Possible Charity Fraud Uncovered in New Zealand

June 15, 2017 Taxation in New Zealand

Tax CrimeWELLINGTON – Investigations by New Zealand officials may have unveiled a multi-million dollar tax fraud scheme using charities.

The Department of Internal Affairs of New Zealand has released a report, following an official information request, showing that local charities may be being used for international tax evasion or money laundering.

The report centres around Operation Timepiece, an investigation conducted by the Department of Internal Affairs on three entities registered in New Zealand as charities.

The three entities have made some donations in New Zealand, but, according to records, funnel the majority of their funds into a single entity registered in Switzerland.

The three entities have now been de-registered, but the professionals behind their organisation and operations claim that the closure was coincidental timing, and not connected to the investigations.

The distributions from the local charities are estimated to have reached approximately NZD 5 million since their establishment in 2012.

The report into the charities are surrounded by a mixture of entities spread across several jurisdictions, and that such a complicated structure does not seem to have any tangible connection with New Zealand, and, also, seems to rely heavily on secrecy.

Some local experts have suggested that the structure was set up to intentionally bypass the requirements of the US FATCA system .