SME owner cops eight-year jail sentence for scamming ATO out of $5.8 million

A small business owner has been handed an eight-year jail sentence for defrauding the Australian Tax Office of $5.8 million.

Martin Douglas Aitchison  will serve a minimum of five years behind bars after Victorian County Court judge Meryl Sexton ruled he “demonstrated a level of greed” by lodging false business activity statements (BAS) with the ATO between 2008 and 2012, reports Fairfax.

Aitchison pleaded guilty to three charges of obtaining a financial advantage by deception and one charge of attempting to obtain a financial advantage by deception.

The court heard Aitchison, who previously operated a small trucking company called Aitchison Heavy Hauling, lodged the false documents purporting to show tax paid on fuel purchases through a family trust and over the four-year period was refunded around $5.8 million by the ATO.

Aitchison allegedly told the ATO he operated a fleet of between 100 and 200 trucks but in fact only owned one truck and one trailer.

According to News Limited, Aitchison first made the false petrol claims in 2008 when three false claims led him to receive $400,000 from the ATO. He went on to claim more than $2 million in 2011 and more than $3 million in 2012.

In one incident, he lodged 19 false tax invoices in a bid to show his company purchased 1,250,000 litres of fuel from MOBIL for his company but after an ATO audit in 2012, MOBIL advised the ATO no fuel had been delivered to Aitchison’s address.

After this incident, Aitchison went on to claim a refund for another $600,000 but the claim was rejected.

Judge Sexton heard Aitchison used the cash to fund a lavish lifestyle, including upgrading his family home, purchasing property on the Gold Coast and in New Zealand and buying other luxury items, including a houseboat and a Mercedes-Benz car for his wife.

While Sexton found Aitchison was trying to provide for his family, his actions mean his family will be worse off in the long-run.

“Stealing from the Commonwealth means the government has less to spend on services such as payment of pensions that your wife will now have to receive,” she said.

According to documents lodged with the Australian Securities and Investments Commission, Aitchison placed Aitchison Heavy Hauling into liquidation in April 2013.

The ATO has reportedly recouped $2 million from the liquidation process.

Gary Gill, head of forensic accounting at KPMG, told SmartCompany it is likely the fraudulent invoices were discovered as a result of the ATO’s internal data analytics systems.

“I imagine they would have quite sophisticated data analytics to look for unusual transactions and if taxpayers are regularly receiving refunds,” Gill says.

While Gill says the case is “certainly unusual”, it shows the myriad of ways fraud can be conducted.

“At the end of the day, if you create false documents and put in the claims, some people are able to succeed,” he says.

The Australian Tax Office declined to comment on the case when contacted by SmartCompany.