Inside Australia's biggest ATO fraud scams
From white-collar crime syndicates, to accountants blinded by their own hubris – here are some of the most notable scams the ATO has seen.
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The Australian Taxation Office is frequently targeted by cyber criminals as they seek to benefit from the country’s shared honey pot – sometimes scoring billions in dollars before being stopped.
From white-collar crime syndicates, to accountants blinded by their own hubris – here are some of the most notable scams the ATO has been faced with over recent years.
1. TikTok GST Fraud
Over 150 ATO staff were investigated for their involvement in a sophisticated GST fraud scheme that was especially promoted on TikTok – totalling over $2 billion in scammed funds.
The scam centred around videos detailing how people could claim more money through GST refunds, which spread like wildfire on social media platforms.
The videos – which first appeared from mid 2021 – advised people to obtain an Australian Business Number and then use their MyGov account to apply for GST refunds on fake expenses.
The auditor-general’s report said scammers who followed the video tutorials tried to claim between $38,900 and $2.4 million.
An estimated 57,00 people attempted to claim the false refund – among them 150 supposed ATO staff, though it was later revealed many did not work for the tax office at the time of the scam.
The ATO later revealed action had been taken against 12 people who were substantiated with committing fraud in their roles within the tax office under Operation Protego.
One of the workers, Brisbane woman Paraskevi Vula Danassis, obtained $94,000 in refunds for a pretend cleaning business.
ATO accountant Gaya Ranasinghe of Adelaide was found guilty of three counts of obtaining a financial advantage by deception. She defrauded $16,000.
Hawa Akbar – who falsely claimed nearly $50,000 – was convicted of one count of obtaining a financial advantage by deception.
Baby Dee Zearwie, 25, pleaded guilty to two counts of obtaining a financial advantage by deception in Melbourne’s County Court.
Zearwie was 21 when she used the scam to collect a $17,572 return before allegedly luring four other people into the scheme.
The total losses to taxpayers from false Business Activity (BAS) statements linked to Zearwie was $87,649.60.
It is not suggested that any of the ATO workers used inside knowledge of the system to commit or spread the fraud.
2. NeuMedix Health Group scam
A former Ernest and Young executive Anthony Dickson plotted one of the biggest corporate tax scams by using a valuation model he copied from his former firm, alongside Gold Coast businessman Michael John Issakidis.
The pair received about $68 million through using the health company they were co-directors of, NeuMedix Health Group, to make false depreciation claims in its tax returns.
This was mainly enabled by their control over three other companies, Athena Health Patents Incorporated (Cayman Islands company) and Karkalla Biotechnology Group (fake Samoan company).
NeuMedix bought medical parents from Athena Health at a huge mark-up as the patents were overvalued by Karkalla Biotechnology.
NeuMedix was then able to claim tax depreciation on the acquisition of intellectual property, hence eradicating their tax liability from other sale and leaseback arrangements.
The $68 million they acquired between 2006 and 2009 were splurged on luxury goods such as super cars – including a Rolls Royce, Lamborghini, Aston Martin, Mercedes, and BMW-, prestige watches, yachts, holidays, and even a shopping centre in Queensland.
A multi-year fraud investigation led to Dickson being sentenced to 14 years in jail on appeal, and Issakidis being sentenced to 10 years and three months.
3. Plutus Payroll scam
One of Australia’s biggest scams that started back in early 2014 in a strip club, where five men held a top secret meeting to discuss setting up a payroll company to allow them to siphon off money for themselves.
The five men, one of them Adam Cranston – son of then ATO deputy commissioner Michael Cranston hatched a plan to divert pay-as-you-go withholding tax and GST through a payroll company – which would be named Plutus Payroll.
Between 2014 to 2017, the company was used to take $105.6 million in fraudulent funds from legitimate clients, which was then laundered through other companies.
Lauren Cranston was also involved in the scam – and was sentenced to eight years imprisonment in March 2023.
Adam Cranston and Jay Onley, one of the leading architects of the fraud, were both sentenced to 15 years in prison.
Peter Larcombe, one of the original men involved, died at the bottom of a multistorey car park in Los Angeles, where the coroner ruled his death a suicide.
Mr Larcombe, a fund manager and property investor, was believed to be associated with an outlaw motorcycle group.
The Comanchero OMCG is believed to have entered Adam Cranston and Jay Onley’s Double Bay office, demanding money before punching Onley and threatening his family.
4. Gold Bullion Fraud
Two men frauded about $40 million in a sophisticated gold bullion scam which was defended as a “scientific research” endeavour.
Jonatan Kelu and Cedric Adrian Milner purchased GST free gold bullion, made it into scrap, and sold it inclusive of GST to a refiner.
They then claimed GST input credits by stating they had paid GST when purchasing the original bullion.
Their fraud activity was uncovered by the ATO’s Operation Nosean which especially assessed the gold bullion network and the precious metals industry.
Only $16 million was recovered, and it is unknown where the rest of the frauded funds went as neither men lived a lavish lifestyle, according to Justice Richard Cavanagh.
Both men were sentenced to eight years in jail by the Supreme Court of NSW.
5. Swan’s JobKeeper Scam
Gavin Lawrence Swan, a once-trusted accountant from Green Point on the NSW Central Coast, admitted to defrauding 128 clients of $600,000 over nine years.
Exploiting vulnerable clients who wouldn’t question his actions, Swan orchestrated a scheme to misappropriate personal income tax returns, JobKeeper payments, and GST entitlements. Operating through his Erina practice, Absolute Accounting Services, he redirected funds intended for clients into his personal accounts, maintaining an affluent lifestyle that included a large family home and a $100,000 Mercedes.
Swan’s fraudulent activities were uncovered when the ATO alerted police to suspicious payments.
This led to a raid by the State Crime Command’s Strike Force Windorra, which identified a single IP address linked to all fraudulent transactions.
Despite initially downplaying his offences, Swan eventually admitted to targeting clients who wouldn’t ask questions, gaining an “adrenaline or dopamine hit” from his actions.
In court, Swan expressed remorse, claiming his actions were not reflective of who he is now.
However, the extent of his fraud and lack of initial transparency highlighted the betrayal of trust. Swan was sentenced to 5 years imprisonment and was ordered to repay his victims.
6. ID theft syndicate
A syndicate illegally obtained confidential taxpayer information to create false identities to create ABNs and register fake companies for GST, then lodged business activity to obtain fraudulent GST refunds which were directed to bank accounts created with stolen identities.
Senior partner of the scheme Michael Ray, 38, was convicted in the Melbourne County Court for attaining over $2.5 million from the scheme, and attempting to obtain and defraud the Commonwealth of another $5 million within the period between 12 November 2010 and 14 December 2012.
Ray was sentenced to five years jail after pleading guilty to the scheme revealed by police Operation SPINEL, after a tip-off from a regular taxpayer who found his name on a spreadsheet title ‘wolf2012’ in a Google search.
7. Client scamming tax agent
A former tax agent claimed fraudulent income tax returns on behalf of individuals without their knowledge or consent, and kept the money for himself.
Ismael Mustapha defrauded the ATO of $193,549 and attempted to obtain a further $36,293.
He lodged a total 43 fraudulent income tax returns between 30 January 2018 and 11 April 2018, abusing his position as a registered tax agent.
He was sentenced to three years imprisonment to be served via an Intensive Corrections Order.
8. Paolo Vincente Esmaquel
A transgender woman is accused of stealing nearly $130,000 in taxpayer funds through fraudulent claims, including one for a stillborn child, to finance her gender-affirming treatment and shopping.
She was sentenced to 12 months’ jail on various charges of obtaining money by deception and making counterfeit notes.
The sentence will be added to the prison term she received in November 2024 for fraudulently claiming $7.5m in Medicare benefits and splurging it on luxury fashion items, hotels and cars.
One of the assumed identities was registered by Ms Esmaquel as a tax practitioner with the Tax Practitioners Board (TPB). Following this, she established a tax agent profile on ATO Online Services and linked several taxpayers to her account.
Ms Esmaquel then lodged 10 fraudulent business activity statements on behalf of these taxpayers without their knowledge or consent.
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