Nearly $37,000 was paid into bank accounts under an Auckland woman's control from the Covid schemes. File photo. Photo: 123RF
A run of fraud cases involving money taken from Covid-19 support cases reflects the "high trust" nature of the schemes, one tax expert says.
Inland Revenue said on Tuesday that an Auckland woman had been sentenced to two years' prison on tax fraud charges.
Caitlin Briar Ashby faced 18 charges, some of them representative, of using documents with intent to obtain a pecuniary advantage from income tax returns, GST returns and applications to two Covid-19 support schemes.
She was given leave to apply for home detention if a suitable address where she could live was found.
Ashby set up three bank accounts using false identities and filed 64 false income tax returns for 14 different taxpayers.
She made two false GST returns, two false Small Business Cashflow scheme loan (SBCS) applications, one of which was paid out to Ashby and the other of which was declined, and one false Resurgence Support Payment (RSP) application.
The SBCS and RSP schemes were set up to help businesses through Covid-19.
Nearly $37,000 was paid into bank accounts under her control from the Covid schemes.
Inland Revenue and the Ministry of Social Development have been taking action against others who abused the schemes.
Earlier this month, IR said it had prosecuted 14 people so far. It has been given more funding for audit and debt collection work.
MSD said its action had led to 46 people being sentenced. Another 49 people were still before the courts.
Earlier this month, an accountant was sentenced nearly six years jail for a $1.7 million Covid-19 fraud.
Robyn Walker, a tax partner at Deloitte said this was the result of the schemes being designed as "high trust".
"The priority at the time was to get money out to businesses which needed it quickly, which to some extent meant that the level of scrutiny on applications was not as high as they might ordinarily be. The priority was to get the support to those who were entitled rather than holding everything up with a slow approval process.
"While many of the public cases we are seeing are examples of clear fraud, there were also some semi-subjective criteria, meaning that some issues are arising where there are differing views about whether the entitlement criteria were met - for example different views on whether turnover drop criteria were met based on choices around comparator periods."
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