• Scenario 4


    All persons mentioned in this scenario are fictional.

    End of attention

    Retired truck driver finds we are in it for the long haul

    Clive, a 71 year-old retired truck driver from Canberra, suffers from arthritis, which is not helped by the cold Canberra winters.

    Fortunately Clive's son, Max, owned a real estate business and found Clive his dream home on the NSW South Coast.

    The five bedroom, two-story house overlooking the beach at Broulee was more expensive than Clive had hoped, but was perfect, with plenty of room for his grand children.

    The proceeds of the sale of his Canberra house didn't cover the cost of his South Coast dream home so he needed to use money from an account his financial planner had opened for him in Vanuatu ten years ago.

    Clive asked his financial planner to send $200,000 from this account to his account with an Australian bank to cover the deposit and legal fees, with the balance of funds coming from the sale of his Canberra house.

    What Clive didn't know was the ATO uses AUSTRAC data to monitor international funds transfers, and Clive's transfer attracted their attention.

    The ATO wrote to Clive seeking information about the funds transfer; however, Clive chose not to respond, hoping it would all just go away.

    However, the ATO was not going away and its subsequent investigation revealed Clive had transferred a significant sum of money to a financial planner who was known to have links to a promoter selling offshore tax minimisation schemes involving secrecy havens.

    The money in Clive's offshore account had matured into a nice nest egg; however, Clive had never declared the interest as income.

    Clive received another letter from the ATO stating he was now the subject of an audit under Project Wickenby for participation in offshore arrangements to minimise tax.

    The ATO prepared a brief and referred the matter to the Australian Crime Commission (ACC).

    The ACC discovered Clive had also purchased a $120,000 sports car four years ago, when he had no apparent source of income except for the age pension.

    Clive was charged with two counts of defrauding the Commonwealth and was also required to pay the tax he had avoided, plus interest and penalties.

    This alerted Centrelink which launched its own investigation revealing that Clive had not declared his offshore assets while claiming the age pension. This resulted in further penalties, leaving Clive virtually penniless.

      Last modified: 05 Jul 2011QC 23475