If you need an accountant who will close his eyes on scam and fraud in your company, and will help to avoid tax on unlawfully taken money, and you live on the Gold Coast, Australia, read on and make notes. Here is my experience with Southgate Accountants and the principal Adam Southgate, from my own story of fraud in my company, where I am a director and 50% shareholder.
My partner, who is also my co-director and 50% shareholder in the company, took $1.1 million from the company personally unauthorized (fraudulently shifted funds to his own property development company and/or paid for personal expenses out of the company, without my knowledge) and then tried to present those expenses as legitimate business expenses in the company accounts, being the financial officer of the company.
When I discovered that and asked him why the company was paying huge amounts for his personal expenses, my partner told me [quote]: So I don't have to pay tax. [End of quote]
My partner also took bank loans to the amount in excess of $1.9 million for his two homes, and forged my signatures on loan contracts, which made ME a co-borrower for $1.9 million for the properties in HIS personal name, plus the company where we both are directors and shareholders, a guarantor for these $1.9 million. The forgeries are confirmed by a forensic signature expert.
My partner was also stealing company's money by banking checks for payments due to the company, into his personal bank account and not recording those in the company books. He was also receiving Western Union cash transfers from the company's overseas clients (often substantial) and kept the cash without reporting it to the company. As today, it is estimated my partner banked checks to the amount of $24,000 and cashed Western Union transfers to the amount of $42,000.
If you think, This guy must be behind the bars! this is what I was thinking, too.
However, when I told it to Adam Southgate from Southgate Accountants, which is the official company tax accountant and is advertising himself on his website http://www.southgateca.com.au as a qualified Chartered Accountant and Tax Agent with a wealth of experience who focuses mainly on innovative taxation solutions, Adam Southgate decided to help my partner out and created Loans to cover for all the funds my partner stole from the company!
(So that he doesn't have to pay tax on those.)
Adam Southgate also put the stolen funds as Loans in the company tax accounts.
Following this, Adam Southgate created Minutes of Directors Meetings meetings between my partner and me that supposedly happen in the office of Southgate Accountants at 74 Ashmore Road, Bundall which NEVER happened.
When I discovered significant funds were shifted out of the company by my partner, and started my investigation, I informed Adam Southgate that I found incorrectly allocated expenses in the company accounts and requested him that any tax returns were to be signed by me. This was on 19 March 2008. On 11 April 2008, however, Mr. Southgate filed a company tax return without bothering to check with me, on a sole signature by my fraudulent partner. I have since found $35,000 invoice included in that tax return paid by my partner for works on his personal house, and many more expenses unrelated to the company, but included by my partner (who, once again, was a financial officer of the company) in the company books as a legitimate business expense. I told Southgate Accountants about that and pointed out individual invoices, but again, Adam Southgate didn't do ANYTHING to report the fraud to the tax office.
The Loans Adam Southgate created on request of my fraudulent partner indicate the company may have to pay the tax on all the money taken out of the company fraudulently by my partner. How can it be? By the way the Loans are worded. What can happen, my partner already took $1.1 million from the company, and if the tax office decides these funds cannot be legitimately claimed as Loans (which they never were in the first turn being misdirected/stolen funds) and deems $1.1 million to be unfranked dividends (i.e. undeclared income for my partner), then the company will need to pay further $500,000 tax, on top of the money already lost so that my fraudulent partner doesn't have to pay tax personally. Who wants some innovative taxation solutions? Enquire with Mr. Adam Southgate how he words his Loans; this is quite a piece of work! If you remember, they could not put Al Capone to jail for what he'd done; they only managed to put him to jail for not paying taxes Adam Southgate is helping my fraudulent partner to avoid this problem (i.e. paying taxes for the money he stole from the company) by his innovative accounting methods.
But this is not all.
It comes to the surface now that my partner was previously working as a financial officer of National Private Colleges in South Africa (part of Naspers.com) and had been fired by the company for fraud. The company then filed criminal prosecution and my partner was arrested by Police in the office of his new employer Edutel. My partner wasn't however put to jail, as Naspers sold the Colleges to another company and the company officers appeared to be disinterested in prosecution after many years of delays in the judicial system, so my scheming partner was hadn't been put to jail... I told Southgate Accountants about the former fraud charges against my partner but they still are acting on his instructions seems to me they don't mind!
Do you think this is how an accountant is supposed to act when he is informed of fraud in a company? Or should he be informing the tax office of the issues such as fraud and theft that were brought to his attention repeatedly by a company director and shareholder over one year?
I can only say that after I approached Southgates about the fraud, their bills paid out of my company in the last 12 months are many times higher than the usual yearly bill (coming close to $40,000) if this is not a material interest then I don't know what is. Adam Southgate is getting rich out of this problem and wants to continue being involved (I asked him to resign and he said, NO).
Southgate Accountants keep helping my partner to find solutions to his problems. For example, my partner attempted to wash some funds he got from the fraudulent refinancing ($1.9 million of loans where he forged my signature on loan contracts), by putting the money in the company and then spending them from the company for personal expenses (remember he was trying to present them as a business expense). He would then, naturally, claim it back from the company, which would owe the funds to him. Not a bad way to go about paying $405,000 worth of personal expenditure TAX-FREE, and then the company has more expenses/less profit and not paying tax because it has no profit! (Sweet) Is this tax evasion or tax fraud? Southgate Accountants don't seem to think either.
So what Mr. Adam Southgate did when I told him about the forgeries on bank loans and the money laundry scheme? He put those funds as a sole investment by my partner, whilst I am (according to the bank) a co-borrower to the funds!
This was not a small scam my partner tried to pull off as the funds he invested in the company, $339,000 - three hundred thirty nine thousand dollars! (Yes, he withdrew much more than that.)
But here is more: Adam Southgate gave my partner a document for the Court (yes, we are in legal proceedings regarding all of that), which says that it was my partner (solely) who invested $339,000 into the company!!
When I approached Adam Southgate about the fact that I am actually a co-borrower to the funds and demanded to know how it happened that such document was provided to the Court (without ever been sighted by me or confirmed with me, as the second director of the company), Mr. Southgate wrote to me [quote]: I have never seen irrefutable evidence that these amounts should be treated any other way than we have treated them [end of quote].
I AM A CO-BORROWER TO THE FUNDS (not willingly but according to the bank) what else evidence does Mr. Southgate need??
So, if you are after innovative taxation solutions, come to Southgate Accountants and tell them your story a good story is all you need (my partner has NO documented evidence the funds he stole were taken legitimately).
I have documented evidence to all of the above and more than a year correspondence with Southgate Accountants. All facts above are true and can be proven documentally.
Yes, the amounts are crazy I am getting a headache just thinking about it, giving also that we owe hundreds of thousands to the tax office as my fraudulent partner wasn't paying tax on time and now there is not enough money as it had been lost/spent. The company is losing money on a monthly basis; the good times are over but debts for them are still due. My personal assets are under $130,000 (one hundred thirty thousand) and the banks are after their millions issuing letters demanding payments from me, whilst my fraudulent partner continues to live in a $1.7-million-dollar hilltop mansion. My fraudulent partner has millions of dollars worth of properties registered in his name or the name of the companies where he is a sole shareholder, here in Australia and overseas, and I don't even own my own home!
I am losing sleep and don't know where it's all heading and how long it's going to last in the Court with Southgates providing supportive documentation to my partner showing he was investing money into the company and not showing all the money that had been lost (for example, $573,000 shifted by my partner unauthorized to his own company where he is a sole director and shareholder is not showing in the document provided to the Court as his debt to the company).
I have spent all cash I had on lawyers and it doesn't seem to move anywhere with hearings delayed and moved from one court to another. I now owe my lawyers more than $30,000 in legal expenses for which I cannot pay.
I asked Southgates to provide me with estimations of the company tax, and then Adam Southgate gave me three (3) documents in the space of 10 days quoting different numbers in tax liabilities, $85,000, $180,000 and $270,000, every time he had to be pointed out mistakes in his calculations.
I asked Adam Southgate to resign as the company accountant and have the bills reconciled before the final payment, so that my company doesn't have to pay for all the work Southgate Accountants done for my partner personally, and which were routinely billed to and paid by my company, however, Mr. Southgate still, after six weeks, didn't provide reconciled itemized bills and, as I already mentioned, refuses to step down as the company accountant. (Is this a conflict of interests Adam Southgate worked for my partner personally AND for the company to which my partner shifted $573,000? Mr. Southgate says, NO.)
Adam Southgate is a Chartered Accountant (CA), Registered Tax Agent and Member of the Institute of Chartered Accountants in Australia and should have known better. I am trying to sort out the fraud in my company for already more than a year and Southgate Accountants have been informed about that since March 2008, witnessed hundreds of thousands of dollars being fraudulently put into the company accounts by my partner as a "business expense", but didn't report the fraud to the tax office or other relevant authorities.
I told Adam Southgate I would complain about his professional conduct, but instead of apologizing and rectifying his mistakes, Mr. Southgate threatened me [quote], if you slander my name or my firm then I reserve the right to take the appropriate action as you are doubting my professional integrity which I will not idly sit by and accept. I will do everything necessary to protect my professional reputation. [End of quote]
So, I took due care (unlike Mr. Southgate who has NO documental evidence to back his, let's say it, informal accounting methods) to check and double check all facts in this post. I stand by every fact and number in this post.
Gold Coast, Queensland