THE lure of generous tax deductions has taken more casualties in Western Australia, with investors fleeced of almost $100,000 in a scam disguised as a film industry investment.
THE lure of generous tax deductions has taken more casualties in Western Australia, with investors fleeced of almost $100,000 in a scam disguised as a film industry investment.
It is understood many of the investors - 16 who approached the Police Major Fraud after being asked to substantiate their deductions by the Australian Taxation Office - have already made 'voluntary adjustments' to their tax returns, and have no hope of retrieving their initial outlay.
Dressed in a medium blue suit and matching tie, a frail Daniel Devine, 78, was handed a two-year suspended sentence in Perth District Court earlier this week for defrauding investors.
Mr Devine, who posed as an executive film producer, enticed investors to plunge money into his company and to claim the investment as a tax deduction in an Australian film. He was later declared bankrupt.
In sentencing on Tuesday, Chief Judge Antoinette Kennedy indicated Mr Devine would have gone to jail if it weren't for his numerous ailments, which included prostate cancer and heart disease.
"You are deserving of condemnation for what you have done," the judge said.
In a note on the corporate regulator website, the Australian Securities and Investments Commission warns that many people invest in films to reduce their tax bills near the end of the financial year - as local film investments can attract favourable tax treatment - without checking if the schemes are registered.
Agribusiness schemes also do the bulk of their fund-raising at the end of the fiscal year, and anecdotal evidence suggests large numbers of Great Southern and Timbercorp scheme investors were attracted by the large upfront tax deductions.
Many investors in the failed schemes are involved in a battle with their lenders over the legality of their loan contracts, with impending legal action expected to determine the matter.
Mr Devine raised, or stole, the money between 2003 and 2006, and was declared bankrupt in 2007. In some instances investors were told they could retrieve tax deductions of up to $20,000 for an outlay of $2,000.
Chief Judge Kennedy noted that Mr Devine was not a first-time offender.
The Mandurah man conducted a similar fraud in Queensland in the 1990s.
In 1996, a judge referred to Mr Devine as an "artful conman" in an Administrative Appeals Tribunal ruling, in relation to a claim by a victim seeking tax relief.
The victim was encouraged by Mr Devine to invest in films in order to access generous tax benefits, which weren't valid.
Detective Sergeant Allan Jane, of the fraud squad, said police had observed a trend of criminals targeting elderly and retired investors.
