Company director facing jail for $500k tax fraud

Steven Morrow set up three different companies in an attempt to avoid paying his tax debts. Photo / File

A Hamilton company director has pleaded guilty to 40 tax fraud charges totalling more than $500,000.

Steven Wayne Morrow is now behind bars pending his sentencing in the Hamilton District Court on the offending, in which he admitted failing to pay the PAYE he had deducted from his employees, which provided piling and re-piling services for residential and commercial properties around the North Island and in Christchurch, during the re-build after the earthquakes, between 2011 and 2015.

However, aggravating the 49-year-old's situation - which will likely see him jailed - is the fact he's defrauded Inland Revenue back in 2009 for which he was sentenced to community detention.

Instead of paying his PAYE, an analysis of his bank accounts by Inland Revenue found he clocked up significant personal expenditure on various company cards, paid his own debts, transferred more than $100,000 to his personal account, made cash withdrawals in excess of $30,000 and transferred more than $350,000 between his various companies.

In total, Morrow owned three different piling companies, however they were all set up after the other was busted by the Inland Revenue.

The first company was Groundtech Solutions Ltd, which was incorporated in 2010.

Despite being sent 34 statements about his PAYE arrears, Morrow failed to pay $95,646.96 between July 2012 and March 2014.

He paid $15,472.35 late, leaving $86,122.88 outstanding.

In 2012, he set up Repiling Specialists NZ Limited and registered it for PAYE on April 1, 2014 and employing staff from the same date.

For 12 monthly periods until April 2015, he again ignored his PAYE requirements racking up $211,070.99 - including penalties and interest - in arrears before the company was liquidated a month later.

A month before being liquidated, in March 2014, Morrow set up South Pacific Repiling Specialists Ltd.

But again, despite registering the company for PAYE he never paid any and clocked up a further $70,534.84 in arrears.

When questioned by Inland Revenue, Morrow admitted making the necessary PAYE deductions but never paid them to the IRD as the monies were used to pay other creditors or to buy supplies for the business.

In total, Morrow's actions resulted in the misappropriation of $345,896.26 of Inland Revenue's money but when including penalties and interest that totalled $529,755.51.

Morrow continued to offend while on bail, resulting in a further charge, breaching his bail conditions by failing to surrender his passport after threatening to flee to the Philippines if prosecuted.

Morrow, who has also been bankrupt twice and had four previous companies liquidated, was convicted for tax fraud in 2009 of $53,443.00.

Judge Merelina Burnett convicted Morrow on all charges and remanded him in custody for sentencing on July 22.