Former real estate agent sentenced for tax evasion

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Pauline Johnstone claimed over half a million dollars in expenses.  (File photo)

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Pauline Johnstone claimed over half a million dollars in expenses. (File photo)

A former real estate agent who claimed half a million dollars in expenses is under house arrest after a fraud conviction.

Pauline Michelle Mere Johnstone, who was sentenced last month, pleaded guilty to a representative charge of knowingly providing altered, false, incomplete or misleading GST returns to obtain more than $45,000 to which she was not entitled .

According to a statement from the Inland Revenue Department, Johnstone claimed expenses of $549,927.00 and reported income of $21,900.67 between October 1, 2016 and January 31, 2018. She received GST refunds from $45,105.16.

Johnstone was sentenced to five months house arrest and ordered to pay $10,000 in reparations.

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Johnstone has worked as a real estate agent in Northland and Taranaki, and now appears to live in the Nelson area.

In 2015, she was hailed as a hero by saving the life of a baby who choked on a cookie.

In 2019, she and her husband were subject to a tenancy court ruling after their tenant claimed the landlord couple failed to make repairs to the house. The house was drafty, with broken windows and only one working electrical outlet. The Johnstones were ordered to pay $3,120 to their tenant.

That same year, the couple also faced a court ruling as tenants, ordered to pay $10,845 to their landlords for extensive damages and a number of missing items in the rental property.

A Real Estate Authority spokesperson said Johnstone was not currently licensed.

Last year, the IRD announced a crackdown on estate agents who underreport their income or overstate their expenses in order to pay less tax than they should.

IRD’s head of hidden economy Trevor Jeffries said estate agents typically claim high levels of expenses relative to their income.

“Common errors include claims for gifts, clothing and personal care, meals and entertainment expenses, as well as issues such as calculating home office and vehicle expenses, as well as understating of the GST.

“Inland Revenue believes the practices are widespread and we need to act,” Jeffries said.

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