Griffith business ‘fraudulently’ claimed to have bought $200 million worth of wine to get GST refunds, ATO alleges

A Griffith business allegedly claimed to have bought more than $200 million worth of wine that it didn’t actually purchase so it could “fraudulently” claim GST refunds, court documents have revealed.

Sans Pareil Estate, owned by 29-year-old Aaron Salvestrin, went into liquidation in October 2022 and allegedly owes the Australian Taxation Office (ATO) $32 million.

The liquidator, Gavin Moss of insolvency firm Chifley Advisory, launched Supreme Court proceedings to recover money from Mr Salvestrin in July 2023.

As Region exclusively reported, the court ruled in favour of the liquidator on Friday (15 March), ordering Mr Salvestrin to pay creditors back just over $8.4 million.

Justice Anthony McGrath found the company director made several personal transactions that did not benefit the business and therefore breached corporation law.

How GST refunds were allegedly claimed

The winery claimed to have exported much more wine overseas than it actually did so it could “fraudulently” receive $17m in GST refunds, an ATO audit cited in Justice McGrath’s published judgement alleged.

In 2022, Sans Pareil Estate claimed to have been supplied with more than $87m worth of wine from Victorian-based Andrew Peace Wines, according to liquidator evidence.

However, actual invoices from Andrew Pearce Wines showed it only sold the Griffith winery $224,000 worth of wine in that year.

When a company buys bulk wine from another business in Australia, it must pay a 10 per cent GST on that purchase.

However, GST applies only to domestic sales, not exports.

So if that bulk wine is then exported overseas, the company can claim a GST refund from the ATO on its domestic purchase.

Sans Pareil Estate made GST refund claims, but an ATO audit report to Sans Pareil said, in doing so, some of its bank statements were “significantly different and appear to have been altered to support your reported claims of export sales and acquisitions”.

It also concluded: “Commercial transactions between certain suppliers did not exist and you fraudulently created various documents, including bank statements and tax invoices, to obtain large GST refunds”.

All up, the winery allegedly claimed it was supplied with more than $200 million worth of wine.

“Almost all of the funds available to the Sans Pareil group companies came from the ATO [GST overpayments],” Justice McGrath wrote in his published judgement.

Allegations on ‘personal’ expenses

Further liquidator evidence allegedly showed money from winery bank accounts coming in from the ATO and then being transferred to American Express credit cards in Mr Salvestrin’s name – which made more than $6.3 million worth of transactions.

Mr Moss presented evidence that many of these transactions appeared to be for “personal” expenses not related to the wine business, such as for a PlayStation, a universal home theatre system and for the website OnlyFans.

Justice McGrath accepted the liquidator’s argument, so ruled that Mr Salvestrin would have to pay back $8.4 million to the wine business – which is now controlled by the liquidator. This money, if recovered, will be used to pay creditors and cover liquidator costs.

What else do we know?

Including penalties and interest charges, the winery is alleged to owe the ATO more than $32 million. More than 30 (mostly small) businesses across the Riverina, Victoria and South Australia are also alleged to be owed several hundred thousand dollars.

Region’s exclusive ongoing investigation into the winery revealed several luxury vehicles owned by Sans Pareil Estate were sold by the liquidator, including a 2014 McLaren P1 Supercar signed by Formula One star Daniel Ricciardo, purchased for $1.47 million.

This Supreme Court case against Mr Salvestrin was in the civil jurisdiction, meaning it related to property or money and was not a criminal matter.

Mr Salvestrin has not been charged with any crimes related to this matter.

What happens next?

The ATO and the Australian Federal Police (AFP) have formed a taskforce named Operation Protego, which is investigating alleged GST fraud. This has led to some companies facing criminal charges.

However, both the ATO and AFP declined to comment on whether there is to be any further investigation of, or action taken on, the liquidation of Sans Pareil Estate.

Almost all winery assets have now been sold by the liquidator, who recovered around $2m in the first 12 months after the business collapsed. A Collina house bought through one of the Sans Pareil companies is listed as being “under offer”.

Mr Salvestrin did not attend any of the court hearings and Region has been unable to get in touch with him for comment. He is understood to be living in Sydney. In an email to a liquidator lawyer, he said he was admitted to a mental health ward for eight weeks from 1 February.

If you know more about this story, contact ojacques@region.com.au

Original Article published by Oliver Jacques on Region Riverina.