AFP busts $17m payroll money laundering scheme | #employeefraud | #recruitment | #corporatesecurity

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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 and legitimise their illegally obtained proceeds of crime.”

/Public Release. View in full here.

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