Appeal over $1m fraud denied

A MAN whose company provided security for MIQ hotels during the pandemic has had his appeal refused after he was jailed for evading more than $1 million in taxes.

Rupert FaimoaMagele, 49, took his case to the High Court, arguing his penalty for the threeyear tax fraud should be reduced to home detention.

But Justice Melanie Harland ruled the 37month prison term, imposed before the Alexandra District Court last year, would remain.

After a career as a professional sportsman, FaimoaMagele joined the navy as an engineer.

When he left, he began working in security for a man described in court documents as ‘‘Mr S’’.

Blade Group Ltd was incorporated in February 2018 with FaimoaMagele established as sole director and shareholder.

The company provided security services at hospitality venues in Auckland, and for MIQ venues at three hotels in the city during the Covid19 pandemic.

Counsel Grant Fletcher described his client as a ‘‘patsy’’ and a ‘‘puppet’’ for Mr S, and said he had not benefited significantly from his crimes.

For the first few months, FaimoaMagele filed GST returns but that soon petered out.

At sentencing the court heard 11 documents regarding PAYE had been sent to the Inland Revenue Department (IRD) in nearly three years, and all but one understated employee income.

In total $1,057,548 of taxes went unpaid.

The company went into liquidation in March 2021 and there was no prospect of the outstanding sum being paid, prosecutors said.

There were repeated attempts to contact FaimoaMagele, including messages left for him, but he continued to dodge officials. His counsel at sentencing said the man ‘‘put his head in the sand’’.

It was unclear how much the two men received from the business but the IRD said it was ‘‘extremely profitable, with a turnover of many millions of dollars’’.

Investigations suggested Mr S earned more than $700,000, while FaimoaMagele made close to a million.

It was stressed the defendant had no house or car and there was no evidence of him living an extravagant lifestyle.

But Justice Harland said this did not prove he did not profit from the illegality.

‘‘No analysis of Mr FaimoaMagele’s bank accounts were made available to demonstrate he did not receive these funds or explain what happened to them,’’ she said.

It was accepted by the judge at sentencing that the defendant was ‘‘inexperienced in business, potentially gullible and open to suggestion by Mr S’’ but it was clear he knew of his obligations to the IRD and ignored them.

Mr Fletcher argued the district court should have reduced the sentence to below two years and considered home detention.

‘‘While the amount of money involved was large, the focus must be on the criminality of the offender,’’ he said.

Justice Harland, however, ruled there had been no error in sentencing.

‘‘There was a level of understanding on Mr FaimoaMagele’s part of his tax obligations and what was required to be done. He had agency over whether to comply with his responsibilities or, at least, seek assistance, but money that should have been paid to the IRD was distributed to himself and Mr S.’’