A joint-agency investigation with the ASIC, Australian Federal Police (AFP) and the Australian Taxation Office (ATO) into a $17 million fraud has led to charges against 12 co-conspirators across the east coast of Australia.
AFP investigators executed search warrants at 10 locations in Sydney, 9 in south-east Queensland and 2 in the ACT on Tuesday in a coordinated attack against a transnational organised criminal syndicate.This investigation started in December 2018. The AFP has partnered with the Serious Financial Crime Taskforce to aim this conspiracy to siphon off money that should have been payed to the ATO.
The fraud amounts to over $17 million since July 2018. The money found its way into bank accounts controlled by syndicate members and their associates.
The organised criminal syndicate had control of labour hire companies undertaking legitimate work in the building and construction industry. The processing of their payroll services were then outsourced to separate companies which usually a legal practice. However, the syndicate also operated and controlled these payroll companies for not paying mandatory Pay As You Go Withholding (PAYGW) tax to the ATO.
The employees of the labour hire companies were paid correctly but the money which had to be pau dot ATO were diverted and allegedly laundered through a variety of other entities. When a substantial tax debt was accumulated by the payroll companies, the syndicate would abandon them and create new ones to continue the fraud and conceal their illegal activities.
The funds were then moved through other entities to disguise the origin and finally would end up in into bank accounts controlled by syndicate members and their associates.
The alleged director of this organised crime syndicate, a 49-year-old man, was arrested on Tuesday. His immediate co-conspirators included financial industry experts and former bankers, demonstrating the level of expertise required to operate and facilitate such a complex fraud.
Seven men were arrested in total in Queensland, they are expected to be extradited to NSW to face court in the near future. Another two men and two women were arrested in Sydney and a man in the ACT was served with a court attendance notice.
The AFP has obtained restraining orders for assets that allegedly belong to this criminal syndicate. They include 12 real properties, 17 motor vehicles, 65 bank accounts, a caravan and a boat with a total value of $21 million. The Singapore Police Force assisted the AFP in identifying and restraining approximately $1.3 million held in Singapore bank accounts.
The ATO will take action to target the outstanding tax obligations incurred by this syndicate and the ASIC will target corporate compliance and regulatory issues.