A former Manhattan property developer who sailed to New Zealand on a luxury yacht and bought a Canterbury vineyard has been jailed over document forgery and GST refund fraud.
The Inland Revenue Department (IRD) said former Manhattan developer Colin David Rath was charged under the Crimes Act with, "two representative charges of using forged documents and 39 charges of dishonestly using a document to obtain a pecuniary advantage".
He appeared in the Christchurch District Court today where he was sentenced to three years and seven months in prison.
IRD said Rath came to New Zealand on an entrepreneur residency visa in 2016.
"He was given permission by the Overseas Investment Office in 2018 to buy a 28 hectare North Canterbury vineyard called Fiddler’s Green. He used his company Waipara Winds Limited (WWL) to purchase the vineyard with an associated restaurant and bistro," IRD said.
"He also set up a company called New York Grape Escape."
Through these companies Rath then began his fraudulent activity.
"Rath filed fraudulent GST returns for WWL from April 2017 through until April 2021 and for New York Grape Escape from January 2017 until April 2019. He applied for fraudulent GST refunds of $1,506,833.81 for the two companies.
"He received $1,331,792.23 and $175,041.58 in fraudulent GST refunds are currently being withheld," IRD said.
When questioned, Rath told Inland Revenue he was investing in the land by building a restaurant bed and breakfast among other investments to make it more sustainable.
"In his April 2021 return he recorded spending $1.6m on a spec house, subdivision coasts and work on a B & B," IRD said.
"When investigators visited the property with Rath in May 2021 he showed them a ‘spec house’ and subdivision plans to support the development claim but on checking investigators found the house was owned by someone else, not related to Rath’s companies.
"The building company named in the contract to build the ‘spec house’ had done work for Rath but confirmed they had not built a spec house for him, nor had they been paid for the work they had done."
After this discovery IRD began its court action which eventually led to Rath's jail sentence.
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