Australia’s most prominent tax investigator has been suspended after becoming entangled in a fraud investigation involving his son in which AU$165 million (€110 million) was allegedly stolen from the government.
As deputy commissioner of the Australian Tax Office (ATO), Michael Cranston investigated high-profile fraud cases and regularly featured in the media. He has now been issued with a court attendance notice, while his son, Adam Cranston, is out on bail of AU$300,000 after being arrested in the Sydney beachside suburb of Bondi. His daughter Lauren was also arrested and bailed.
Almost 300 federal police (AFP) officers raided 28 properties, arresting nine people and seizing 25 cars, 18 residential properties, two planes, guns, AU$1 million in cash, vintage wine and artworks.
It is alleged Mr Cranston's son asked him to access some information. "We don't believe that at this point that he had any knowledge of the actual conspiracy and the defrauding," said AFP deputy commissioner Leanne Close.
“We are alleging that this is an organised syndicate involved in a significant conspiracy to defraud. The scale of this alleged fraud is unprecedented for the AFP; the response from our members yesterday is a direct response to the level of offending that we have identified during this operation.”
Ms Close said the syndicate appeared to use the money to fund a “lavish lifestyle”.
The alleged scammers ran Plutus Payroll, a company that provided pay administration services for clients, including corporate employers and government departments.
Clients would transfer funds to Plutus Payroll to pay the wages and salaries of employees and pay the tax due to the ATO. But the firm allegedly set up several other companies into which they installed people as straw directors. This, allegedly, was to allow the scammers to disguise their involvement in the conspiracy.
The alleged aim was to ensure Plutus Payroll and the secondary companies retained up to 40 per cent of the money supposed to be paid to the ATO.
Intercepted phone call
In January, the ATO questioned one of the secondary companies about unpaid tax. In an intercepted phone call, Adam Cranston said he was getting his father to “look into it”.
"He is looking into it but considering he doesn't know about it, it can't be like the biggest thing since Ben Hur," he allegedly told a Plutus Payroll colleague.
Federal treasurer Scott Morrison said the arrests, in what is likely to be Australia's largest ever white-collar crime case, are a warning to others. "This is a major government crackdown, and what the events today . . . demonstrate is that if you are a crook and you are seeking to defraud the taxpayer, we will find you," he said. "We will track you down. We will make sure you are brought to justice."
Michael Cranston’s LinkedIn account carries the following insights: “My personal philosophy is that the tax system belongs to all Australians and we all need to work closely together to ensure that it is administered fairly, efficiently and causes the least pain for all that participate.”
