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In February 2024, resort developer Li Zhang was sentenced to 10 years in jail after conspiring to defraud the ATO out of $15 million.
Zhang was found guilty of lodging fraudulent BAS claims throughout the early 2000s as an executive of hotel and golf resort development group, the Hightrade Group.
The ATO said Zhang had established three tiers of companies to commit the GST fraud: developers, building companies, and suppliers. He used these companies to ‘grossly inflate’ tax invoices, often for goods or services that didn’t exist or weren’t supplied.
“The fraud involved the use of multiple related companies that grossly inflated construction costs between themselves, and ultimately failed to remit the GST to the ATO. There were also claims of company purchases that simply didn’t exist,” ATO assistant commissioner Jade Hawkins said when Zhang received his sentence in 2024.
In June 2024, from jail, Zhang launched a proceeding against the Commissioner of Taxation in a bid to overturn a garnishee notice, which had confiscated $391,735 from his HSBC bank account.
He also sought to have a $1.8 million tax debt wiped, claiming that the ATO had unlawfully re-raised the tax debts after it had previously found them ‘uneconomical to pursue.’
Case notes regarding the garnishee notice indicated that it had been issued to recover outstanding debt, which at the time had totalled just over $2 million.
The ATO had judged Zhang to be ‘unwilling or unable’ to address the debt based on multiple factors, including his poor compliance history, recent incarceration for tax evasion, and unwillingness to pay the debt despite being aware of it for a significant period of time.
Furthermore, at the time the garnishee notice was issued in March 2024, Zhang had an additional $7.5 million tax debt that was in non-pursuit.
With respect to the remaining $1.8 million tax debt the ATO had re-raised in 2022, the court found that the re-raising of the debt had not altered Zhang’s legal rights and obligations and instead was an accounting process that could not be reviewed by the court.
Earlier this month (9 October 2025), the Federal Court of Australia dismissed Zhang’s application, stating that none of its grounds had merit.
The ATO’s investigation into Zhang was complex and entailed multiple search warrants, hundreds of witness statements, 80,000 pages of evidence, and an extradition.
Zhang fled Australia in 2009, shortly after his home was raided by the Australian Federal Police. In 2019, he was extradited from New Zealand to face sentencing in Australia.
The case spanned two decades, from when he first received a notice of assessment in March 2004, to when he was sentenced to prison in February 2024.
“Mr Zhang’s sentencing demonstrates that people who deliberately try to cheat the tax system will be caught and prosecuted accordingly,” the ATO said of the case.
“Our reach is far and our net is wide. There is no place to hide.”