Joint taskforce arrests 12 over alleged crime syndicate fraud

22 July 2020, Written by Business News Australia

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.

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