Nathan Sarinn, Nay Chy and Seang Heng jailed over $4.6m tax scam, left liable for repaying the debt

Three men who ran a complicated, tax fraud for two years have been jailed and left liable for more than $4.6m in debt to the federal government.

Three men who ran a multi-million-dollar, years-spanning phoenix fraud involving six fake businesses have been jailed and left liable for more than $4.5m in tax debts.

Nathan Sarinn, 43, pleaded guilty before trial Seang Heng, 45, and Nay Chy, 50, were found guilty of conspiracy to defraud the Commonwealth.

During sentencing on Thursday, Judge Julie McIntyre said the trio were motivated by “greed not need” when they begun the offending between 2011 and 2013.

“Your offending was calculated, dishonest and systematic fraud over a period of years,” she said.

The trio installed foreign students as the directors and sole shareholders of companies that they then used to run their extensive labour-hire business.

The companies would rake in millions of dollars that Sarinn and Chy would remove in cash from the accounts.

A portion of the more-than $24m that entered the accounts over the 25-month period was intended for the federal government as GST and PAYG tax.

Instead of paying the money, it was withdrawn from the accounts and never seen again.

The total amount intended to be paid in tax but stolen by the trio totalled $4,632,355.

Seang Leng Heng, leaving the Magistrate's Court. Picture: Dean Martin

Nathan Sarinn leaving the Magistrate's Court. Picture: Dean Martin

The companies were wound up when the debts started to mount and the accounts had been drained.

The three men were raided by police in 2013. Only days later several of the directors, who were employed as part-time workers at an abattoir despite being the heads of multi-million-dollar companies on paper, left the country.

Judge McIntyre said both Sarinn and Chy had gambling addictions during the offending and were looking for ways to alleviate financial issues.

All three men were born in Cambodia during a violent civil war, which saw them imprisoned in labour camps or forcibly enlisted into the army.

She said Heng was “the architect behind the scheme” while the other men had specific roles such as withdrawing cash or preparing invoices.

Judge McIntyre said tax fraud was not a “victimless crime”.

“It is a crime against the whole community, it reduces funds available for vital works and second because it increases the tax burden on honest tax payers,” she said.

“The tax system relies heavily on self-reporting and you took advantage of that vulnerability.

“The affect of your offending will be felt by the entire community.”

Nay Chy leaving the Magistrate's Court. Picture: Dean Martin

The investigation and prosecution of all three men took eight years, mainly due to the complexity of the investigation as well as a 12-month delay in a trial being heard due to Covid-19.

“Offending of this type is difficult to detect and once detected time-consuming and difficult to prosecute and many legitimate businesses are affected,” Judge McIntyre said.

Heng was sentenced to eight years in prison with a non-parole period of six years while Chy was sentenced to five years in prison with a non-parole period of three years.

Sarinn, who pleaded guilty before trial, was sentenced to four years in jail with a non-parole period of two years.

Judge McIntyre made a reparation order that left the men liable for the unpaid and still-owed tax.