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Retirement

SMSF schemer’s super plan lands him behind bars

By Grace Ormsby · October 23 2019
Reading:
egg

Retirement

SMSF schemer’s super plan lands him behind bars

By Grace Ormsby
October 23 2019
Reading:
egg
Jail

SMSF schemer’s super plan lands him behind bars

author image
By Grace Ormsby · October 23 2019
Reading:
egg
Jail

The handing down of a three-year prison sentence this week for fraudulent SMSF creation and early superannuation withdrawal is serving as a timely reminder from the Australian Taxation Office that such activities are illegal.

The ATO said the 51-year-old man was sentenced in the Downing Centre District Court to three years in jail after he pleaded guilty to orchestrating the illegal early release of a superannuation scheme.

Kent Nguyen was found to have unlawfully created, operated and benefited from a fraudulent self-managed superannuation fund (SMSF) that did not comply with relevant protocols, procedures and legislation to make it a legal SMSF.

He then used the fund to arrange the unlawful early release of super for 25 people in the community, with the ATO reporting that many of the people were in financial trouble and were approached by friends who told them “they knew someone” who could help.

In each case, the individual’s super balance was rolled over into Mr Nguyen’s SMSF, with the total amount of funds unlawfully withdrawn exceeding $700,000.

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According to the ATO, Mr Nguyen then retained a significant portion of this amount, having told clients that the money had been paid to the ATO as tax.

Assistant commissioner Ian Read said the sentence handed down demonstrates that promoters who encourage illegal early access to superannuation will be held accountable.

“While the majority of SMSFs do the right thing, this case serves as a reminder that there are severe penalties for those who attempt to cheat the system.”

“Taking your super out from any super fund early without meeting a condition of release, or encouraging others to do so, is illegal,” he added.

The assistant commissioner said “illegally accessing super early will cost people a lot more than the super they access and may get them into trouble as there are serious consequences for withdrawing super before they are legally entitled to do so”.

Consequences can include having to declare the accessed amount as income in an income tax return, administrative penalties and disqualification from being a trustee.

The ATO has previously warned Australians to “beware of people promoting early release of super schemes”.

“They might tell you they can help you withdraw your super to pay off credit card debt, buy a house or car, or go on a holiday.”

SMSF schemer’s super plan lands him behind bars
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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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