Community Detention For Tax Fraud

An Auckland man was sentenced to community detention for tax fraud after falsely claiming COVID relief money.

Vaibhav Kaushik was charged with using a document to claim a pecuniary advantage and was sentenced in the Auckland District Court on 13 February this year.

In April 2020, the Government announced a new Small Business Cashflow Loan (SBCS) to support small businesses adversely affected by the COVID-19 pandemic. Applications opened from 12 May 2020.

There were a number of criteria to be eligible for the loan, including that the business must be viable and ongoing, and the loan must be used for the business and not given to the shareholders or owners for personal use.

In July 2020 Kaushik applied for a loan under another person’s name which was paid into a bank account listing that person as the account holder. Immigration records showed the named person had left New Zealand seven years earlier and had not returned.

Inland Revenue’s investigation found that Kaushik had set up the other person’s myIR account, filed an income tax under that person’s name and then made the loan application. Enquiries established that the IP address used to file the income tax return and the loan application online was linked to Kaushik’s home.

Kaushik followed a similar process with a different man’s name. That man left New Zealand in 2017 and had not returned. An associate in India was also involved in both cases.

Kaushik benefitted financially from the $23,600 paid out and used it for personal items and gambling.

The sentencing judge said the offending had many elements of greed to it and declined the defence lawyer’s application for a discharge without conviction.

Kaushik was sentenced to six months community detention – the maximum allowed – and the judge ordered reparation to be paid in full by 1 April 2025.

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