Sydney entrepreneur arrested in Australia's largest tax fraud investigation

The Australian Federal Police (AFP) has arrested and charged a 52-year-old Sydney businessman over an alleged multi-million-dollar off-shore tax evasion scheme.

Federal agents arrested the man yesterday and executed search warrants at Neutral Bay and in the Sydney central business district. The operation also involved officers from the Australian Tax Office (ATO).

The man will appear at Central Local Court today where it will be alleged he has been involved in tax avoidance through an intricate network of local and offshore companies.

It is alleged that these companies were used to earn income paid offshore and to conceal it from the ATO. The proceeds of this alleged criminal activity were then moved through a series of offshore and Australian company structures before being returned to Australia.

The AFP investigation began after a referral from the Australian Crime Commission (ACC), which is investigating offshore tax evasion schemes.

It is one of several investigations being conducted as part of Project Wickenby, Australia’s largest tax fraud investigation.

Project Wickenby is a whole-of-government taskforce set up in 2006 to investigate tax avoidance, tax evasion and large-scale money laundering.

AFP National Manager Economic and Special Operations Paul Jevtovic said yesterday’s arrest shows that Australian authorities are serious about tackling major tax avoidance, tax evasion and money laundering.

“The investigative, legal, prosecutorial and administrative powers of seven key government agencies are being utilised and we are being assisted in our work by foreign governments and international agencies,” Assistant Commissioner Jevtovic said.

“This arrest should send a strong message that Australia is an unattractive location for international tax evasion and that the Australian Government is serious about protecting the integrity of the tax system by ensuring all taxpayers contribute their fair share,” he said.

Assistant Commissioner Jevtovic said the AFP is currently conducting nine major Project Wickenby investigations and intelligence operations within Australia and overseas.

“To date the AFP has executed 146 search warrants and issued 78 notices under proceeds of crime legislation," he said.

The five key Project Wickenby agencies, the ATO, ACC, AFP, the Australian Securities and Investments Commission (ASIC) and the Commonwealth Director of Public Prosecutions continue to work co-operatively and are closely supported by AUSTRAC and the Australian Government Solicitor.

The man has been charged with obtaining a financial advantage by deception, contrary to section 134.2 of the Criminal Code Act 1995 and dealing with the proceeds of crime valued at more than AUD$1 million contrary to section 400.3(1) of the Criminal Code Act 1995.

The offences carry maximum penalties of 10 years and 25 years imprisonment respectively.