Fraudulent accountants Skinner and Rowley jailed

“Each of your families have suffered real hurt and humiliation as a result of your greed….They are now paying a very heavy price for your callousness,” Justice Kos Wellington tells accountants Barrie James Skinner and David Ingram Rowley today.

The two accountants were found guilty in late July on more than 80 charges each of tax avoidance, fraud and attempting to pervert the course of justice.

Over the course of five years from September 2005, they sold a scheme to clients, which they said would "shelter" them from tax payments.

The scheme involved false invoices and a trail of "shell" entities for services which were never provided or, if they were, were provided at a value much lower than that recorded on the invoice.

The scheme cost the IRD between $1.8 million and $2.3 million dollars in lost tax – about $1.5 million of than is ‘uncollectable.’

Rowley has been sentenced to eight years in prison – six and a half years on the fraud charges, a concurrent two years for tax evasion and a cumulative 18 months on the attempting to pervert the course of justice charges.

Skinner has been sentenced to eight and a half years behind bars – seven years for the fraud charges, two and a half years concurrent for evasion charges and the 18-month cumulative sentence for attempting to pervert the course of justice.

Skinner’s lawyer Mike Lennard said his client had been destroyed by this process. He has been in the industry for 24 years, typically working 80 hours a week “at the expense of his personal life and his family life”.

He said in the past two years, his client has descended into utter financial ruin and disgrace and, having been recently bankrupted by the Wellington High Court, has nothing left.

Mr Lennard says he still has family support and the character references, some of which were sent to the court overnight, from his daughter Victoria and former and current wives “makes sad reading”.

“There are still clients who, after all that publicity, are standing by him and have good things to say.”

He said Skinner had already been through a substantial sentence over the past two years, during the course of the investigation, while watching a “prosperous and well-regarded practice” crumble.

He had worked tirelessly to prevent that, to no avail.

Rowley’s lawyer Mark Keating argued Rowley played a different role to Skinner and “only received 25% of the gains.”

Justice Kos told both Skinner and Rowley there were three groups of people their offending had hurt:

• The taxpayer.
• Their clients.
• Their families.

He said their offending was deliberate and premeditated; it was extended over five years, it was sophisticated and it was repeated again and again.

Justice Kos said it caused substantial harm and loss and for those reasons he was unprepared to either increase or decrease his starting points of eight and a half years for Skinner and eight years imprisonment for Rowley.

UPDATED / 12.30pm:

Fraudulent Wellington accountants Barrie James Skinner and David Ingram Rowley have both been sent to prison.

Rowley has been sentenced in the Wellington High Court to eight years in prison – six and a half years on the fraud charges, a concurrent two years for tax evasion and a cumulative 18 months on the attempting to pervert the course of justice charges.

Skinner has been sentenced to eight and a half years behind bars – seven years for the fraud charges, two and a half years concurrent for evasion charges and the 18-month ciumulative sentence for attempting to pervert the course of justice.

In July, the pair was found guilty on more than 80 charges each of tax avoidance, fraud and attempting to pervert the course of justice.

Over the course of five years, they sold a scheme to clients, which they said would "shelter" them from tax payments.

The scheme involved false invoices and a trail of "shell" entities for services which were never provided or, if they were, were provided at a value much lower than that recorded on the invoice.

In sentencing today, Justice Steven Kos said some of their clients were credulous but the vast majority were not aware of what was going on and some believed they were paying their tax through both Skinner and Rowley.

He said there is some disagreement between lawyers about the sum lost as a result of the offending.

The crown argues it was $2.3 million while the offenders' lawyers say it was $1.8 million.

"Either way, Mr Rowley benefited to the tune of $500,000 ,while Mr Skinner benefited to the tune of at least $1.3 million," Justice Kos said.

He said about $1.5 million of that remains uncollectable.

Rowley's lawyer Mark Keating argued his client played a lesser part in the scheme than Skinner and argued for a different approach to sentencing.

Rowley only received 25% of the gains. Skinner enjoyed three times the percuniary gain enjoyed by Mr Rowley.

"Skinner played the leading role – my client went along with that."

UPDATE / 11.10 am:  Accountants jailed

Barrie James Skinner was jailed this morning for a total of eight and a half years after being found guilty of fraud, tax evasion and attempting to pervert the course of justice.

Co-offender David Ingram Rowley was jailed for a total of eight years on similar offences.

More soon.

Fraudulent Wellington accountants Barrie James Skinner and David Ingram Rowley are to be sentenced today for tax fraud related charges.

The pair was found guilty late last month on more than 100 charges of fraud, tax avoidance and attempting to pervert the course of justice after a nearly-two month long trial.

The court heard the offences dated back to 2005 and involved false invoices and a trail of "shell" entities which were set up in September of that year.

The invoices were for services which were never provided or, if they were, were provided at a value much lower than that recorded on the invoice.

In his ruling, Justice Steven Kos said the scheme was sold to willing and, in many but not all cases, credulous clients of the accuseds' accounting and taxpayer practice as a means of reducing the amount of tax payable by them.

The two were refused bail and ordered to surrender their passports, although at the time prosecutor Dale La Hood said this did not remove the risk of them skipping the country.

Meanwhile, the BNZ is still trying to have the pair’s family trusts TPS Asset Trust and TPS Asset No 2 Trust liquidated.

The case was adjourned in July and is scheduled to be heard in the Wellington High Court on Monday.

Associate Judge David Gendall bankrupted the pair late last month but BNZ’s lawyers then called for the trusts to be wound up.