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10-66AD Sydney man sentenced on early access to super charges

Monday 29 March 2010

Mr Atan Ona Kassongo, of Castle Hill, New South Wales, has been sentenced in the District Court of New South Wales by Judge Zahra to two years imprisonment, to be released after eight months, for unlawfully allowing the early access of superannuation benefits. Mr Kassongo’s release is conditional upon entering a $1,000 security to be of good behaviour for a period of three years.

Mr Kassongo, was convicted under sections 62 and 202 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act) after an Australian Securities and Investments Commission (ASIC) investigation found he had failed to ensure his self-managed superannuation fund known as the Kassongo Superannuation Fund (KSF) was maintained in accordance with the sole purpose test. Mr Kassongo was trustee of the fund at the time of the offence.

The sole purpose test prohibits trustees maintaining self-managed super funds, for any purpose other than to provide retirement benefits for members. A trustee who maintains a self-managed super fund for other purposes contravenes the law.

The preserved superannuation benefits of 192 superannuants totalling $4,055,043 were deposited by Mr Kassongo into the bank accounts of the KSF. These funds were rolled over from 56 complying superannuation funds. Mr Kassongo then used the KSF to obtain early access to these benefits by withdrawing and distributing the funds to the superannuants and agents who helped him.

Mr Kassongo retained over $605,000 for himself by way of a commission. At the time the KSF received the superannuation benefits from the complying superannuation funds, Mr Kassongo was aware that he had an obligation to preserve these benefits until the superannuants had satisfied a condition of release but had no intention of doing so.

On 10 July 2009 Mr Sonatane Haitoni Hafoka of Shalvey, New South Wales, was given a suspended sentence of six months imprisonment after pleading guilty to aiding and abetting Mr Kassongo to allow the early access of superannuation benefits (refer AD09-121).

These convictions follow an investigation conducted with the assistance of the Australian Taxation Office (ATO). Trustees of self managed superannuation funds and their members receive particular taxation benefits for complying with the requirements of the SIS Act. People can only access their superannuation early in very special circumstances. For further information, individuals should contact the trustee of their fund or the ATO.

The Tax Office reviews the taxation returns of superannuants who unlawfully obtain the early release of their superannuation benefits. These superannuants may be liable for unpaid tax as well as penalties.

The Commonwealth Director of Public Prosecutions prosecuted the matter.

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