CORPORATIONS LAW OFFENCES

OFFENCES INVOLVING OFFICERS AND DIRECTORS

The Corporations Law Act 1984 prohibits and criminalises certain conduct by officers and directors of Corporations. An officer or director of a corporation has a special duty to act honestly and in the best interests of the corporation.

A director or other officer of a corporation commits an offence if they are reckless or are intentionally dishonest or fail to exercise their powers and discharge their duties in good faith in the best interests of the corporation.

Likewise a director, other officer or employee of a corporation commits an offence if they use their position dishonestly with the intention of gaining an advantage for themselves, or someone else, or causing detriment to the corporation.

Further, a person who obtains information because they are, or have been, a director or other officer or employee of a corporation commits an offence if they use the information dishonestly with the intention of gaining an advantage for themselves, or someone else, or in causing detriment to the corporation.

The Act also criminalises certain personal conduct in circumstances where the nature of the corporations business requires that person to hold a financial services licence – such as the provision of financial advice. For example it is a criminal offence under the Act to provide such advice without a licence.

TAX OFFENCES

In Australia, the tax system is a self-assessment environment, and it relies on taxpayers acting honestly when they comply with their tax obligations. The Commissioner of Taxation has the power to ensure compliance with the tax laws, and is able to apply penalties including administrative penalties and prosecutions.

If you have committed a criminal tax offence, proceedings against you can be initiated by the Australian Taxation Office (ATO) or the Commonwealth Director of Public Prosecution (CDPP).

The law provides for a range of taxation offences, such as:

  • Making false and misleading statements;
  • Failure to correctly keep accounting records;
  • Failure to lodge taxation returns or activity statements;
  • Failure to pay tax or remit the tax deductions of employees.

In more serious cases, taxpayers can be prosecuted for offences involving fraudulent conduct under the Commonwealth Criminal Code 1995.  When the ATO or CDPP decide to prosecute, they consider a number of different aspects, including the seriousness of the offence, the circumstances of the taxpayer, and whether or not the prosecution could act as a deterrent to the wider community.

There are a number of different tax evasion offences under the law. Some of these offences include:

  • Failure to lodge certain documents, such as tax returns, are legally required to be lodged;
  • Failure to Declare Assessable Income - most income earned in Australia is taxable, and has to be declared to the ATO. Not reporting this income can lead to heavy penalties, including jail time and fines;
  • Failure to Pay Tax Instalments.

Tax fraud encompasses a range of frauds, including GST Fraud and Activity Statement Fraud. Simply, tax fraud occurs when you misrepresent assets, income, or deductions to the ATO in an attempt to lower your taxation responsibilities. Some tax fraud offences include:

  • Claiming Unauthorised Deductions;
  • Falsifying Documents;
  • Falsifying Business Activity Statements.

The ATO takes tax fraud offences very seriously and will in most cases result at the very least in a serious fine, and in serious or repeated offending, may result in imprisonment.

SOCIAL SECURITY / CENTRELINK OFFENCES

Offences of this kind refer to the obtaining of a benefit from the Commonwealth Government where there is no entitlement. A person is guilty of an offence of this kind if the person engages in conduct and as a result of that conduct, the person obtains a financial advantage for himself or herself from another person and the person knows or believes that he or she is not eligible to receive that financial advantage.

One of the most common ways people are alleged to have defrauded the government is by not correctly declaring income from employment. For example, they either fail to advise Centrelink that they are employed, or they declare some income but the amount declared is under the actual amount earned.

Other ways in which Centrelink Fraud offences can be committed include:

  • Failing to declare a partner’s income
  • Failing to advise Centrelink that you are living as a member of a couple
  • Claiming benefits under multiple names or identities
  • Continuing to claim benefits for children no longer under your care
  • Continuing to claim benefits for caring for someone no longer in need of care or under your care
  • Incorrectly stating your living circumstances including your rental circumstances
  • Incorrectly claiming emergency payments in times of disaster when no entitlement exists.

Issues of general deterrence, or deterring others in the community from committing similar offences, play a very important role in the sentencing process. Generally only the most serious offences will attract a penalty of full-time prison.

The likely sentence imposed will depend on a number of factors including:

  • The amount of money obtained
  • The length of the fraud
  • Any attempts at concealing the offending or any level of sophistication
  • If there were any false statements made or any positive attempts to deceive
  • The method of detection
  • Any money paid back to Centrelink
  • Whether the money was obtained as a result of “need” as opposed to “greed”.