ATO scam: Tax boss Michael Cranston’s alleged phonecall to fraud accused son

EXCLUSIVE: Deputy ATO boss Michael Cranston told his son Adam “what you did in the past you got away with”, according to excerpts from phone taps allegedly recorded by police.

Adam Cranston pictured walking in Bondi yesterday. Picture: Toby Zerna

• AFP HAD ATO BOSS CRANSTON IN THEIR SIGHTS
• IT’S A MONEY TRAIL THAT SIMPLY DEFIES BELIEF

DEPUTY Australian taxation boss Michael Cranston told his son Adam “what you did in the past you got away with”, according to excerpts from phone taps allegedly ­recorded by federal police.

And alleged conspirator Jason Onley allegedly said, “No, no, we’re going to jail” as tensions soared among those accused of being involved in the alleged $165 million rort of the taxation office.

Adam Cranston, 30, has been charged with defrauding the Commonwealth over the scheme he allegedly cooked up with six co-conspirators, including his younger sister Lauren Cranston.

ATO deputy commissioner Michael Cranston allegedly told his son “it stinks of you’re in a phoenix operation”.

Adam Cranston, pictured walking in Bondi while on bail yesterday, is alleged to have been a major player in a $165 million payroll tax scam. Picture: Toby Zerna

Documents tendered in court allege his father spoke to his son about conduct “in the past” in a May 2 phone call. “What you’ve got to remember, Adam, what you did in the past you got away with, right?,” Cranston Sr allegedly said. “You get away with it when nobody knows about it, right? You think you get away with it, but you don’t.”

The phone call did not ­detail the past activity Cranston Sr was referring to.

During the call, Cranston Sr allegedly said his son’s conduct “stinks” of phoenixing — the practice of deliberately closing companies to avoid tax. Cranston Sr, 58, led the Australian Taxation Office’s Phoenix Taskforce before he was stood down last week.

“It stinks of you’re in a phoenix operation,” he allegedly told his son.

The statement of police facts also claimed Cranston Sr “said he thought ‘you’re’ on the list of the ATO’s top 50 phoenix groups” and “he could mount a civil case to say that he (Cranston Jr) is ­involved in common phoenixing activity”.

Cranston Jr allegedly told his father that Plutus Payroll, the company Cranston Jr shared control of and which is allegedly at the centre of the scandal, had been assessed by the ATO for $23 million in unpaid PAYG from February.

Elizabeth Cranston on his wedding day. Picture: Facebook

An earlier call, police claim, included Cranston Sr telling his son they needed to think of a strategy.

Cranston Sr will face court on June 13 on a charge of abusing his position as a public­ official. He is not ­accused of being involved in the alleged conspiracy.

ATO fraud: Key players

ATO fraud: Key players

ATO fraud: Key players

ATO fraud: Key players

The court documents also claim members of the alleged syndicate dissolved in panic in February, with one ­declaring to another: “We’re going to jail.”

As alleged conspirators Daniel Rostankovski and Daniel Hausman allegedly tried to use veteran TV producer Steve Barrett to extort $5 million from the syndicate, another member of the group, former sports commentator Jason Onley, said: “Plutus is cooked.” Barrett has not been charged with any offences.

WHITE COLLAR FRAUD CASE IS GETTING MURKIER

“How we gonna shut it all down?” Onley said, according to the police facts.

“We were f ... ed. We’re ­already f ... ed. So nothing’s improved my situation in terms of being f ... ed. It’s whether I iust ... take the $5 million ... and do my three months in jail. OK. Or pay, try to have this work where I don’t have to go to jail.”

Rostankovski told Onley: “I know I’m not going to jail” to which Onley ­replied: “No, no, we’re going to jail.”

Adam Cranston is arrested at his Bondi home. Picture: Police Media

HOW THE ALLEGED SCAM WORKED:

■ Plutus Payroll Australia provided a payroll administration service for a large number of corporate companies.

■ The companies made regular payments to Plutus on the understanding those funds would be used to pay the wages and superannuation of employees and also to pay the ATO their required pay-as-you-go tax.

■ The syndicate allegedly recruited “straw directors” to act as directors of a series of “second tier” or “straw” companies.

■ Plutus allegedly transferred the payroll funds and a percentage of the PAYG tax to the second-tier companies.

■ However not all of the PAYG commitments were paid to the ATO.

■ Instead, police allege remaining funds were transferred to the syndicate members through false invoices and the bank accounts of front companies.

■ The straw companies would keep logs on the differences between what the ATO was paid and what the syndicate took.

■ The scheme allegedly raked in $165 million