A "coordinated" fraud scheme has prompted an investigation after a series of "bogus" expense claims resulted in Inland Revenue paying out over $150,000.
Inland Revenue customer segment leader Sarah Bourke said a specialist team at the department observed some "unusual returns" earlier this month.
Several people also went to the department's offices in Auckland and Wellington to reset their myIR passwords so they could check their returns.
“They told IR staff the word in the transport industry was that there were people who knew how to get extra money and mentioned someone on social media offering to help people with the expense claims," Bourke said.
More than 500 bogus returns filed in one night
After the scheme was picked up, Inland Revenue began receiving anonymous tips about what was happening.
Bourke said nearly 3000 fraudulent amended returns were stopped. The department received 542 such returns in just one night.
But before a new measure could be implemented, $151,787 in refunds was paid out. More than $4 million in fake claims were stopped.
"Inland Revenue is taking action to recover the money, with one individual already under an instalment arrangement to pay it back,” Bourke said.
She said the scheme appeared to be spreading through a community or workplace network.
“What initially appeared to be concentrated in the transport industry has broadened significantly to other areas across the country.
“Work is already underway to identify people promoting or running the scheme. If anyone is thinking they can make a quick buck by joining in the scheme, they should think again."
She warned there were "always consequences" for those participating in fraud.
"People who claim expenses that are not legitimate could be subject to sanctions, including a 150% evasion shortfall penalty and/or prosecution, as well as having to pay the money back."
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