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Gambler's Tax Fraud
Fox News Story 2/24/2006

  Copyright© 2005 Colin M. Cody, CPA and ProfessionalGamblerStatus.com, LLC, All Rights Reserved.
Tax fraud wins gambler 10 years
By Daniella Miletic
Court Reporter
August 9, 2005

A gambling addiction, blind ambition and a desire to flaunt his riches led Keith Jonathan Fernandez to play a central role in one of the biggest stamp duty frauds in Victorian history — a role for which he was sentenced to at least seven years jail yesterday.

County Court judge Leo Hart sentenced the accountant, 36, who failed to pass on $10.1 million in tax to the State Revenue Office, to 10 years' jail with a non-parole period of seven.

Fernandez, a former director of now-liquidated TQM Legal and Accounting, stole the money from February 1998 to November 2000. Through the company, which serviced the legal profession and conveyancing industry, Fernandez collected more than $15 million in duty but declared only $5 million to the State Revenue Office.

He poured the stolen money into offshore betting accounts, with $3.1 million paid in 38 cheques to Dialabet, a Vanuatu-based phone betting service.

He also gambled more than $500,000 at the Crown casino, losing almost half that amount.

Fernandez, the founder of the now-defunct racing syndicate the Benachie Group, also spent more than $1 million on harness-racing horses and associated expenses.

On one occasion, he bet $150,000 on a Melbourne-Essendon football game.

Fernandez had pleaded guilty to 30 counts of obtaining financial advantage by deception.

His lawyer, Mark Taft, told a previous hearing that Fernandez became entangled in a "gambling morass".

"Like so many gamblers, he always believed he could win the big one," he said.

Mr. Taft told the court his client was motivated by a desire to impress those he knew with money.

There was an "appalling lack of supervision", Mr. Taft said, and a simple audit would have uncovered the fraud.

Another TQM employee, Michael John Kelly, of Cranbourne, last year received a suspended sentence for his role in the fraud. Kelly stole more than $600,000 in state taxes.

The scam was uncovered when an anonymous letter was sent to the State Revenue Office, prompting an audit.








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