A Western Australian Phoenix operator has been sentenced to five years and four months in prison for fraudulently obtaining more than $890 000 through illegal phoenix activity. He was also ordered to repay the money.

The proceeding ensued after an extensive investigation by the Australian Tax Office which revealed that Western Australian businessman Sung Jae Cho had intentionally accumulated debt, liquidated his business to avoid paying the bill and then set up operation through a different corporate entity.  It was alleged that he also failed to report and remit the GST and Pay As You Go (PAYG) withholding while having sole and full control of the relevant entities.

The decision follows mounting scrutiny over the impact phoenixing operations are having on Australia’s economy, which is estimated to cost the country between $1.8billion and $3.2 billion each year.

Assistant Commissioner Aislinn Walwyn claims this decision signals a “strong reminder to those involved in illegal phoenix activity that if you engage in this behaviour you will get caught.” She warned that Australia’s Phoenix taskforce will “continue to follow up phoenix operators despite their efforts to conceal their activities.”

However the ATO believes the ruling significantly underscores the seriousness of the crime, asserting that it does not adequately reflect Mr Cho’s conviction of 20 charges, spanning over 13 years from 1997.