A former Christchurch strip club manager has been sent to prison on 49 fraud charges which the judge described as a "theft from the entire community".
Scott James McCormick appeared at Christchurch District Court for sentencing by Judge Tony Couch.
McCormick was the former general manager of Calendar Girls and the offending was not related to his role at the strip club, but rather to the companies McCormick purported to import alcoholic beverages from.
McCormick faced 49 charges of taking, obtaining or using a document for pecuniary advantage.
According to the summary of facts, between February 2013 and September 2014, McCormick incorporated three companies, APSM Enterprises Ltd, VE Holdings Ltd and Drink Red (Australasia) Ltd.
Between October 2013 and June 2017, McCormick caused APSM Enterprises Ltd to file 22 fraudulent GST returns which greatly overstated sales and expenses resulting in refunds being payable to that company amounting to $26,081.
Between March 2015 and April 2017, McCormick did the same with VE Holdings Ltd with 14 GST returns amounting to $219,931, and again between March 2015 and February 2017 with Drink Red Ltd filing 13 GST returns amounting to $141,560.
Inland Revenue launched an investigation into the tax affairs of the three companies and found that two of the three had never traded.
In March 2018, McCormick admitted that the GST returns filed on behalf of the three companies were false and misleading and he was responsible for this.
In total McCormick filed 49 GST returns, claiming refunds amounting to $787,572. Of the amount claimed, Inland Revenue declined to pay $26,868.
McCormick pleaded guilty on his seventh appearance to the 36 charges relating to APSM Enterprises Ltd and VE Holdings Ltd in March 2021.
However, he pleaded not guilty to the charges relating to Drink Red Ltd until less than a week before he went to trial when he eventually pleaded guilty.
The charges were resolved following the amendment of the amounts of money involved, reducing the extent of the fraud alleged from about $201,000 to $141,000.
From May to September this year, McCormick had said he would make payments back to Inland Revenue.
A total of $226,527 was paid back to Inland Revenue, which came from a family trust operated by McCormick's mother and Casino Bar Ltd.
However, it was later discovered that $80,000 from Casino Bar Ltd had been provided without authority for it to be used by McCormick, which Saunders described as "robbing Peter to pay Paul".
That money has since been paid back and McCormick has paid back a little under 16 per cent of the money fraudulently obtained from Inland Revenue.
Judge Couch said these were serious offences, each carrying a maximum penalty of seven years' imprisonment.
He described the offending as a "theft from the entire community" and said Inland Revenue wasn't the only victim.
He said the aggravating factor of breach of trust and said New Zealand's tax system relies heavily on the honesty of taxpayers trusted by Inland Revenue.
Crown prosecutor Paul Saunders pointed out that the offending continued over a period of three years and nine months and McCormick knew very well that his actions were dishonest.
Judge Couch took a starting point of four years and three months imprisonment. He gave McCormick discounts for his guilty pleas, his co-operation in the investigation and with the prosecutor, reparation and remorse and unreasonable delay in the course of proceedings.
That gave McCormick an end sentence of two years and 11 months' imprisonment, which Judge Couch imposed.
As McCormick was taken into custody he said "thank you, sir" and gave a thumbs up to his family.
-By Emily Moorhouse
Open Justice multimedia journalist
