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A key conspirator of an elaborate multimillion-dollar tax evasion scheme has now been sentenced to six years in jail.
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Tax evasion promoter jailed after 19-year investigation
18 August 2020
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The District Court of Queensland heard that Philip Northam was a key promoter of an intricate tax evasion scheme which was designed to strip Australian companies of their assets and leave them in a position where they were unable to pay their tax liabilities.
Along with four others, Mr Northam concocted a way for companies to transfer all assets of the company to its previous controllers, leaving the company an empty shell which was unable to pay its tax debts.
Once the assets of the company were stripped, new straw directors and shareholders were put in before the company was wound up, leaving the entities with no means to pay the tax liabilities.
A total of 15 companies took part in the scheme, putting $4.59 million in taxes at risk, but the ATO managed to recover most of it.
A tip-off by a tax agent brought the scheme to the attention of the ATO in early 2000, with the case referred to the Australian Federal Police (AFP), resulting in criminal investigations by 2001.
Mr Northam, who lived in Vanuatu for a number of years, was finally arrested in November 2018 when he re-entered Australia, after an AFP warrant was issued in 2008.
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The 60-year-old is the final person to be sentenced, following the sentencing of his co-conspirators Ian Sidney Henke, Robin David Huston, and Brian Francis Fox in 2011, and Clarence Lawry Marae in 2013.
ATO assistant commissioner Aislinn Walwyn said the sentencing was a result of a 19-year investigation by the Tax Office and the AFP.
“This sentencing shows the tenacity and persistence of the ATO and our partner agencies to hold enablers of illegal schemes to account and to secure an outcome for the benefit of honest taxpayers. It also goes to show that tip-offs from the community do pay off,” Ms Walwyn said.
“Tax crime is not victimless. This arrangement was set up to deliberately evade paying tax, which is money that could have otherwise been used to fund vital public services that the community relies upon.”
AFP Northern Command Assistant Commissioner Lesa Gale said Mr Northam’s sentencing highlights the commitment of the AFP and its partners to targeting those seeking to defraud the Australian public.
“We have a duty to the community to see matters like this through to prosecution, and bring people to account for their criminal activities,” Ms Gale said.
“Tax fraud can make for a complex investigation, but the AFP remains up to the challenge and is grateful for the specialist expertise of our partners through the Serious Financial Crime Taskforce that allows investigators to investigate these matters thoroughly and effectively present these matters before the courts.”
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