WA company owner jailed for 'phoenixing'
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A labour hire business owner who fraudulently obtained more than $890,000 through illegal 'phoenixing' has been jailed for five years and four months in Western Australia.
Phoenixing is the practice of creating a new company to continue the business of a firm that has been deliberately liquidated to avoid paying debts including taxes, creditors and staff entitlements.
Sung Jae Cho operated a labour hire business through four different entities, mainly providing welders to engineering construction companies in and around Perth between 1997 and 2009.
Cho was convicted of 20 charges, including obtaining a financial advantage by deception between 2004 and 2007, and was sentenced in the District Court of WA on Friday.
The Australian Taxation Office said Cho also failed to report and remit the GST and pay-as-you-go withholding while having sole and full control of the relevant entities.
"This kind of behaviour has an incredibly damaging impact on the Australian community through unpaid wages to employees, debts to other businesses, and unpaid taxes," ATO assistant commissioner Aislinn Walwyn said.
"Companies like these are obtaining financial advantages over their competitors and robbing the Australian economy of revenue that could be spent on essential services."