Inside the biggest tax fraud scheme in Australian history

Adam Cranston’s tax fraud scheme was well thought out and, despite thinking it was impenetrable, it was ultimately a suicide mission.

The scam was huge and presented as a cross between a stylish heist movie and a suicide mission.

The court heard it was led by a group of three highly intelligent, greedy and unapologetic men -- some aged in their 20s and 30s -- who figured out how to game the system and made off with $105 million in just four years.

The only problem is they stole so much money that the authorities were always going to come looking for it.

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And their structure was not complex enough that it would not take long for the police to map out the structure and follow the money trail.

Lawyer Dev Menon incorrectly thought otherwise.

Adam Cranson was at the apex of scheme that ripped off the Australian Taxation Office to the tune of $105m. Picture: AAP Image/Craig Golding

A recording police secretly made in February 2017 was played at the trial were Menon said: There’s no forensic accountant in the world … I can’t even f--ken piece this together.”

At the apex of the organisation was Adam Cranston, the son of then senior tax official and fraud investigator Michael Cranston. Now 36-years-old, Adam was in his late 20s when police believe the scheme was devised.

The trial was told by Crown Prosecutor Paul McGuire SC that Adam established the legitimate company known as Plutus Payroll, which was purchased by one of his other companies in 2016.

Plutus’ clients included companies ranging from government departments to IT companies.

Collectively, they transferred more than $1 billion to Plutus.

The company had no trouble attracting a long list of clients given that it offered its payroll services for free.

Plutus was then meant to transfer its clients’ GST and PAYG tax obligations to the ATO.

But instead of doing this, Cranston’s group created a layer of second tier companies and transferred the funds there.

The companies were run by straw directors – whose ranks included junkies and disgraced businessmen – to disguise the involvement of Cranston and others.

The second tier companies then only transferred a portion of the money to the ATO – holding back as much as 40 per cent of the money.

Adam Cranston being arrested in 2017. Picture: Supplied

Those stolen funds were then transferred to Cranston and others using a variety of methods, including other shelf companies, fake invoices or the bank accounts of other companies.

When the ATO noticed the huge amount of money missing, they began to issue garnishee notices to the second tier companies.

The Australian Federal Police were soon involved and launched Operation Elbrus in September 2016.

Seized items after nine people were arrested in 2017 in relation to the fraud. Picture: AAP Image/Paul Miller

Police dismantled the operation on May 17, 2017, when they made a series of co-ordinated arrests – the substance of which dominated the headlines for weeks.

The knock out blow in the case came in early 2017.

Investigating police broke into Menon’s law firm office in Sydney’s MLC Centre high rise and installed secret listening devices in the office’s meeting rooms.

Between January and March the recording devices captured members of Cranston’s crew talking about the inner workings of the operation and how they were going to cover it up.

Transcript of the Crown’s closing address released by the NSW Supreme Court on Friday revealed how valuable the evidence was to its case with Crown Prosecutor Paul McGuire repeatedly reminding the jury of their damning contents.