A Tauranga health and fitness trainer who orchestrated a prolonged and elaborate series of tax frauds has been sentenced to three years and five months in prison. Karina Charmaine Longville, who also used the aliases Knedler and Hollows, was sentenced in the Tauranga District Court on a raft of charges brought by Inland Revenue (IR), the Department of Internal Affairs, and the Police.
The sentence covers multiple offences, including tax evasion, accessing a computer system to obtain Working for Families Tax Credits, and using forged documents. The court heard that over a period of three and a half years, Longville consistently and repeatedly supplied false information to authorities, ultimately obtaining or attempting to obtain $142,452.50. She received a concurrent sentence of two years specifically for the tax fraud component of her offending.
The case highlights the serious consequences of tax fraud, a crime which undermines the funding of public services that all New Zealanders rely on. Inland Revenue has stated its commitment to prosecuting such cases to maintain the integrity of the tax system and ensure a level playing field for honest taxpayers. Similar issues have surfaced in professional sports, where Moana Pasifika faces axing from Super Rugby.
Working for families fraud
A significant part of Longville’s offending involved the Working for Families (FAM) tax credit system. This government assistance programme is designed to make it easier for low-to-middle income families with dependent children. The amount paid is based on the principal caregiver's annual income.
Beginning in December 2020, Longville legally received FAM payments for the shared care of her four children. However, in May 2021, she began earning self-employed income which she failed to declare in her tax returns for the 2022, 2023, and 2024 financial years. This failure to update her income details led to significant overpayments of the tax credit.
The offending was compounded when the children ceased to live with her. Longville did not inform Inland Revenue of this change in her circumstances and continued to receive the payments into the 2025 income year. The court noted that Longville was fully aware of her obligations to report her income, as she had a previous prosecution for similar dishonesty-related offences, indicating a sustained pattern of deception.
Fictitious businesses and false invoices
Longville’s fraudulent activities extended into the business world, where she used multiple companies and aliases to evade income tax and claim illegitimate GST refunds between 2022 and 2024. She failed to declare any of the income she received through three separate businesses during this period.
In 2023, she established a company named Kaizen 1991 Limited, using another person’s name to register him as the director without his knowledge. Shortly after the company was registered with Inland Revenue, the associated bank account was changed to a joint account with Longville as one of the account holders. Kaizen 1991 Limited never actually traded or provided any services.
Despite this, Longville made several attempts to claim GST refunds, which were ultimately declined by IR after she failed to provide requested information. In April 2024, she escalated her attempts by emailing IR several false documents, including a fraudulent invoice for a $65,000 vehicle, in an effort to substantiate her claims.
The Strand Café collapse
The deception continued with the establishment of The Strand Café and Bar 2024 Limited (TSC) in April 2024, which Longville set up using one of her aliases. The business venture was short-lived, entering receivership just three months later on 18 July 2024.
She registered the company for GST and as an employer, providing her personal bank account for the business. Longville then filed multiple fraudulent GST returns supported by false documents. The depth of the deception was revealed in August 2024 when a search of her house uncovered sales records for the café showing approximately $20,000 in cash sales that had never been declared for tax purposes.
Furthermore, Longville failed to meet her obligations as an employer, deducting PAYE (Pay As You Earn) tax from her employees' wages but not paying it to Inland Revenue. This left her staff with potential tax liabilities and deprived public services of crucial funding. The failure to manage local businesses correctly can have significant impacts on the community, an issue seen in other local contexts such as the recent debates around the Bay of Plenty water partnership.
The combination of these schemes across multiple years and entities painted a picture of calculated, repetitive criminal behaviour. The multi-agency investigation demonstrates the coordinated efforts of New Zealand authorities to combat complex financial crime. The final sentence reflects the seriousness of Longville's actions and serves as a warning to others who might consider defrauding the tax system, which is based on the principle of voluntary compliance as outlined by Inland Revenue.
