The Australian Federal Police (AFP) has confiscated $15.8 million in assets linked to a founder of Plutus Payroll, the heavily IT industry-focused payroll outsourcing firm at the centre of a multimillion-dollar tax fraud investigation.
According to the AFP the 38-year-old Liverpool man, from whom the assets have been confiscated, was arrested and charged as part of the AFP-led tax fraud investigation in 2017, known as Operation Elbrus.
The man was sentenced last year to seven years and six months in jail for conspiring to defraud the Commonwealth and dealing with the proceeds of crime.
While the AFP has not explicitly named the individual in question, Plutus Payroll founder and former CEO Simon Anquetil was sentenced mid-last year to more than seven years’ jail time for his role as a “principal conspirator” in the syndicate.
Over a period of three years, the syndicate is alleged to have defrauded the federal government of more than $105 million.
Anquetil pleaded guilty to conspiring to defraud the Commonwealth and dealing with the proceeds of crime worth $1 million or more, according to a joint release by the AFP and the Australian Taxation Office (ATO).
The AFP said the Criminal Assets Confiscation Taskforce (CACT) obtained restraining orders in 2017 over an assets pool worth an estimated $15.8 million linked to the Plutus Payroll founder.
This included six properties, three vehicles, multiple bank accounts, investment accounts and shareholdings, as well as several luxury items including watches.
To date, the syndicate is alleged to have defrauded the Australian government of more than $105 million over three years. Original estimates by the AFP suggested the tax fraud value for which the syndicate was allegedly responsible was worth $165 million -- said at the time to be the largest such tax fraud in the country's history.
The confiscated assets can now be sold, the AFP said, with the proceeds placed in the Commonwealth's Confiscated Assets Account.
Funds in this account will then redistributed by the Minister for Home Affairs to support crime prevention, law enforcement and other community initiatives.
The former outsourced payroll management service company at the centre of the investigation left hundreds of IT contractors around the country without wages for weeks after its accounts were frozen by the Australian Taxation Office (ATO) in late April, 2017.
At the time, the AFP said the fraud scheme allegedly involved the payroll company, run by the syndicate members, accepting money from legitimate clients to process payroll on their behalf.
This money was allegedly transferred to seven sub-contracted companies known as Tier 2 companies, which then made payroll payments to individual workers of clients.
The directors of these Tier 2 companies were known as “straw directors”, the AFP said in 2017, when news of the investigation first hit.
“They are essentially a front – individuals recruited to appear to be running the companies, but the syndicate members retain effective control,” it said.
As part of their contractual obligations to the legitimate payroll company’s clients, the Tier 2 companies were required to remit pay as you go (PAYG) withholding tax payments to the ATO on behalf of the clients, the AFP revealed.
However, investigators found that only part of these tax obligations was paid. The remaining money was allegedly siphoned off by the syndicate members and channelled through a complex series of companies and trusts for their own personal gain.