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  • Australia's largest tax fraud case

    This infographic provides more detail about how the scam was set up and where the funds were moved to (PDF 271KB)

    The scam – how it was set up

    1. Four trusts were created to facilitate transactions between ANZ and large corporates under ‘sale and leaseback’ arrangements.
    2. Complex arrangements were set up via NeuMedix health group for the purpose of obtaining a tax benefit. The arrangements resulted in tax liabilities being distributed to NeuMedix from the ANZ and other large companies in return for lesser cash payments.
    3. NeuMedix entered into agreements with Athena Health Patents Incorporated (Cayman) to acquire medical patents/inventions relating to the treatment of cancer and a surgical clip.
    4. Inventors were provided with a small amount of research funding and a promise of further payments if commercially successful to assign intellectual property to Athena Patents.
    5. Karkalla biotechnology group overvalue the patents in valuations provided to NeuMedix to convince the ATO that the patents were real.
    6. Athena Health ‘sells’ intellectual property to NeuMedix at an inflated price.
    7. Dampier Finance purportedly provided funding to NeuMedix to buy patents. No actual funds were exchanged. Involvement of an international finance company intended to convince ATO transactions were legitimate.
    8. NeuMedix falsely claims tax depreciation expenses on the acquisition of intellectual property, to ensure they have no actual tax liability from their involvement in the sale and leaseback arrangements.

    Principal business activities for NeuMedix health group include:

    • investing
    • developing and the commercialisation of medical technologies patents, and
    • related intellectual property.

    Directors

    All companies are controlled by Anthony Dickson and Michael Issakidis:

    • NeuMedix Health Australasia Pty Ltd
    • Athena Health (Cayman Islands company)
    • Karkalla (fake Samoan company)
    • Dampier Finance (Samoan financier)
    • Athena Global (UAE)
    • Meed Inc (UAE).

    Proceeds of a crime

    All companies are controlled by:

    • $63,715,000 – received from four unit trusts
    • $68 million – actually received.

    The loss

    The loss or risk of loss that was intended to be caused to the Commonwealth was:

    • 30% of approximately $450 million
    • approximately $135 million in the relevant years.

    The balance of $300 million understated income had no tax paid on it in later years, with another $100 million tax not paid.

    Money laundering – where the funds moved

    • Dampier Finance – money was laundered from Australia into bank accounts in the United Kingdom (via Dampier Finance).
    • Intrepid – money was transferred to Hong Kong (via Intrepid and Flying Dragon International).
    • Athena Global – money was transferred to the United Arab Emirates (via Athena Global and Meed Incorporated).
    • Athena Health Patents Incorporated – money was purportedly transferred to Athena Health (Cayman Islands) via Dampier Finance (Samoa).
    • NeuMedix health group – $63 million went back to Australia through loans paid to directors and associates.

    NeuMedix made $63 million

    NeuMedix made $63 million in cash (proceeds of crime) from their involvement in the structured finance arrangements.

    Money was spent to fund lavish lifestyles, including:

    • cars – Rolls Royce, Lamborghini, Aston Martin, Mercedes, BMW
    • yachts
    • shopping
    • holidays
    • properties.
      Last modified: 08 Nov 2019QC 60553