Phillip Smith fooled judge over jail tax scam

Phillip Smith was arrested at a hostel in Brazil. Photo / AP

Fugitive killer’s sentence discounted after his ‘articulate and insightful’ letter to court.

The last time convicted murderer and paedophile Phillip John Smith was in court, two years ago, he convinced a judge he would not offend again.

Judge Anne Kiernan was so impressed with his "insight" she discounted the sentence he faced for committing four years of tax fraud.

The offending from behind bars saw Smith's jail term increased by 15 months but it might have been longer had it not been for his "articulate and insightful" letter to the court.

Yesterday the Ministry of Social Development confirmed Smith, also known as Phillip John Traynor, received living costs of $26,700 from 2003-08 while getting a student loan.

The court file for his offending against IRD was released to NZME. this week and shows how he ripped off taxpayers between 2006 and 2010.

While an inmate at Manawatu and Hawkes Bay prisons, Smith used the details of a dozen inmates to claim $43,068 in Working for Families tax credits and income tax refunds. All but two of them knew about the scam.

He even created nonexistent children and documented fake expenses to increase the cash haul.

At sentencing, Smith's letter to the court said he was a changed man.

"You say ... you have finally been liberated from the type of thinking that leads to criminal offending," the judge said.

The Auckland District Court file shows Smith used a prison phone to contact IRD on 48 occasions in a 10-month period and the scale of the fraud was uncovered only when the department was contacted by an anonymous informant.

Police searched his cell and found Inland Revenue tax guides and bank account numbers, along with piles of handwritten notes.

After a large investigation, 12 charges of obtaining by deception (two as a party) were laid in March 2012 and five months later Smith was sentenced.

Judge Kiernan was impressed with his progress, particularly since he had completed the Te Piriti - specialist child sex-offenders programme - at Paremoremo Prison.

Smith said he gave half of the money to other prisoners and kept half for himself but the judge said there was no proof of that.