Two men face $1.2m tax fraud, perverting justice charges

Serious Financial Crime Taskforce

This is a Serious Financial Crime Taskforce (SFCT) media release issued jointly by the Australian Federal Police, Australian Taxation Office and Australian Securities and Investments Commission.

Two Sydney men are scheduled to face court today relating to an alleged $1.2 million tax fraud, believed to have been committed through phoenixing activity.

A 50-year-old Casula man and 62-year-old man from Wattle Grove will answer the charges laid by the AFP as a result of an investigation by the ATO-led Serious Financial Crime Taskforce and following a close evidence review by Federal Prosecutors at the Commonwealth Director of Public Prosecutions.

It will be alleged in court that the two men were directors at various times of an employment vetting company and conducted illegal business activities by off-loading assets from the company prior to its liquidation and failing to pay tax owed to the ATO.

Both men were charged with one count of dishonestly cause a risk of loss to the Commonwealth, knowing or believing that there was a substantial risk of the loss occurring, contrary to section 135.1(5) of the Criminal Code (Cth). The maximum penalty for this offence at the time of the offending was five years imprisonment.

Both men have also been charged with attempting to pervert the course of justice, relating to the alleged destruction of corporate records on 22 and 23 November 2016. AFP officers – on behalf of the SFCT – executed search warrants at a Moorebank business premises and a Tahmoor property on 23 November 2016.Burnt items suspected to be corporate records and paperwork were found in the ashen remnants of a fire at Tahmoor.

It will be alleged in court that evidence obtained by the AFP indicated the men deduced a search by law enforcement was impending, and took steps to remove corporate records from their business premises in Moorebank, and allegedly instructed them to be destroyed at Tahmoor.

Both men were each charged with one count of jointly attempting to obstruct, prevent, pervert, or defeat the course of justice, contrary to section 43(1) of the Crimes Act 1914 (Cth), with section 11.2A(1) of the Criminal Code (Cth). The maximum penalty for this offence is 10 years imprisonment.

AFP Commander Operations and Support (Eastern Command) Brett James said people undertaking criminal acts to avoid their tax obligations would continue to face scrutiny from law enforcement.

"Brazen and deceitful is the only way to describe the alleged conduct discovered during this investigation. We will allege in court that these men took numerous steps to avoid detection and then stymy investigators when it became obvious they were the subject of AFP attention," he said.

ATO Deputy Commissioner and SFCT Chief Will Day said the combined capabilities of the SFCT partner agencies enables it to protect the tax and superannuation systems.

"The SFCT, through collaboration of agencies, combined with its data matching capabilities and domestic and international relationships, is committed to identifying and investigating suspected serious financial crime that has the potential to significantly impact the community," Mr Day said.

For more information on the SFCT visit ato.gov.au/SFCT. You can also download the Serious Financial Crime infographic to help recognise the warning signs of financial crime activities including the range of financial crime personas.

You can report tax crime activities to the ATO online or by phoning 1800 060 062. All reports are anonymous.

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