Hunter tax fraud on a grand scale Promise: Hightrade Constructions in happier times at the opening of part of Hunter Valley Resort at Pokolbin. Hightrade head Li Zhang (second from left) is pictured with Labor politicians Michael Costa and Henry Tsang.
Mastermind: Hightrade head Li Zhang, who left on April 25, 2009 and hasn’t returned. He left 10 days after the execution of search warrants on Hightrade group offices and Zhang’s home.
Future: Original plans for the Hunter Valley Resort at Pokolbin that was the centre of Hightrade’s tax fraud.
TweetFacebook Former Hightrade executive to face more jail time for tax fraudA Hunter Valley resort featured in a construction company’s tax fraud conspiracyPETER Chang is the man doing time for what a Sydney District Court judge described as “the great n pastime of ripping off the tax office”.
He sat in the dock of a courtroom on Wednesday as details of the conspiracy to use a Hunter Valley resort for tax fraud on a grand scale were laid out.
Chang, 45, was an executive of Chinese construction company Hightrade, who was sponsored by Hightrade head Li Zhang to come to in 1997. Six years later he was doing Zhang’s bidding as a finance officer sending fraudulent documents to the n Tax Office during construction ofResort Hunter Valley at Lovedale.
Hightrade overstated the resort’s construction costs to the tune of $115 million, and in the process obtained $10.5 million in fraudulent refunds from the tax office.
Li Zhang fled in April, 2009, only days after a raid on his house and Hightrade offices as the tax office pursued the group and its more than 100 affiliates for more than $100 million in tax losses.
His co-conspirator Simon Chan left by March, 2010. Chang remained, was charged and jailed in 2016 for a minimum of three years after his conviction for tax fraud at a Sydney Hightrade site. He will be sentenced for the Hunter Valley fraud at a later date, after pleading guilty in February.
Sydney District Court Judge Robyn Tupman said Chang might not have known the total amount of the tax fraud committed by Hightrade between 2002 and 2009, but he knew the invoices he sent to the tax office were fraudulent.
It was “regrettably an all too common pastime” that “people seem to go out of their way to try and rip off the tax office”, Judge Tupman said.
Hightrade left a trailof destruction through the Hunter after suppliers and subcontractors were repeatedly left with losses of sometimes hundreds of thousands of dollars as a succession of Hightrade companies were liquidated during work atsome of the Hunter’s biggest construction sites.
They included Resort Hunter Valley, which later became the Crowne Plaza at Lovedale, Sky Central at Charlestown and a number of Newcastle apartment buildings.
The liquidation of at least eight Hightrade companies during construction of the resort contributed to the launchof ann Taxation Office investigation of nearly 40 Hightrade companies for tax fraud and “phoenixing” –where companies are liquidatedto avoid creditors and are rebirthed under new names to start again.
Li Zhang’s flight from occurred in the middle of a Federal Court case in which a judge threatened contempt proceedings against Hightrade executives over an attempted sale or transfer of the Lovedaleresort to make it difficult for the ATO to recover $50 million in tax and penalties.
An agreed statement of facts to the Sydney District Court on Wednesday showed St George Bank undertook an internal analysis of its exposure to the Hightrade group as early as March, 2006.
While the bank estimated Resort Hunter Valley was worth $118 million, Hightrade had fraudulently submitted documents to the tax office that showed it cost $240 million to build.
Hightrade’s history includes Hunter building subcontractor and supplier losses in the tens of millions of dollars, substandard building work on major project sites, visa scams, a damning Cessnock Council investigation over its associations with the company, the resignation of a NSW Labor MP for failing to disclose benefits he received from Hightrade, union protests, Immigration Department raids, and strident criticism of n regulators for failing to act.
News of his convictions, seven years after the Hightrade group effectively left the Hunter region and closed up shop in , prompted bemused and angry responses from businessmen who lost tens, and sometimes hundreds, of thousands of dollars after dealing with Hightrade companies.
Chang was director or shareholder of 10 Hightrade companies including Merewether Wharf Pty Ltdand Sky Central Pty Ltd, the Hightrade company behind Charlestown’s Sky Central towers project that was taken out of Hightrade hands by the ANZ Bank in 2009 after years of controversy.