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Manhattan property developer turned New Zealand winemaker jailed for tax fraud

An American property developer who sailed to New Zealand on a luxury yacht to set up a wine business has been jailed for tax fraud.

Colin David Rath, 59, pleaded guilty to two counts of forgery and 39 counts of dishonestly using tax returns at Christchurch District Court.

He was sentenced to three years and seven months in prison for conducting the NZ$1.3m tax fraud.

Rath grew up in Connecticut and worked as a property developer in New York before leaving the United States in 2016.

He wrote a book called It is What it is: A True Manhattan Real Estate Nightmare with a Silver Lining, which delves into the New York property boom of the 2000s.

In 2015, he was living in a US$3.4m luxury apartment in Manhattan, replete with two waterfalls feeding a koi pond in the living room.

However, he told the New York Times that he planned to leave the country after declaring that ‘this is not the America I knew’.

Rath sailed to New Zealand with his family on a NZ$950,000 yacht in 2016 and entered the country on an entrepreneur work visa.

After arriving in the Waipara region in North Canterbury, he purchased a vineyard with around 35,000 vines, which produces Riesling, Pinot Noir, Sauvignon Blanc, Chardonnay and Gewürztraminer.

He set up two businesses – New York Grape Escape Ltd., and Fiddler’s Green Vineyard & Bistro, which traded as Waipara Winds Ltd.

However, the businesses struggled, and Rath ended up filing fraudulent goods and services tax (GST) claims in a bid to cover his costs.

When he submitted a tax return in April 2021, Rath declared that he spent NZ$1.6m on a spec house, a subdivision and work on a bed and breakfast.

However, Inland Revenue investigators visited the property and discovered that the spec house belonged to someone else.

The building company he named in the contract revealed that it had worked for Rath, but it had not built a spec house and it had not been paid for work completed on his property.

Investigators realised that he had filed fraudulent GST returns worth NZ$1,506,833.81 between 2017 and 2021, and that he had received NZ$1.3m.

They also discovered that he had forged at least 13 immigration documents to obtain the entrepreneur residency.

At a sentencing hearing this week, Judge Quentin Hix gave Rath credit for pleading guilty, showing remorse and making efforts towards reparation.

However, he said that the former property developer had ‘crossed a line’ when sentencing Rath to three years and seven months behind bars.

Prosecutor Paul Saunders said that Rath has not yet paid back any of his ill-gotten gains. He sold a Tesla, but he used the money to pay for his daughter’s university fees instead, and Saunders said this indicated a lack of remorse.

Rath said he regretted letting his family down. He hugged his wife before he was taken into custody to begin his sentence.

New York Grape Escape has been wound down, and the Fiddler’s Green business is now in receivership.


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