Two men involved in an elaborate gold fraud scheme that was defended as being “all about scientific research” have been jailed for eight years for their roles in the A$40 million (US$26.87 million) tax scam.
Jonatan Kelu and Cedric Adrian Millner were convicted in July on two counts of conspiring to cause loss to the Commonwealth using an elaborate GST-evasion plot.
Justice Richard Cavanagh on Friday handed the men identical eight-year jail terms in the NSW Supreme Court for their roles in the “repeated acts of dishonesty.”
The pair were involved in a fraud that operated between 2012 and 2013, when they bought gold without paying GST as the precious metal was more than 99 percent pure.
The duo then melted the gold and resold it as a powder to Melbourne company Focus Gold.
They then claimed they had paid taxes on the initial purchase and requested an offset from the Australian Taxation Office.
The ATO refunded the pair more than $40 million before they were arrested and charged in 2018.
Mr. Kelu repeatedly denied the scheme was for financial gain and instead claimed it was a “large-scale scientific endeavour.”
But Justice Cavanagh described as false the 48-year-old’s belief that the prosecution was based on “a very big misunderstanding,” adding his diagnosis of autism-spectrum disorder did not preclude his intelligence or cognitive ability.
Mr. Millner, 56, was described as showing no remorse or contrition despite a last-minute delay to sentencing in November in order to engage with the Australian Federal Police to recover some of the defrauded funds.
It is not known what happened to the substantial difference between the GST claimed and the actual sum of about $16 million recovered.
Justice Cavanagh said it was also impossible to discern which of the offenders had come up with the scheme and who undertook what steps.
In contrast to many fraud cases, he noted neither Kelu nor Millner lived a lavish lifestyle on the proceeds of the crime and instead engaged in the community volunteering much as they had prior to their offending.
“I have not found any case to be identical to this one,” Justice Cavanagh said.
With time already served, Kelu and Millner will be eligible for parole in 2028.
John Ford, chief of the ATO-led Serious Financial Crime Taskforce, said it had been concerned about precious metal fraud for some time.
“In this case, these individuals thought they were clever and could get away with rorting Australians out of revenue that could ultimately have been put towards essential services such as health and education,” Mr. Ford said in a statement.
“This outcome sends a clear message to the community that we have robust systems in place to stop all forms of financial crime, including those that involve gold bullion.”
Participants in gold bullion fraud have included refiners, bullion dealers, gold kiosks, dealers and buyers.
But since April 2017 new laws have reverse charged GST on gold supplies to refiners, traders and other businesses that purchase scrap gold, silver and platinum.
