Couple accused of $32m tax fraud
This Sydney woman and her estranged husband owe nearly $32 million, the Australian Taxation Office claims, in a major Federal Court case triggered by the so-called "Panama Papers".
As part of its bid to get the alleged debt repaid, the ATO has successfully applied to the court for freezing orders over 11 Australian bank accounts and $11 million worth of Sydney property controlled by Zhao Hui "Sophie" Shao, 48, and CE "Eric" Wang, 49.
However, this is only part of their local real estate holdings - The Daily Telegraph has identified other properties purchased for at least $8 million.
In recently published reasons for judgment, Justice Wendy Abraham said the duo had been audited for the 12 years to June 2019, leading to amended assessments and shortfall penalties of more than $31.7 million.
Justice Abraham said the ATO audit "concluded that the respondents' true income is far in excess of the income reported by them, such that they have substantially under-reported their income across ... 12 consecutive income years".
She said it was clear "that the respondents have significant financial connections outside of the jurisdiction, particularly in China, and that they have connections to entities and associated entities with commercial activities and access to bank accounts overseas".
She said that there had been "substantial" transfers to and from a company called Hisun Rubber, of which Mr Wang is sole director and shareholder, as well as China Hisun, to which both had connections.
Justice Abraham said Mr Wang "had recently taken steps to dissipate assets he previously owned by transferring to (Ms Shao) the interest in several residential properties in April 2020, and the interest in Jingshi Pty Ltd in January 2020" for no cost.
The court has ordered three properties be frozen. One is a five-bedroom, four-bathroom home on 3ha at Ingleside, on Sydney's northern beaches, estimated to be worth at least $6 million.
It is one of the holdings that was previously jointly held.
Speaking to The Telegraph at the property, Ms Shao said: "Obviously there is a lot I have to say, just not at this stage. We are getting professional advice."
Mr Wang did not respond to requests for comment.
The Telegraph understands the trigger for the ATO audits was information contained in the Panama Papers - a trove of more than 11 million legal and financial documents anonymously leaked from Panamanian law firm Mossack Fonseca in 2016.
Hisun Rubber is named in the papers, as is Mr Wang; Ms Shao is not.
The pair has until February 15 to file defences.
Originally published as Couple accused of $32m tax fraud