SA raids as tax office homes in on organised criminals in GST scam

It’s an elaborate scam that’s already reaped these organised criminals $1 billion. And now the ATO and SA Police are cracking down on this GST fraud.

Organised criminals in South Australia are stealing millions of dollars by claiming fraudulent GST refunds, a major investigation into the scam has revealed.

The Sunday Mail can reveal an Australian Taxation Office inquiry and several unrelated SA police operations have discovered organised criminal groups are heavily involved in the illegal activity.

The ATO, which has launched an operation dubbed Protego to investigate the scheme, has confirmed it has raided six properties in Adelaide in connection with the scam, which has cost taxpayers up to $1 billion nationally.

It can also be revealed Operation Protego investigators have referred detailed files on 1,500 individuals in SA involved in the scheme to the Australian Criminal Intelligence Commission for further investigation.

The ACIC and Operation Protego investigators have “completed an in-depth analysis’’ of the individuals and are preparing to take further investigative action.

Sources have told the Sunday Mail they believe many of those involved are using the cash obtained through the scam to directly fund methamphetamine imports into Adelaide themselves, while others are using the cash to fund drug purchases from the other organised crime groups importing the contraband.

Australian Taxation Office investigators conducting raids on six individuals in Adelaide in connection with the Operation Protego GST refund scam. Picture: ATO

Others are simply using the cash – in some instances hundreds of thousands of dollars – to fund their lifestyles and supplement their legitimate business activities.

The fraud involves individuals creating a fake business, applying for an Australian Business Number and then submitting false business activity statements so they can claim GST refunds.

The ATO believes as many as 40,000 individuals Australia-wide have been involved in the illegal activity with up to $1 billion in fraudulent GST refunds made. It has been widely promoted on social media platforms.

Since the ATO launched Operation Protego in April $850 million in fraudulent claims have been stopped.

“This is a clear warning to individuals considering participating – you will not be successful, you are not anonymous, and you will face the consequences of your attempts,’’ ATO Deputy Commissioner and Serious Financial Crime Task Force chief Will Day said.

“For those that have already committed this fraud, we know who you are, and you will need to repay the fake refunds you have obtained. You could face severe consequences, including jail if you do not speak to us before we knock on your door. Come forward now or face potentially tougher penalties.

“Most Australians play by the rules and expect the ATO to take action to protect Australia’s tax and super systems, and collect the revenue necessary to support the Australian community.’’

ATO assistant commissioner Michael Morton last month said the “size, scale and rate of proliferation’’ of the scam was unprecedented.

Australian Taxation Office investigators conducting raids on six individuals in Adelaide in connection with the Operation Protego GST refund scam. Picture: ATO

“Some of the participants involved are actually involved in other more serious crimes,’’ he said on a CPA Australia podcast.

“You often find that tax evasion is the tip of the iceberg. We’ve already commenced criminal investigations into many participants and there is a real potential that these people will get some time in jail or face some serious financial penalties.’’

In SA, investigators had uncovered multiple individuals within the several organised groups of criminals – who are under active investigation for other serious crimes – who had obtained an ABN, either in their own name or using false identification, and then claimed multiple fictitious GST refunds which were then paid into a bank account and withdrawn.

The individuals have falsely claimed up to $100,000 in GST refunds before closing that ABN and repeating the process after sourcing more identification.

Those involved in the scam were often stealing identification from Australia Post boxes, letterboxes and during break-ins on homes.