Money launderer gets nine months at home

The Wellington High Court sentenced Walter Law (also known as Xu Liu) to nine months home detention and 200 hours of community service on a number of charges amounting to $350,000.

The 45-year-old man had pleaded guilty to five charges of tax evasion, six charges of providing false Income Tax returns, 21 charges of aiding a company to file false GST returns, one charge of aiding a company to file false Income Tax returns and five charges of aiding a company to evade tax. Law also pleaded guilty to one charge of money laundering under the Crimes Act.

Inland Revenue Department (IRD) Assurance Manager Investigations Tony Morris said that the defendant conducted his activities using separate companies and unregistered entities, which he owned or controlled.

“Our initial investigation into one of Mr Law’s companies (Holiday KTV Entertainment Limited) revealed that significant amounts of cash were unaccounted for and the company had only reported its EFTPOS transactions to IRD. Our subsequent analysis showed the Company had evaded GST amounting to just over $68,000, PAYE of over $41,000 and Income Tax amounting to over $29,000” he said.

The Court heard that IRD’s investigation into Law’s foreign exchange and travel businesses revealed that he deposited $2.5 million into bank accounts in the name of two overseas home stay students.

The students said that Law had control of these accounts and they had no knowledge that the funds were used to repay loans on properties owned or controlled by Law.

“Mr Law’s foreign exchange and travel businesses made a surplus of $540,000 between 2004 and 2010. These entities not only failed to return around $170,000 in Income Tax to IRD but these funds were deposited into the students’ bank accounts and re-characterised as loans from a private trust in China. This money was the undeclared income from the business transactions and this action amounted to money laundering,” Mr Morris said.

He said Law’s offending resulted in a loss to IRD of just over $350,000, although since been recovered.

“Mr Laws deliberately tried to evade his tax obligations by not declaring his income and hiding cash in other people’s bank accounts. This case is a further reminder that IRD is using increasingly sophisticated analysis to detect those trading in the hidden economy.

“Businesses and individuals doing the right thing can be confident that IRD will detect those evading their obligations and those cheating on their taxes should be aware that we will take action when we detect deliberate non-compliance,” Mr Morris said.

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