Payments meant for contractors doing work for the federal government, the victim of an alleged tax scam, actually ended going to a company said to be at the centre of Australia’s biggest tax fraud case.
Labor Senator Doug Cameron had started his own investigation into Plutus Payroll, unaware that a massive police operation was underway which would lead to nine arrests, including the son and daughter of a deputy tax commissioner, Michael Cranston, who will also face a charge of abusing of his position as a public official.
Cameron had been contacted by a contractor who said they had not been paid. Plutus was used by many IT workers to ensure their tax and superannuation was paid, to meet Australian Tax Office (ATO) rules, when they worked on projects.
The ATO froze the accounts of Plutus early this month, meaning thousands of people didn’t get paid.
“We actually knew there was a problem but we didn’t know that while we were picking away at this, I think there were about 290 federal police involved and an investigation,” he told the ABC.
Cameron’s investigation found that many government agencies, including the Department of Immigration and Border Security, Social Security and the Defence Department, were paying contractors through Plutus.
“What we found was contractors had been employed by contracting firms, agencies, those agencies then had contracted out to government agencies and the government agencies were paying through this company,” he says.
Money to be paid to contractors was transferred from Plutus to seven sub-contracted companies known as Tier 2 companies, which then made payroll payments to individual workers of clients.
It was at this point that money was allegedly shaved off and ended up in the pockets of syndicate members.
Police say the directors of these Tier 2 companies are what are known as “straw directors”, or people recruited to appear to be running the companies, but who in reality know nothing or little about operations.
Cameron also checked on the directors of a series of companies associated with Plutus.
And the people listed as directors didn’t look like they had any experience as public officers of a company.
“Some of the directors had no qualifications to be directors,” says Cameron.
“They were in homes in areas where you wouldn’t expect directors to be living … young people living in Blacktown, and some of the blocks (their addresses) looking like vacant blocks.”
Senator Cameron says government agencies need to have a look at how they could hand over “hundreds of millions of dollars” of public money without due diligence.
“That money should have gone to the hard-working Australians who had provided services to government,” he says.
“And as far as I can see it, this is predominantly state and federal government agencies who used this company to provide payroll and other services.”
- ‘UNPRECEDENTED’: Police dragnet comes for syndicate suspected of $165 million payroll fraud
- What we know about Plutus Payroll, the company allegedly at the centre of Australia’s biggest tax fraud
- The founder of Plutus has been arrested in the $165 million tax fraud case
- ‘The stain may be far wider within the ATO’: Tax office reeling after shakedown of alleged fraud syndicate
Business Insider Emails & Alerts
Site highlights each day to your inbox.