A 48-year-old Chinese woman, Zhao Hui Shao, and her husband, Eric Wang, have recently had 11 bank accounts and $11 million worth of mansions frozen in their names in Australia for alleged tax fraud.
Australian Chinese couple’s assets frozen for alleged tax evasion
According to Australian media reports, a Chinese couple in Australia received charges from the Australian Taxation Office for alleged tax evasion.
The tax department checked the financial situation of the 2 people – for 12 consecutive years, their declared income was much lower than their actual income, and they owed a total of more than 31.7 million Australian dollars in tax evasion. As part of the repayment of the debt, the tax department had successfully applied to the court for a request for an asset freeze. Subsequently, the court issued an asset freeze order directly – freezing 11 bank accounts in the names of the two individuals, with a total value of $11 million in property.
There are three properties in total, including a five-bedroom, four-bathroom property on a three-hectare site in Ingleside, Sydney, which is valued at at least $6.5 million. However, it was revealed that even after the freeze, the Chinese couple, had at least $8 million worth of other properties.
An investigation by the tax department found that the two had “substantial” financial dealings with a company called Hisun Rubber, whose shareholder and director was Eric Wang.
The judge said that there was a “substantial” transfer of funds between the couple and a company called Hisun Rubber, of which Eric Wang was the sole director and shareholder.
The investigation also revealed that Eric Wang had recently taken steps to transfer assets he previously owned, transferring several homes in April 2020 and an interest in the company to Zhao Hui Shao in January 2020 without compensation.
In an interview, Ms. Shao said, “Obviously I have a lot to say, just not at this stage. We’re getting professional advice.”
The case is still under review.
Setting up shell companies to transfer funds to evade taxes
Chinese tax evasion in the United States is not uncommon, like in some Chinese neighborhoods, there are often Chinese stores that do not accept credit cards and only accept cash, many of which are tax evasion.
Two Chinese men in New Jersey were prosecuted in 2018 for tax evasion because they used shell companies to transfer profits. According to documents filed by the prosecution, Mr. Albert Chang, 71, and Mr. Michael Q. Fu, 54, jointly owned and operated United Products and Instruments (UNICO) in Dayton, N.J. The company was founded in 1991. (UNICO) in Dayton, New Jersey, which was established in 1991 and was engaged in the sale and export of medical microscopes and centrifuges.
Zhang and Fu’s tax evasion scheme began with the registration of two shell companies in China called Action Towers and Bench Top Laboratories. The profits of the U.S. UNICO companies were then transferred to the bank accounts of the Chinese shell companies, and the transferred funds were deducted from the UNICO companies’ tax returns and falsely reported as costs such as sales or commissions.
Second, Zhang and Fu also registered a company in Hong Kong called “Shanghai Electric” (Shanghai Electric), and through the practice of raising invoices by 5%, they allowed UNICO to overpay the Hong Kong company, which then wired the overpayment to their account in China for their personal expenses. And on their federal income tax returns, they claimed they had no income, thereby avoiding paying taxes.
Zhang underreported his income by $1,559,200, evading $237,064 in taxes due, and Fu underreported his income by $1,570,000, evading $321,141 in taxes due.
The prosecution found that over the years, they both underreported their income by more than $3.1 million, evading nearly $560,000 in taxes. The court ultimately sentenced the two Chinese men to 21 and 37 months in prison, respectively, and in addition to the jail Time, they were also required to pay fines several times the amount of tax evaded.
Tax Fraud Italian Chinese Couple’s Years of Income Goes Empty
A Chinese couple living in Italy for more than 20 years, in June 2020 because of suspected tax fraud, by a group of armed tax police came to the Home, raided the house, car, almost all the belongings were confiscated.
The couple is 55-year-old husband X.L. and 56-year-old wife G.C., respectively, the newspaper said. The couple, who run a local factory, had their Family assets confiscated for alleged tax fraud. Also involved in the case was a 35-year-old Chinese, Q.L.
The case started when the local tax authorities found problems with two companies during a financial audit, so the Clusone tax police launched an in-depth investigation.
However, since most of the documents of the companies involved had been destroyed or hidden, in order to restore their true operation as much as possible, the tax police conducted a cross-check and also questioned several people with whom they had business dealings.
The investigation found that the two Chinese companies mentioned above were one real and one imaginary, and that they invoiced falsely in order to compress their book profits and tax payable. In particular, the period from 2015 to 2018 involved more than 1.6 million euros in false operations and more than 750,000 euros in unpaid taxes.
Investigators believe that for so many years, the Chinese couple was able to squeeze out other counterparts at absolutely low prices precisely because they evaded taxes to make it happen.
Given that the couple had committed tax fraud, the judge ordered a precautionary seizure of more than 750,000 euros of their assets (equivalent to the unpaid IRES and IVA taxes). The couple’s two large apartments in Leffe, two garages, two cars, and all deposits in their bank accounts were all seized.
In many countries overseas, tax fraud is a felony. News of Chinese tax evasion is often in the papers. If you love money, you need to take it in the right way, otherwise you will probably end up with a basket of money and legal liability.
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