A Melbourne man has been sentenced to nearly three years in prison after orchestrating a fraudulent GST refund scheme, resulting in the misappropriation of over $390,000. The sentence is the latest development in Operation Protego, an ongoing investigation led by the Australian Taxation Office (ATO).
Joshua Merrett, the individual convicted, was found guilty of obtaining fraudulent GST refunds by creating a fake business involved in staircase manufacturing and antique furniture repairs. Between June 2021 and June 2022, Merrett submitted 31 false business activity statements under an Australian Business Number (ABN) he had registered for the non-existent company.
The fraudulent activity resulted in the ATO paying Merrett $394,801 in refunds within a three-month period. However, the fraudulent claims triggered an audit and subsequent account lockdown by the ATO. In addition to the charges related to the refunds, Merrett faced a charge for failing to comply with a court order after refusing to provide his phone passcode to the Australian Federal Police when his phone was seized during an investigation.
Merrett was also caught attempting to fraudulently claim another $330,000 in GST refunds, though the ATO successfully prevented the payout. A search warrant executed at Merrett’s residence revealed no evidence of any legitimate business activity or transactions, further proving the fraudulent nature of his claims.
Kath Anderson, Acting Deputy Commissioner of the ATO, commended the outcome of the case, emphasizing the ATO’s commitment to cracking down on tax fraudsters. “There are no ifs, ands or buts here – if you don’t run a business, you don’t need an ABN and you cannot claim GST refunds. This is fraud,” she stated, reaffirming the ATO’s zero-tolerance policy toward fraud.
In addition to the prison sentence, Merrett was ordered to repay $392,917.74 in fraudulent GST claims and was released on a $1,000 recognisance bond, requiring him to be of good behavior for two years. Despite serving one year and eight months in prison, Merrett’s debt to the ATO remains unresolved, and future refunds may be seized as part of ongoing debt recovery efforts.
As part of the broader Operation Protego, the ATO has taken action against over 57,000 alleged offenders and has levied approximately $300 million in penalties and interest. The ATO underscored the significant impact of GST fraud on the community, noting that funds misappropriated through illegal schemes like Merrett’s would otherwise be allocated to essential services such as healthcare, infrastructure, and education.
The ATO’s crackdown on tax fraud continues, with an emphasis on both criminal investigations and efforts to recover fraudulent debts.
