29/04/2010

Recently, Mr Atan Kassongo was sentenced to two years imprisonment by the District Court of New South Wales for unlawfully allowing the early access to superannuation benefits.

The Court held that Kassongo arranged for individuals to roll over their superannuation balances from their complying funds to a self-managed superannuation fund controlled by Kassongo.  He then withdrew and distributed funds from the recipient SMSF account to the individuals and their agents, pocketing a handsome commission of approximately $600,000.

For some time, the ATO has warned against illegal early release schemes.  Yet 192 individuals rolled over their super (totalling in excess of $4M) to Kassongo’s SMSF.  Those individuals may now be liable for penalties.  Advisers and agents to such schemes may also be prosecuted.

The ATO has frequently circulated publications to educate SMSF trustees and members as to when super benefits may be accessed.  It has also cautioned trustees against possible SIS breaches by using Fund resourses to “prop up” businesses being carried on by related party enterprises and is targeting these activities in its compliance program.

It is vital trustees, members and their advisers clearly understand when super benefits may be accessed to avoid civil and criminal penalties and non-compliance of the SMSF.  

For more assistance and advice on Superannuation, please contact Peter Townsend of TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.