Thai restaurateurs’ $4.4m tax dodge alleged in hiding cash sales
Eleven Thai restaurateurs failed to declare $12 million cash income, drove luxury vehicles, had designer handbags and Rolex watches, prosecutors allege.
At the High Court in Wellington on Monday, the 11 pleaded not guilty to 64 charges of evading or attempting to evade income and GST tax, filing false tax returns, and money laundering.
Prosecutor Andrew Instone said for seven years up to 2015 the 11 acted together to evade income tax and GST of $4.4m from 14 companies that operated 28 restaurants in Auckland and the lower North Island, including Palmerston North, Masterton, the Hutt Valley, Whanganui, Hawke’s Bay, and New Plymouth.
Personal income was also not properly declared by all but one defendant, it was alleged.In total about $12m cash sales were missing from tax returns, and of that about $9.9m was banked directly into personal bank accounts, with the remainder being spent as cash, Instone said. In a written summary of its case, the Crown said their spending was inconsistent with their declared income.
Notwithstanding low declared incomes, the defendants collectively owned 10 properties, a number of luxury vehicles, and other luxury goods including Louis Vuitton and Gucci handbags, Rolex and Tag Heuer watches and assorted jewellery, it was alleged.
They also travelled extensively, the Crown alleged.
On trial were: Boonrouen Thongskul, 59; Sirirat Kampeng, 54; Vattanachai Kampeng, 54; Trai Sunathvanichkul, 31; Trin Sunathvanichkul, 33; Chanaratt Thongskul, 51; Supaowalax Thongskul, 43; Anchalee Minwong, 57; Chusack Minwong, 51; Anuchit Tongskul, 50; and Rina Tongskul, 49.
There are five siblings, and the others are spouses or adult children. The Crown alleged Boonrouen Thongskul had a leading role in directing what happened to the pooled family funds.
The trial, before Justice Simon France sitting as a judge alone, is expected to take about 10 weeks.
Over the period of the charges, the businesses grew significantly and that may form part of the motive for the offending, Instone said.
The Crown alleged that $3.1m was transferred between family members’ bank accounts to ensure each received a “fair share”. It was a sophisticated and deliberate strategy to evade assessment or payment of tax, and conceal the origin of the undeclared cash.
The business had begun in Palmerston North in 1997. Many of the businesses traded under some variation of the name Thai House Express. Despite the growth of the businesses losses were consistently declared over the years the charges covered.
Inland Revenue started investigating two of the companies in 2006. Tax authorities were told that the businesses were getting funds from Thailand. From that early investigation shortfall penalties were imposed and family members and their accountants were reminded to declare cash sales and keep proper records.