• Organised crime

    Today's globalised economy presents more opportunities for organised crime groups to launder illicit funds and facilitate or disguise illegal activity. These activities range from money laundering and illegal drug dealings to tax evasion, fraud, profit extraction schemes, cyber-crime and firearm offences.

    What is organised crime?

    Organised crime refers to offences involving two or more offenders as well as substantial planning and organisation.

    People who commit these offences – such as criminal syndicates and outlaw motorcycle gangs – often use sophisticated methods and techniques to perpetrate their crimes.

    Organised crime is a national security threat that costs Australia between $10 billion and $15 billion annually. These costs affect all Australian governments as well as the economy, businesses and the broader community. Attempts to undermine the tax system can result in less money for essential services like hospitals, schools and roads, and erode community confidence in the fairness and effectiveness of the system.

    Tackling organised crime

    We work closely with Australian, state and territory agencies to support the Australian Government's strategic, capability-led approach to combat serious and organised crime.

    Sharing information with other agencies, as allowed by law, helps to create a more accurate picture of organised crime in Australia and ensures our efforts are targeted at the most significant threats.

    Our combined data holdings, intelligence and analytical capabilities, together with our criminal and civil capabilities, make us very effective in identifying and treating unexplained wealth generated by serious and organised crime.

    Case study: identifying suspicious refunds uncovers organised money laundering

    We contacted a state law enforcement agency and the Australian Crime Commission (ACC) when our refund fraud analytical models identified suspicious GST refund patterns. A joint agency operation identified a financial adviser who was helping organised crime groups launder money through complex business structures.

    Using their special powers, the ATO, state police and the ACC were able to gather specific intelligence on strategies designed to avoid tax and superannuation obligations, tax evasion through 'phoenix' activities, fictitious entities and cash-in-hand payments.

    Based on the initial intelligence, the ATO was able to:

    • identify, by working with law enforcement agencies, all of the financial adviser's clients and potential links to organised crime entities
    • compare the client base with those of other agents
    • identify a number of entities not meeting their current lodgment obligations
    • identify significant wealth accumulation through related entities
    • compare the wealth of the private group to their tax performance to identify unexplained wealth.

    This sophisticated organised criminal network was able to be dismantled because we worked with law enforcement agencies using a co-ordinated strategy. Twenty people were charged with multiple offences, including tax offences. Custodial sentences were significant, with up to nine-and-a-half years for the tax offences.

    A number of civil sanctions were also applied as a result of subsequent audits, including tax assessments, with additional heavy penalties and director penalties. Debt collection strategies were also put in place, including garnishee notices, Mareva injunctions, and departure prohibition orders, to secure payment for the debts.

    We also liaised with the Tax Practitioners Board to ensure that the financial adviser was deregistered and will be unable to practise again once released from prison.

    Last modified: 03 Aug 2015QC 33618