A developer who conspired to defraud the Commonwealth of tax income by issuing inflated invoices from one company to another has been sentenced to 10 years in prison, bringing one of Australia's longest tax fraud investigations to a close.
Hightrade Group executive Li Zhang was extradited to Australia from New Zealand in 2019 after a 10-year absence, having fled the country in 2009 as search warrants were issued for his business, home, and the residence of an employee Peter Chang who would later be convicted of fraud.
Shortly after the turn of the Millennium, Zhang's Hightrade was contracted to build a luxury resort and golf course for Intercontinental Hotels in NSW's Hunter Valley - a project in which his group utilised inflated and false invoices that were issued to an affiliated company in order to reduce its goods and services tax (GST) burden.
It is a practice that took place between 2002 and 2007, sparking an Australian Tax Office (ATO) investigation that began in 2008 after five years of audits, prompting the execution of search warrants that triggered Zhang's abscondment.
His exact whereabouts over the course of the decade that ensued is unknown, although at the time of his extradition the NZ Herald reported he had been living in a rental property north of Auckland and was believed to have also spent time in Hong Kong.
Today Zhang has been sentenced to 10 years in jail with a non-parole period of 6 years and 8 months, for conspiring with the intention to cause a loss to the Commonwealth of $15 million.
ATO Assistant Commissioner Jade Hawkins has welcomed the sentencing.
"Mr Zhang conspired to lodge fraudulent BAS on behalf of two companies which he was involved with. These companies were part of the Hightrade Group, which developed high-profile properties in the Hunter Valley and Sydney regions," Hawkins said.
"The fraud involved the use of multiple related companies that grossly inflated construction costs between themselves, and ultimately failed to remit the GST to the ATO. There were also claims of company purchases that simply didn’t exist.
"The sentencing of Mr Zhang, shows that no matter where you are, we will find you and hold you accountable for your actions."
Zhang’s conviction for two counts of conspiracy to defraud the Commonwealth followed his extradition from New Zealand, undertaken with assistance from the Australian Federal Police and the Commonwealth Director of Public Prosecutions.
"Tax crime affects the whole community. This was not an ordinary business operating legitimately – it was outright tax fraud. Mr Zhang undermined genuine businesses by heavily under-quoting, and he left business creditors and employees without their entitlements,” Hawkins said.
"We are committed to ensuring the integrity of the tax and super system as well as levelling the playing field for businesses who do the right thing. Tax fraud also reduces the amount of revenue available to fund essential community services, like health and education."
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