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  • Justice served in largest ever prosecuted tax fraud

    ATO statement

    I am pleased with the outcome of today’s court hearing and the successful closure of this landmark tax fraud case. We have been clear that we take tax fraud seriously and are committed to investigating and bringing to justice those who attempt to evade their tax obligations.

    The investigation and subsequent prosecutions displays the strength of the system and that working with our partner agencies gives the Commonwealth a strong capability to collectively detect, deter and deal with this type of complex tax fraud arrangement.

    Today the Supreme Court of NSW sentenced Michael Issakidis to 10 years and three months’ jail for his involvement in the largest prosecuted tax fraud case in Australia’s history. He and co-conspirator Anthony Dickson deliberately absorbed $450 million of otherwise assessable income through falsely created losses overseas to evade $135 million in corporate tax netting themselves $63 million in fees.

    Today’s result follows the sentencing of co-accused Dickson, who in 2015 was sentenced to 11 years’ jail, later increased to 14 years on appeal. Dickson’s sentence marked the longest ever jail time for tax fraud and money-laundering.

    The significant sentences handed down to both Issakidis and Dickson bring to a conclusion the multi-year fraud investigation by the Serious Financial Crime Taskforce involving members from the ATO and the AFP.

    The pair created a web of false identities to aid their deception and siphoned money through the UK, Hong Kong and the UAE via fake domestic and international companies to fund their lavish lifestyles, netting them approximately $63 million.

    While the scheme was incredibly complex - involving the worldwide movement of funds - this didn’t mean it couldn’t be detected. Parties who pursue dishonest and fraudulent behaviour, including the use of abusive trust arrangements and the guise of commercially justified business transactions are on notice that we will use all our available powers, including partnering with law enforcement agencies, to bring them to justice.

    The sentencing of Issakidis and Dickson are a wake-up call to the lawyers and accountants who devise and promote tax evasion schemes and never think they could go to jail. Well, the sentence handed down today, and Dickson’s sentence of 14 years, shows that those involved in tax evasion schemes will go to jail, and go to jail for a long time.

    There are serious consequences and personal impacts for these crimes. Those unethical lawyers and accountants devising these schemes don’t want to have to face the reality of having to going home, pack your bags and to tell your family “daddy’s going to jail”.

    Our enforcement strategy for dealing with complex financial fraud arrangements is robust and effective. Through the partnership of the Serious Financial Crime Taskforce and Criminal Assets Confiscation Taskforce, we will continue to successfully uncover significant fraud operations, and bring the perpetrators to justice.

    Chris Jordan AO

    Commissioner of Taxation

    Australian taxation Office

    AFP statement

    The success of this investigation is a testament to the tenacity, dedication and collaboration of the AFP, ATO and CDPP members involved.

    Together, our members investigated one of the largest and most complex tax fraud schemes in Australia. The close working relationships and combined specialist skills of the AFP and ATO members were vital to the success of the investigation.

    In particular, I’d like to mention the long-term commitment of our officers, who pursued this matter for a number of years. 

    In 2012, investigations culminated in six search warrants being executed in New South Wales and Queensland.

    The AFP-led Criminal Assets Confiscation Taskforce restrained more than $54 million in assets under Commonwealth Proceeds of Crime Legislation, including real estate, a number of luxury cars, and yachts. This was the first time the AFP conducted litigation to restrain assets on behalf of the Taskforce, enabled by legislative amendments in early 2012.

    Tax fraud is often complex but, essentially, it can be described as theft. Evading Australian tax obligations directly disadvantages the Australian community. Money raised through tax is used for critical services and infrastructure to benefit a large number of law-abiding taxpayers.

    The AFP and its partners continuously work to preserve the integrity of the Australian economy. The success of this investigation serves as a warning to those who seek to exploit public funds for their private gains.

    The work done for today’s successful outcome continues in the AFP led SFCT. Since the establishment of the SFCT in 2015, five people have received custodial sentences following prosecution and there are currently 30 criminal, civil and intelligence matters in progress.

    Leanne Close

    Deputy Commissioner Operations

    Australian Federal Police

    Supplementary material is available upon request. Please contact the ATO media unit to obtain a copy.

    Last modified: 29 Mar 2018QC 54937