AFP busts $17m payroll money laundering scheme
Accountantsdaily
July 22, 2020
AFP
busts $17m payroll money laundering scheme
A joint agency investigation
into an alleged $17 million payroll tax fraud syndicate has resulted in the
arrest of 12 individuals across three different states.
On Tuesday, the Australian Federal
Police executed search warrants at 10 locations across Sydney, nine in
south-east Queensland and two in the ACT in a co-ordinated strike against a
transnational and serious organised criminal syndicate using labour hire and
payroll companies associated with the building and construction industry to
defraud the Commonwealth.
Charges have been brought
against 12 people, include a 49-year-old man from Surfers Paradise, who is
alleged to be the director of this organised crime syndicate comprising of a
mix of financial industry experts and former bankers.
It will be alleged in court
that the syndicate had effective control of labour hire companies undertaking
legitimate work in the building and construction industry.
The syndicate then
outsourced the processing of their payroll services to separate payroll
companies, which they allegedly also operated for the sole purpose of not
paying mandatory pay-as-you-go withholding (PAYGW) tax to the ATO.
Employee and contractor
wages, superannuation and insurance were correctly paid, but money allocated to
be paid to the ATO for tax obligations was diverted and allegedly laundered
through a variety of other entities.
The total value of the fraud
has been calculated at more than $17 million since July 2018.
When a substantial tax debt
was accrued by these payroll companies, the syndicate would abandon them and
create new payroll companies in an attempt to continue the fraud and conceal
their illegal activities.
These funds were moved
through other entities in an attempt to disguise its origin, before eventually
being transferred into bank accounts controlled by syndicate members and their
associates, including those belonging to a senior member of an Outlaw
Motorcycle Gang (OMCG) and the partner of an organised crime figure currently
in prison.
The AFP has now restrained
assets allegedly belonging to the criminal syndicate, including 12 real
properties, 17 motor vehicles, 65 bank accounts, a caravan and a boat with a
total value of approximately $21 million.
The Singapore Police Force
have also assisted the AFP in identifying and restraining approximately $1.3
million held in Singapore bank accounts.
The joint agency
investigation included the ATO and ASIC as part of the Serious Financial Crime
Taskforce (SFCT) as well as assistance by major banks ANZ and Westpac.
AFP Commander Investigations,
Eastern Command, Kirsty Schofield said yesterday’s activity demonstrated how
the SFCT have developed new methods to counter complex fraud.
“Transnational and serious
organised crime groups are evolving. No longer do they target any specific
crime type or commodity, they adapt to their environments by recruiting
professional enablers to provide experience in the financial, legal or any
other field they feel can earn them money,” Ms Schofield said.
“This investigation is just
one example of how the AFP stays ahead of these groups, formulating innovative
techniques to combat the complex and rapidly changing environment of organised
crime in Australia.
“The AFP is always looking
to outsmart these organised crime groups — we make sure we have investigators
with specialist skills and look to work with partner agencies and private
industry to counter a broader range of criminal offending. We will continue to
target organised crime at their most vulnerable, namely when they try to
legitimise their illegally obtained proceeds of crime.”
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