The year that tax crime didn’t pay

There are a few contenders for Australia’s biggest tax fraud but the Plutus Payroll scam, credited with diverting $105 million, would make the podium and 2023 drew a line under the ATO’s long-running Elbrus investigation with even longer sentences for the core conspirators.

Between May and August, the Supreme Court of NSW imposed extensive terms on five of the plotters, culminating in 15 years’ jail for “key facilitators” Jason Onley and Adam Cranston, whose father Michael was a former deputy ATO commissioner.

It was a landmark win for the Serious Financial Crime Taskforce, a “formidable alliance of government agencies” set up in 2015 and led by the ATO. They include just about every enforcement body you can think of including the AFP, Australian Border Force, ASIC and AUSTRAC.

Just a few months earlier, the SFCT had been given a $220 million pat on the back in the budget that merged its operations with the Serious Organised Crime program and extended funding to FY2026–27.

“The extension and merging of the SOC program will maximise the disruption of organised crime groups that seek to undermine the integrity of Australia's public finances,” the ATO said.

“Continued funding allows us to leverage the capabilities and powers of Commonwealth law enforcement and regulatory agencies. It will also enable the SFCT to keep sharing our collective knowledge, resources and experience to target the most serious and complex forms of financial crime that present the highest risk to Australia's tax and superannuation systems,” the ATO said.

The merger broadened the SFCT’s already wide ambit of tackling cyber crime, offshore tax evasion, COVID-19 package fraud, money laundering, gold and tobacco tax evasion, GST fraud and even electronic sales suppression tools, which effectively sideline your local cash register.

The SFCT, in one of its final communications for 2023, said it was focused on technology-enabled crime, value flows between criminal syndicates and professional enablers, which include dodgy bankers, lawyers and, naturally, accountants who help others evade tax.

The Plutus jail terms were also just the headline items in a long list of wins for the taskforce last year that included, in December alone:

• A three-and-a-half year jail term for a Victorian man who attempted to claim almost $500,000 through 40 fraudulent Jobkeeper applications.

ATO deputy commissioner and SFCT chief John Ford said: “This outcome demonstrates that where people deliberately set out to exploit the system, we will work with our partner agencies through the SFCT to take action. Compliance is firmly on our radar.”

• Eight-year jail terms for Cedric Adrian Millner and Jonatan Kelu for a gold bullion GST scam that resulted in $40 million lost revenue.

An ATO-led investigation, known as Operation Nosean, found the two men purchased GST-free gold bullion, refashioned it into scrap and then sold it inclusive of GST to a gold refiner.

It said Investrix Pty Ltd, of which Kelu was the sole director, then claimed GST input tax credits in BAS by falsely stating that the GST-free gold bullion was purchased inclusive of GST under the GST second-hand dealers rules, which resulted in approximately $40 million of lost revenue.

Mr Ford said the taskforce had been concerned about precious metal fraud for some time.

“This outcome sends a clear message to the community that we have robust systems in place to stop all forms of financial crime, including those that involve gold bullion,” he said.

• Three years’ jail for Queensland woman Deborah Martin who tried to claim $283,000 in fake GST refunds.

The ATO said between January and March 2022, Ms Martin lodged fake BAS to claim fraudulent GST refunds and it was just the latest result of Operation Protego, which was set up to counter a social media-fuelled avalanche of similar claims by more than 57,000 Australians.

It was also one of just a handful of wins for Operation Protego, which will have its work cut out this year to track down all the money lost to the GST scams, with some reports suggesting the figure is substantially higher than the ATO’s admitted $1.2 billion.

The result has been a tighter compliance regime around GST refunds.

“We have implemented system changes that strike a different balance between making it easy for people to get into the business tax system and harder for those who should not be there.”

But the ATO will be counting on Operation Protego to deliver more convictions this year to ensure that GST crime, along with all the other fraudulent activities it catches, still fails to pay.