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Youth worker’s $400k fraud

Youth worker facing 7 years in jail after using trust to rip off IRD


Bradley McLaren in 2013. PHOTO/FILE
Bradley McLaren in 2013. PHOTO/FILE

A Masterton youth worker defrauded Inland Revenue of more than $400,000, spending the money on cars, furniture, and restaurants.

Twenty-six times Bradley William McLaren, 33, filed false GST returns over a two-year period, claiming a trust he had set up had incurred expenses of more than $6.7 million.

But there were no expenses, and the trust was “in essence the alter ego” of McLaren, Masterton District Court heard on Thursday.

After paying out $400,181, the government department launched an investigation in to the claims, before withholding the balance of a further $390,576 in fraudulent GST returns.

McLaren began working at St Matthew’s Parish, Masterton, in 2012, in a role with children and young people, according to IRD’s summery of facts.

He established a trust called “Kidz Workz Ministriez Trust” the following year, and registered it both as a charity and with IRD for GST purposes.

The defendant then prepared and filed 26 GST returns on behalf of the trust, for the GST periods between August 31, 2013, and September 30, 2015.

While McLaren was an employee of the church when he set up the trust, he finished working at St Matthew’s on August 7, 2013.

McLaren claimed the trust had incurred expenses of $6,755,905, and had made sales of $961,186.

During this time the defendant contacted IRD on 12 occasions to check on the progress of the refunds.

Almost half of the claimed returns were paid into two accounts nominated by the trust, both of which were in McLaren’s name.

With this money, he purchased 10 vehicles and a trailer, $23,000 worth of furniture, spent $7000 at cafes, restaurants and supermarkets, and bought $10,000 worth of goods from The Warehouse.

He also gave out loans to the tune of $27,000 to two individuals.

In June, 2015, IRD launched an investigation into McLaren and the trust.

McLaren then provided the department with false bank statements, which prompted IRD to investigate the bank accounts the returns were paid into.

The investigation revealed there had been “no significant sources of income apart from the deposits paid by IRD”.

There was also no evidence of the expenses that had been claimed.

A “significant level of person spending” was identified, often the day after the GST claims were paid.

A number of people involved in the trust were interviewed during the investigation.

“It was confirmed that the trust was in essence the alter ego of the defendant,” the summary read.

“It was also confirmed that the defendant did in fact offer holiday programmes to the public, however the actual number of programmes actually undertaken were very limited.”

When interviewed by an IRD investigator, McLaren maintained the trust was bona fide and provided real services, and said he had taught himself about GST from the IRD website.

Yesterday McLaren pleaded guilty at Masterton District Court to one representative charge of dishonestly filing 22 GST returns.

He also pleaded guilty to one representative charge of attempting to defraud IRD a further four times.

Lawyer Andra Mobberley said McLaren had initially pleaded not guilty to the charges, but had changed his plea since seeking legal advice.

Judge Barbara Morris remanded McLaren on bail until sentencing in June.

McLaren did not wish to comment.


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Emily Ireland
Emily Ireland
Emily Ireland is Wairarapa’s Local Democracy Reporter, a Public Interest Journalism role funded through NZ On Air. Emily has worked at the Wairarapa Times-Age for seven years and has a keen interest in council decision-making and transparency.

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