"They might bankrupt me, so what?" says John George Russell. Photo / Jason Oxenham
"They might bankrupt me, so what?" says John George Russell. Photo / Jason Oxenham
Opinion by
John George Russell is resigned to losing next round in long tax fight.
John George Russell - accountant, former merchant banker, 81-year-old and some $500 million in debt to the IRD - is finally raising the white flag.
Inland Revenue's so-called "public enemy number one" says he won't challenge the bid to bankrupt him, which is due to come to the High Court next month.
Russell, who developed an infamous template the Court of Appeal called a "blatant tax-avoidance scheme", was issued a $75 million bill in 2003 when $15 million earned by companies between 1985 and 2000 was reassessed to him personally.
That amount, of which only $5 million is core tax, has now ballooned to almost $500 million thanks to penalties and compound interest.
After the IRD got a High Court judgment against Russell last year, he took numerous legal steps to try to get the tax department to accept a proposal that he pay back his debt at a rate of $1000 a week until he dies.
These efforts failed and a judge last month said the offers were the only thing that stood between him and bankruptcy.
Russell is still adamant he's in the right, but says he won't bother appearing in court when the bankruptcy application is called.
"It's a fait accompli really," he told Business Insider this week. "I know in advance what the court's going to decide so there is no point in turning up. They're actually saving me money. I'd been spending a lot of money trying to get them to take $1000 per week - well, it works out at $1460 all up (including tax on earnings) - and they don't want to take it," he said from his Kawakawa Bay home.
Despite the looming bankruptcy, Russell appeared to Business Insider to be in good spirits.
"I'd rather not be bankrupted and that was basically why I'd resisted all along but it's a minor consequence in my particular case," he said.
He also reckons he has won the battle with his old foe.
"When you look at it, they've made fools of themselves and they look stupid because they've spent huge amounts of money getting nowhere.
"They might bankrupt me, so what? Hundreds of people get bankrupted every day."
That may be so, but Business Insider suspects more than a few tax officials will be celebrating if next month's hearing goes as expected.
Winning record
The odds were always against Russell, given how often IRD wins in the courtroom.
The tax department's litigation success rate was marginally higher in 2015 than the year before at 84 per cent, well above its own internal target of 66 per cent.
The IRD said that 62 of the 74 cases before the courts in the year to June came down completely in the department's favour.
"We are confident our interpretation of the law is correct before we take any case to court and the number of judgments in our favour reflect this," Inland Revenue said in its annual report, released this week.
If you don't like the answer, stop asking the question. That appears to be the trick at the Serious Fraud Office, which has scrapped a survey after a plunge in sentiment among the victims of financial crime.
The biennial questionnaire asked those who complained about or were victims of fraud whether the SFO's actions make a difference and help deter serious financial crime.
In 2012 around 65 per cent of respondents thought so. Two years later only 38 per cent did.
But under present director Julie Read, the measure has now been "discontinued".
"The Complainants and Victims Survey has been discontinued following an evaluation of its usefulness and/or potentially confusing messages," the organisation said in its latest annual report. "Victims' responses to how well we are performing our role can be influenced by factors over which we have no control.
"Although SFO prosecutions can involve hundreds or even thousands of victims, we do not hold responsibility for some factors that are understandably important to victims, e.g. deciding penalties and recovering losses."
Julie ReadJason Dean's former employer wants his Mairangi Bay house. Photo / Jason Oxenham
A New Zealander living in China has been barred from defending a $12.65 million High Court case brought against him by his former employer, which accused him of embezzling company funds.
Jason Dean and his wife Juan Chen, formerly represented by Queen's Counsel David Jones, have failed to pay $37,283 in costs to Americhip or meet disclosure orders by a specified deadline.
This means they are blocked from defending Americhip's action, which aims to recover the allegedly stolen millions.
Dean worked for California-headquartered Americhip for nine years in China and is accused of buying a $2 million home on Brighton Terrace in Mairangi Bay with some of the funds he allegedly stole.
Americhip this month successfully appointed receivers to take charge of the house, which is now being rented out.
