Antique goods land GST fraudster with prison sentence

The most recent development of Operation Protego, an ATO-led investigation, has left a GST fraudster with a prison sentence of two years and 11 months.

The fraudster, Joshua Merrett, was sentenced after obtaining over $390,00 in fraudulent GST refunds, attempting to obtain a further $330,000 and failing to comply with a court order.

Kath Anderson, acting deputy commissioner, said she commended the latest outcome under the ATO’s Operation Protego.

“There are no ifs, ands or buts here – if you don’t run a business, you don’t need an ABN and you cannot claim GST refunds. This is fraud,” she said.

“Fraud against the ATO is not tolerated and we continue the fight against criminals seeking to exploit the tax system.”

According to the ATO, Merrett was sentenced for one count of obtaining a financial advantage by deception, one count of attempting to obtain a financial advantage by deception and one count of failing to comply with an order.

The failing to comply with an order charge came from Merrett refusing to provide his phone passcode to the Australian Federal Police after his phone was seized.

It was found Merrett submitted 31 business activity statements between June 2021 and June 2022 containing false information about a business that specialised in staircase manufacturing and antique furniture repairs.

Merrett had registered an Australian Business Number for the non-existent company which resulted in $394,801 in refunds being paid within a three-month period, triggering an audit and account lock down.

The ATO also stopped Merrett from trying to obtain over $330,000 in GST refunds when he tried to avoid ATO auditors but “could not escape the consequences of his deceptive actions.”

Two months after the last GST refund was paid, ATO investigators and the Australian Federal Police conducted a search warrant at Merrett’s residence, which found no evidence of any commercial activity, sales, or purchases consistent with running a business.

“He was ordered to be released after serving one year and eight months into a recognisance to the sum of $1,000 on condition he be of good behaviour for a period of two years. He was also ordered to pay reparations to the amount of $392,917.74,” the ATO said.

“This conviction is not the end of the story for Mr Merrett. The debt from the fraudulent GST returns is still on his record and the ATO will continue to chase it down, which includes seizing any future refunds.”

It was noted that the ATO would continue to pursue those who committed fraud through criminal investigations and debt recovery actions to enforce repayment.

The ATO said as part of Operation Protego, it had taken compliance action against more than 57,000 alleged offenders and those involved in this fraud have already been handed in the order of $300 million in penalties and interest.

“The ATO reminds the community that GST fraud is not a victimless crime. Those who engage in this illegal activity are actively taking away funds that would otherwise be used for essential services such as healthcare, infrastructure, and education.”