Businessman jailed over tax evasion

Leslie McKenzie says he no longer plans to be a business owner in future. PHOTO: ROB KIDD
Leslie McKenzie says he no longer plans to be a business owner in future. PHOTO: ROB KIDD
A Dunedin businessman has been jailed for two and a-half years after taking his tax-fraud total to almost $1 million.

Leslie John McKenzie, 56, appeared in the Dunedin District Court yesterday on 48 charges, eight years after he was sentenced to home detention for tax evasion of more than $330,000.

"You were on notice of the very significant consequences of offending in this way and the prior sentence appears to have had no impact by way of deterrence," Judge David Robinson said yesterday.

"My assessment is that, bluntly, you’ve learned nothing."

Within two years of serving his earlier sentence, McKenzie began his crimes anew — in an identical manner.

Even the companies he set up were reminiscent of those involved in the previous court cases.

Clickmedia Ltd and Clicksystems Ltd were liquidated, only for the defendant to use Clickworks Design Ltd and Clickworks Manufacturing Ltd to carry out the unsophisticated ruse.

As the director, McKenzie would correctly make PAYE, student loan and KiwiSaver deductions from employees’ wages, then file returns with the Inland Revenue Department (IRD).

But he simply did not pay the required sums.

Between October 2018 and August 2022, the tax debt for the building businesses had blown out to nearly $550,000.

Despite the escalating financial disaster, in February 2022 he incorporated a third company: Moduletech Ltd, which took over the business of its predecessors when they were liquidated in September that year.

Prosecutor David Tasker said even after McKenzie was interviewed by IRD investigators in early 2023, he continued the tax fraud until April, accruing a further $62,000 of debt, taking the total to $605,578.

The court heard the defendant had repaid $30,000 but Judge Robinson said it looked unlikely that sum would be increased.

Mr Tasker said inquiries had uncovered McKenzie had interests in several properties in a trust, comprising equity of about $500,000, but because they had been in the trust for so long "liquidators won’t be able to touch them".

The defendant explained a contract gone wrong had resulted in him incurring a $1m loss before Covid-19 compounded his woes, and he accepted he should have closed down the business.

He said his loyalty to his staff and his desperation to keep the firm afloat had led to the tax crimes.

"I struggle with the submission this was ongoing but misplaced optimism," the judge said.

"It was a clear choice by you to put yours and your companies’ interest before those of the community."

Judge Robinson accepted there was no evidence of McKenzie leading a lavish lifestyle but stressed he "effectively used the commissioner [of the IRD] as a bank".

Counsel Deborah Henderson said her client intended to avoid being an employer in future.

The judge said nothing short of imprisonment would be appropriate to mark such "premeditated, deliberate and sustained" offending.

"It sends a message to the community that offending of this nature will simply not be tolerated," he said.