensure that each received their 'fair share'."

Just under $14m cash is said to have been identified in the defendants' personal bank accounts.

The Crown said the defendants' actions were a sophisticated and deliberate strategy both to evade the assessment or payment of income tax and GST, and to conceal the origin of the undeclared cash revenue, part of which should have been paid to Inland Revenue.

During the period the charges cover, the defendants' companies ran 28 restaurant businesses, many of which had some variation of the name "Thai House Express".

The first company the family founded was Louisa's Ltd, which opened a "Thai House" restaurant in Palmerston North in 1997.

Another of its companies opened a "Thai House Express" restaurant in Palmerston North in 2000.

After that, the business mushroomed.

Restaurants were opened in Whanganui, Hamilton, Hastings, Napier, Lower and Upper Hutt, Bulls, Wellington, Auckland, Masterton, Taupō and New Plymouth - although some have since closed.

Mr Instone said Inland Revenue investigators obtained till tapes from the defendants' businesses and by using those, were able to work out what their real cash position was.

Total losses for the defendants' group of businesses in the year the charges related to was $1.9m, but at some of those times, the family had considerable growth in their business operations, Mr Instone said.

The trial is set down for 10 weeks before Justice Simon France.