THE scale of an alleged $165 million tax fraud is “unprecedented” in Australia and could be the biggest white-collar crime the country has ever seen.
The deputy commissioner of the Australian Taxation Office, Michael Cranston, has been charged in relation to the scam, as well as his 30-year-old son Adam Cranston.
Michael Cranston, a 35-year veteran of the ATO, has been issued with a court attendance notice to appear in Sydney’s Central Local Court on June 13 — the same court his son was due to appear in today.
Adam Cranston’s 24-year-old sister Lauren is also facing charges. She is expected to appear in court next month on the same day as her father.
Australian Federal Police officers don’t believe Michael Cranston knew about his son’s alleged activities.
“We are alleging that this is an organised syndicate involved in a significant conspiracy to defraud the Commonwealth,” AFP deputy commissioner Leanne Close told reporters in Sydney.
“The scale of this alleged fraud is unprecedented for the AFP; the response from our members yesterday is a direct response to the level of offending that we have identified during this operation.”
She said $165 million was allegedly removed from the tax pool.
Nine people have been arrested over the alleged fraud investigation, involving the ATO and Australian Federal Police. The eight-month long investigation was codenamed Operation Elbrus.
Adam Cranston is charged with conspiracy to defraud the Commonwealth and was arrested at Bondi during 27 raids on homes and businesses across Sydney on Wednesday.
He appeared via video link at Central Local Court on Thursday and was released on bail, as were two others also alledgedly involved in the criminal syndicate.
“This investigation has uncovered high-level organised activity; it is complex (and) sophisticated,” a source told The Daily Telegraph.
It’s alleged the fraud involved a payroll company which would funnel wage payments through a second tier company, and then only pay the ATO a fraction of the income tax required.
The Daily Telegraph reports Adam Cranston was allegedly a “co-conspirator” in the scam, that was used to fund real estate and a celebrity lifestyle.
His luxurious lifestyle was made up of boats, prime real estate and an orange and blue Ford GT, which is estimated to cost hundreds of thousands of dollars. Photos of the car, which was used in the couple’s wedding, were splashed across Facebook.
According to his LinkedIn profile, Adam Cranston is also the owner and manager of Synep Racing, a motorsports team that races luxury cars like Porsche.
Seized items are displayed at a press conference at the AFP headquarters in Sydney on Thursday. Picture: AAP
Seized items are displayed at a press conference at the AFP headquarters in Sydney on Thursday. Picture: AAPSource:AAP
Some of the cash seized by the AFP. Picture: AAP
Some of the cash seized by the AFP. Picture: AAPSource:AAP
Commissioner Close said authorities would take more time “to see if that is where the conspiracy ends or if there is further charges or further money that has been defrauded.
She said it appeared Mr Cranston’s son asked him to access some information.
“We don’t believe that at this point that he had any knowledge of the actual conspiracy and the defrauding,” she said.
A statement from Andrew Mills, Acting Commissioner of Taxation, confirmed warrants had been executed on a number of people who allegedly held information relevant to the investigation into the massive fraud.
“One of the warrants was served on one of the ATO’s long-serving senior executive officers. That officer has been served with a court attendance notice,” Mr Mills said.
He said the inquiry so far hadn’t revealed evidence of “actual intervention or influence on audit cases or of money being refunded, or of tax liability being changed”.
Mr Mills said: “The information I have to date shows no compromise of the operations of our administration. Our systems, controls and procedures worked effectively and we have been able to successfully isolate and protect the investigation, working well with the AFP over many months to build a picture of what has been happening.”
So far six people have been charged with conspiracy to defraud the Commonwealth, two with money laundering and another with extortion.
Almost 300 officers took part in the raids when 28 search warrants were executed across NSW on Wednesday. More are expected today.
Luxury cars were among 25 vehicles seized under proceeds of crime, as were two planes, artworks, jewellery, Grange wine and $1 million in cash.
Items seized by the AFP in tax fraud syndicate.
Items seized by the AFP in tax fraud syndicate.Source:Supplied
A car being seized.
A car being seized.Source:Supplied
The AFP conducted a raid on a Bondi property yesterday.
The AFP conducted a raid on a Bondi property yesterday.Source:Supplied
A motorbike is one of the items seized after a Sydney raid. Picture: Australian Federal Police
A motorbike is one of the items seized after a Sydney raid. Picture: Australian Federal PoliceSource:Supplied
Two planes have been seized. Picture: Australian Federal Police
Two planes have been seized. Picture: Australian Federal PoliceSource:Supplied
Eighteen residential properties have also been seized by investigators.
Seven of the nine charged overnight will appear at various courts on Thursday.
The alleged fraud involved payroll services.
A company was set up to provided these services to legitimate clients but their payments were transferred to subcontractors controlled by syndicate members, who pocketed the money.
The ATO bill for this fraudulent behaviour dating back to June last year is estimated at $165 million, but could be much more.
Mr Mills conceded the situation was serious.
“Australians must have a tax administration they can trust and the people of the ATO must be of utmost integrity and good judgment. This is even more important for those in leadership positions; I expect our officers not only to follow, but to champion and role model the APS Values and Code of Conduct.”
He had ordered a Code of Conduct investigation into “ a small number” of employees and promised to be “forensic in our examination of what has occurred”.
“The people being investigated have been suspended without pay.”
The ATO was conducting an internal investigation into four officials into whether or not they looked at the material they were unauthorised to do so.
Mr Mills told media today Mr Cranston had “up until this point ... held an illustrious career”.
“We do take it extraordinarily seriously and ... it is of concern that a long- standing officer has been alleged to have been involved in this.”
http://www.news.com.au/finance/money/ta ... 51fec1660a
Naughty, naughty ... very bad people! I guess they will get a slap on the wrist?
