Tax Office Blunder Allows Developer To Avoid Jail Term

The Age

Monday June 9, 2008

By Steve Butcher

THE Australian Taxation Office has bungled one of its longest and most expensive investigations, leaving its Victorian millionaire target to walk away from court this week.

Fatal flaws in the central evidence against businessman Nicholas Corcoris, 57, were recently exposed during testimony by a senior Tax Office auditor.

Her answers under cross-examination so weakened the six-year, multimillion-dollar prosecution that six GST deception charges had to be withdrawn.

Corcoris, a Dandenong-based property developer who recently had six other income tax charges dropped by the Commonwealth Director of Public Prosecutions, was charged in 2004 with $3.2 million of frauds and deceptions.

But after errors in the ATO's auditing processes were revealed during questioning by defence barrister Con Heliotis, QC, the prosecution decided to issue two new summary charges of making false statements in BAS returns to which Corcoris pleaded guilty.

These criminal charges do not allege, as was always claimed, that he owed GST to the Tax Office. Prosecutor Ian Hill, QC, conceded a jail term of any type was now not being sought. It was revealed last week that Corcoris had settled in 2006 his civil liabilities to the Tax Office for $25 million.

With Corcoris facing several maximum 10-year jail terms and fines on the original 12 charges, his lawyers have now asked that he be released on a non-conviction good-behaviour bond.

Magistrate Charlie Rozencwajg described as "quite startling" that senior ATO auditors "couldn't get it right".

In response, Mr Hill agreed "in part" the Tax Office audit process was flawed, which had led to the "responsible" withdrawal of the major charges.

But he submitted that the auditors had attempted a reconstruction "from imperfect records", and that Corcoris should be convicted.

Corcoris, who was first raided by Australian Federal Police in 2002, had originally been accused of failing to declare land sales under a complex system of allegedly invalid trusts. Mr Heliotis told the Melbourne Magistrates Court that Corcoris maintained that he committed the two offences "for reasons that in his mind were not dishonest" during a booming business period that created a "mess" with the introduction of the GST.

He submitted that Corcoris had been punished enough after suffering massive financial losses and emotional trauma on ultimate charges that were "at the very bottom of the scale".

He will be sentenced on Thursday. The Tax Office refused to comment.

Short finale BUSINESSDAY 3

© 2008 The Age

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