Community detention for made up tax returns and COVID fraud

An Auckland beneficiary was sentenced to community detention on tax and COVID fraud charges.

Kesalina Hakaraia was sentenced in the Auckland District Court on 25 July to six months community detention.

Hakaraia told Inland Revenue in April 2020 that she was self-employed and had been since 2019.

In May 2020 Hakaraia filled out an income tax return for the 2020 income year, which included her benefit income, nearly $6,000 in self-employed earnings and $25,000 in expenses, resulting in an income tax refund of $2,528.43.

On 14 June 2020 she amended her auto-calculated income tax return for the 2019 income year (which originally included only her benefit income), claiming that she had earned $9,800 and had incurred expenses of $22,800. The amendment increased her tax refund by $1,775.34. 

The information in her 2020 income tax return and 2019 income tax return amendment was false and was provided deliberately to get increased income tax refunds.

In May and June of 2020 Hakaraia incorporated three companies, Faded Banditry Ltd (FBL), Faded Offset Ltd (FOL) and Offset Banditry Ltd (OBL).  

Hakaraia applied for Small Business Cashflow Scheme loans (SBCS) in the name of each of the companies, each time declaring that the company was operating a viable business and had suffered a 30% decline in revenue.

All of the SBCS applications submitted by Hakaraia were false as none of the companies had any business activity. or had suffered a 30% drop in revenue.

The offending was premeditated and occurred over a period of approximately 10 months. 

The total amount of income tax refunds wrongfully obtained by Hakaraia was $4,303.77 as well as $11,800 in SBCS funds.

The total amount of SBCS funds she attempted to fraudulently obtain was $35,400.

The Judge ordered reparation of  $16,103.77 at a rate of $20 per week.