Joint taskforce arrests 12 over alleged crime syndicate fraud

Joint taskforce arrests 12 over alleged crime syndicate fraud

Authorities have arrested 12 individuals linked to an alleged criminal syndicate after an 18-month operation targeting tax fraud, including seven men arrested in Queensland who are expected to be extradited to NSW to face court.

The Australian Federal Police (AFP), Australian Taxation Office (ATO) and Australian Securities and Investments Commission (ASIC) allege around $17 million that should have been paid in tax was funnelled to syndicate members' and their associates' bank accounts through phoenix payroll services providers.

These payroll companies were used by construction labour hire companies allegedly connected to the syndicate's alleged director George Alex, while the Sydney Morning Herald reports one of the companies involved was allegedly linked to jailed drug boss Michael Ibrahim.

Authorities allege Alex's primary co-conspirators included a mix of financial industry experts and former bankers, demonstrating the level of expertise required to operate and facilitate such a complex fraud.

The arrests were the result of search warrants executed by the AFP yesterday at 10 locations across Sydney, nine in south-east Queensland and two in the ACT.

Seven men arrested in Queensland are scheduled to appear before Southport Magistrate's Court tomorrow, two men and two women were arrested in Sydney, while a man in the ACT was served with a court attendance notice to face court in NSW on 3 September 2020.

The AFP has frozen assets allegedly belonging to or under the effective control of this 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.

ANZ Bank and Westpac have also provided significant assistance to the investigation.

AFP Commander Investigations, Eastern Command, Kirsty Schofield, says yesterday's activity is the result of outstanding detective work by AFP investigators, who developed a unique approach this syndicate, cutting short what would have been a long-term income stream for organised crime.

"Transnational and serious organised crime groups are evolving," says Schofield.

"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.

"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."

She says the AFP is always looking to outsmart organised crime groups by partnering private industry to counter a broader range of criminal offending, while also making sure it has investigators with specialist skills.

"We will continue to target organised crime at their most vulnerable, namely when they try and legitimise their illegally-obtain proceeds of crime," she says.

ATO Assistant Commissioner Aislinn Walwyn, who leads the agency's operational activity under the Serious Financial Crime Taskforce (SFCT), says these arrests show that the taskforce is well equipped to deal with the most serious cases of financial crime.

"A common theme of serious financial crime is a business that may appear legitimate on the surface, but once you peel back the layers, you discover a web of well-organised syndicated activity, like phoenixing, which causes real harm to people's livelihoods and lines the pockets of people who abuse the system," says Walwyn.

"The SFCT is focused on pursuing people who deliberately try to rip off the country by evading their taxes. Not complying with tax obligations is not a victimless crime -  the whole community is impacted by this behaviour. Revenue loss is a significant injury suffered by all Australians.

"Together, we have pieced together a very complex set of arrangements involving members of a syndicate allegedly engaged in fraud, phoenix activity and tax evasion."

An ASIC spokesperson says this investigation highlights the importance of ASIC's position as a member of the SFCT to conduct joint agency work into serious financial crime and illegal phoenix activity, which continues to be a priority.

"ASIC views seriously any attempt by individuals to facilitate or conceal illegal phoenix activity and other related contraventions of the law," the spokesperson says.

"Illegal phoenix activity is unacceptable and together with our SFCT member agencies, we will work to ensure any persons suspected of engaging in such activity, including directors who breach their duties, are held to account."

Photos courtesy of AFP.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

New report reveals 68 per cent of businesses are vulnerable to a cybersecurity attack

Partner Content
36 per cent of employees fear their organisation is at risk of financial losse...
SAI Global

Related Stories

Smartgroup shares plunge as suitor lowers takeover offer

Smartgroup shares plunge as suitor lowers takeover offer

Shares in Smartgroup (ASX: SIQ) have fallen back to where they were...

APA gets look in at AusNet for $9.96 billion takeover offer

APA gets look in at AusNet for $9.96 billion takeover offer

AusNet Services (ASX: AST) has today granted due diligence access t...

Victorian retail to reopen a week earlier, milestone set for scrapping masks and capacity limits

Victorian retail to reopen a week earlier, milestone set for scrapping masks and capacity limits

With Victoria poised to hit its 80 per cent double dose vaccination...

Go1 founders win Brisbane Young Entrepreneur of the Year Award after decade-long wait

Go1 founders win Brisbane Young Entrepreneur of the Year Award after decade-long wait

After their business became a unicorn amidst the ongoing expansion ...