Financial crime case studies
While the majority of people comply with their tax and superannuation obligations, there are a small percentage of people who deliberately abuse the tax and superannuation system for their financial benefit.
Financial crime is not victimless and has a serious economic impact on the community. It decreases the revenue that is available to fund essential community services. Funds that are illegally obtained are often used to facilitate other crimes causing real harm to real people.
Our case studies demonstrate that we will prevent, detect, disrupt and bring the perpetrators of financial crime to account.
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GST fraudster sentenced over multi-million dollar scheme
On 23 November 2020, following a successful joint investigation by the Australian Taxation Office (ATO) and Australian Federal Police (AFP), a 38-year-old fraud syndicate member was convicted in the Melbourne County Court for conspiring to defraud the Commonwealth of GST refunds totalling over $5 million.
Michael Ray was a senior partner in a scheme where confidential taxpayer information was illegally obtained and used to create false entities and Australian business numbers (ABNs) and register them for GST. The fraud syndicate then lodged business activity statements (BAS) claiming false GST refunds. The refunds were directed to bank accounts that had been created using the stolen identities.
The scheme was uncovered by a taxpayer when they conducted a Google search and discovered their personal details located in a spreadsheet titled ‘wolf2012’. The taxpayer reported what they had found to both the police and the ATO. The taxpayer’s discovery uncovered a den of deceit for the agencies involved.
Mr Ray, the last pack member, pleaded guilty to conspiracy with the intention of dishonestly obtaining a gain from the Commonwealth. He was sentenced to five years imprisonment, with a non-parole period of three years, bringing the eight-year long joint investigation to a close.
Mr Ray's sentencing follows the sentencing of the scheme's orchestrator, Marc Christian, in May 2020. Mr Christian was sentenced to 12 months imprisonment, to be released after six months on a recognizance order, for money laundering and five years imprisonment, with a non-parole period of three years, for conspiring to dishonestly obtain a gain from the Commonwealth.
All convictions in relation to this matter are a successful result under the partnership of the ATO and AFP, who often work together to investigate serious criminal activities.
Tax crime affects the whole community. It reduces the amount of revenue available to fund essential community services.
This case demonstrates the power of tip-offs from the community. A tip-off could be the missing piece of the puzzle we need to successfully prosecute someone who is committing tax crime.
If you know or suspect that someone may be committing tax crime you can report it by either:
Previous case studies
Two decades. Two agencies. One investigation.
On 17 August 2020, Philip Northam faced the Brisbane District Court for his involvement as a key promoter in an intricate asset stripping arrangement.
He, and four other men who have previously been sentenced, initially touted that all tax laws are invalid and that no-one (persons or companies) need legally pay any tax. Their clients with companies that owed tax soon found that, despite their claims, we were pursuing those companies to recover the company tax they owed.
The fraudsters then established an intricate asset stripping arrangement to strip Australian companies of their assets and leave them in a position where they were unable to pay their tax liabilities.
The illegal scheme offered companies with a tax liability a way to transfer all assets of the company to directors and shareholders, leaving the company unable to pay its tax. Once the assets of the company were stripped, the company was dissolved. New directors and shareholders were put in as straw entities that had no means or intention to pay the tax liabilities.
Northam was sentenced to six years jail for his involvement in the scheme. This case demonstrates our commitment to maintaining the integrity of our tax system by catching those who evade their tax obligations no matter how long it takes.
The conviction of the fifth and final fraudster has brought the 19-year-long joint tax fraud investigation by the Australian Taxation Office and Australian Federal Police to a close. The investigation also resulted in almost $4.5 million of lost revenue being recovered. We are tenacious when it comes to taking legal action against people who deliberately facilitate tax evasion arrangements.
Our financial crime case studies demonstrate that criminals who dishonestly target financial or revenue systems to extract money and misappropriate or hide illicit funds will be caught and prosecuted.