Some Masala restaurant workers were paid as little as $2 an hour.
Some Masala restaurant workers were paid as little as $2 an hour.
Thirty three properties are tied up in a $34m asset freeze -- New Zealand's biggest such case, writes Hamish Fletcher
Upmarket Remuera residences, humble Papakura units, sprawling semi-rural sections and a string of restaurants are all tied up in a $34 million asset freeze - believed to be the biggest cache of property ever restrained by police.
Thirty-three properties, with values ranging from $340,000 to $3 million, are on ice after allegations that companies and people linked to Auckland's Masala restaurant chain committed "systematic" tax evasion, breached immigration laws and violated employment standards.
Some of the Indian food chain's outlets have been sold and are operating under new ownership, with new names, after admissions that Masala workers had been paid as little as $2 an hour.
It has now emerged that Inland Revenue alleges 17 companies that owned Masala restaurants under-reported earnings to evade paying more than $7.4 million of tax.
The tax department, according to the High Court ruling restraining the assets, has identified Masala founder Rupinder Chahil, the restaurants' co-controller Joti Jain, manager Rajwinder Grewal and company director Supinder Singh as principal persons of interest in its probe.
"I believe that the parties and companies involved in the financial operations of the Masala chain of restaurants, including Mr Chahil, Ms Jain, Mr Grewal and a number of relatives of those parties, have been involved in evading the assessment and payment of tax by systematically stripping cash from the restaurants and neither declaring cash sales in GST returns, nor returning cash income to [IRD]," Inland Revenue investigator Elena Bryleva said in an affidavit. In that affidavit, Bryleva alleged Singh also evaded tax and personally owes IRD almost $750,000.
Justice Rebecca Edwards, in a ruling made public this month, said this and other evidence established reasonable grounds to believe that Chahil, Jain, Grewal, Singh and the Masala group had been involved in significant criminal activity.
I believe that the parties and companies involved in the financial operations of the Masala chain of restaurants, including Mr Chahil, Ms Jain, Mr Grewal and a number of relatives of those parties, have been involved in evading the assessment and payment of tax by systematically stripping cash from the restaurants and neither declaring cash sales in GST returns, nor returning cash income.
The police, who made the successful bid to freeze the assets, were also able to convince Justice Edwards there were reasonable grounds to believe that the eight companies which own almost all of the 33 properties had unlawfully benefited from this alleged criminal activity because of their links to the people in the case.
The police also persuaded the judge to restrain the assets without hearing arguments from the companies or the named individuals, claiming there was a risk property could be concealed or disposed of if this happened.
Because of this, those on the receiving end of the allegations have not had a chance to respond to them.
Respondents named in the restraining orders appeared in the High Court at Auckland this week and have indicated they oppose the freeze staying in place, according to a lawyer familiar with the case.
The people:
• Joti Jain
The co-controller of the Masala chain, Jain was sentenced last October to 11 months' home detention after admitting immigration and exploitation charges. She is also banned from managing a business until that term is up.
Jain was the main target of a sting which found she had significantly underpaid four employees and strung them along with the promise of letters which would help them obtain a visa.
Joti Jain (left) and Rajwinder Grewal. Photo / Dean Purcell
According to Immigration New Zealand, one of the victims worked 66 hours a week for three months at Masala Takapuna and was paid $3 an hour. The worker was also told to clean Jain's house.
Jain, according to the High Court decision, lives at the second most expensive of the frozen properties - a Remuera house valued at $2.7 million.
Meetings were allegedly held at this four-bedroom, three-bathroom home where restaurant managers would give cash to Jain, as well as reconcile the till and cashbook.
Jain's residence and four other properties are held by a company called Investments Ltd. Police allege Jain has an undisclosed interest in these properties and has control of that firm's financial affairs.
Inland Revenue records allegedly show that Jain made numerous payments to Investments Ltd from her personal account, which appear in turn to have been funded by deposits from Masala-related companies.
Police believe some of the funds Jain contributed to Investments Ltd are likely to be undeclared income she received from the restaurants.
The contents of two safety deposit boxes held in Jain's name are among the assets restrained by police.
• Rupinder Chahil
Chahil is the founder of the Masala chain, which grew to have about 10 restaurants across Auckland since it was launched in 2002.
Police believe that neither she nor the company earned sufficient income to buy the three properties in question.
• Rajwinder Grewal
Grewal, Chahil's brother-in-law, is a director of companies linked to the Indian food chain.
Once the manager of the Bucklands Beach Masala, Grewal was sentenced to four and a half months' home detention in October after admitting exploitation charges and aiding and abetting two workers to either breach their visa conditions or remain in New Zealand unlawfully.
He is the director of two companies which hold frozen properties, one of which police allege was bought with funds from Masala-related entities.
Grewal's partner, Divyapreet Kaur, is also caught up in the restraining orders. A beneficiary, Kaur is the listed owner of a Royal Oak property where Grewal is also believed to live. Grewal bought this property in 2006 and held it until shortly before he was charged with immigration offences.
Justice Edwards said the evidence before her showed neither Kaur nor Grewal had earned enough income to have bought or maintained the property.
"There are reasonable grounds to believe that that Ms Kaur may have unlawfully benefited from the criminal activity by having this property transferred into her name," the judge said.
Items in a Westpac safety deposit box held in Kaur's and Grewal's names were also frozen by police.
• Supinder Singh
Singh is a director of companies holding more than 20 of the frozen properties, including Jain's and Chahil's homes and five Masala premises. The Companies Office records him as living in a $1.7 million East Tamaki property that is also caught by the police freezing orders.
The properties:
The 33 frozen properties are scattered across Auckland - from Kumeu to Whangaparaoa, from Bucklands Beach to Papakura.
About half are residential, the most expensive being a $3 million house in Remuera's Ridings Rd. Jain's, Chahil's and Singh's homes are among the more valuable restrained assets, as is a 2ha block of land in Takanini.
58 Bell Rd, Remuera, one of the 33 frozen properties across Auckland.
Among the commercial properties targeted by police, as many as seven are believed to be restaurants and five are the premises where Masala outlets operated.
Four of the restrained houses are also suspected to have been used as accommodation for Masala staff.
While the Weekend Herald could not pinpoint which of the properties this could have been, some of the frozen houses are on the same streets as Masala restaurants, or very close by.
Although the total value of the properties is in the tens of millions, nearly all are mortgaged. Police estimate the total equity in the 33 properties is just shy of $7 million.
