The Swindle: How Adam Cranston tried to trick his tax official dad into revealing if he knew about illegal scheme

Adam Cranston just couldn’t come out and ask his dad Michael, a senior tax office official, if he was under investigation. So he workshopped a strategy with his accomplices.

With the net closing around the biggest tax fraud in Australia’s history, the man at the centre of the $105 million ripoff had a bold plan that was also an astonishing breach of trust.

“I’m going to have to visit my old man,” Adam Cranston said to his accomplices, lawyer Dev Menon and ex pro-snowboarder Jay Onley in a conversation that was secretly recorded on January 27. 2017, and played in Cranston’s trial.

LISTEN TO THE AUDIO

The trial ended this week when a jury found Adam, Menon and Onley guilty of their respective roles in stealing $105 million that was meant to go to the ATO.

“You and I want to see him today?,” Cranston asked Menon in the recording. “Go to the belly of the beast?”

It was a reference to Adam’s father, Michael Bede Cranston, who at that time was the Deputy Commissioner of the Australian Taxation Office. The father who left the court in tears distressed after Adam was convicted.

Adam Cranston wanted to mine his father for information who was a senior figure at the Australian Taxation Office.

Michael Cranston had a decorated career at the Australian Taxation Office where he was deputy commissioner.

At the time of Adam’s crime, his father was in charge of the ATO’s investigations into exactly the type of large scale tax fraud that his son had been committing.

Cranston Senior’s expertise was now particularly valuable to Adam because the ATO had issued legal notices to a number of companies he secretly controlled to recover millions in outstanding tax payments.

Adam’s tax fraud syndicate had also received a letter from an ATO investigative department that he knew very well.

“My old man’s the DC (deputy commissioner) of that up until two years ago. He reinvented that department,” Adam told Menon and others inside a meeting room of the latter law firm’s office in a Sydney CBD high rise.

Adam Cranston could be facing 25 years in jail for. Picture: AAP Image/Craig Golding

Multiple company accounts were now frozen and Adam needed to know if the jig was up on his tax fraud scheme.

But he had to tread carefully.

His father was a decorated tax official with an unblemished record who had climbed the ladder to become the person who oversaw and signed off on the ATO’s biggest tax theft investigations.

Instead of considering the consequences that would follow for his father, Adam was recorded as being only focused on the benefit he could extract from his father’s lofty position.

But he couldn’t come straight out and ask his father if there was an ATO investigation into his tax rorts.

That would reveal too much.

Michael Cranston as ATO Deputy Commissioner appearing alongside, Assistant Treasurer, Kelly ÕDwyer with Minister for Justice, Michael Keenan, during a press conference in Parliament House in Canberra.

Instead, Adam would have to feed his father some lies, ask him some carefully targeted questions and then read his reaction to ascertain whether he was in the ATO’s crosshairs.

First, Adam suggested to Menon that he could play dumb and tell his father he had bought a business and had discovered it had some pre-existing tax problems.

“ … I can go down and say ‘Mate, I need, this is one of my clients and we purchased the business off em, so we don’t know what’s going on here’. You know what I mean?,” Cranston said.

“He’ll go ‘What the f--k are you doing with them?’,” Cranston said. “But if he goes ‘Oh, is he your client? Oh (indistinct) investigation …’ and we’ll know by him just saying that to me going ‘F--k’.

Second, Adam figured he could exploit his dad’s expertise to fight the ATO claim.

“ …’Cause mate, he can tell us how to counter and shit, hey,” Adam said. “ … If we know their intel, and what they’re doing and what they’re plans are, we can counter that shit.”

Menon was enthusiastic but not sure if Adam was being overly ambitious.

“100 per cent mate. F--king oath,” Menon said. But will your dad tell ya? …”

Michael Cranston had a deep love for his son, and Adam knew it.

“Mate, if I push him and say ‘Mate, my head’s on a noose here mate’. If it’ll come back to me, he will 100 per cent … I think…,” Adam said. “ … And if he doesn’t know about it … He doesn’t know about it.

Adam explained later in the recorded meeting that his father is a “straighty one-eighty”.

Onley quipped: “Not like his son.”

Adam then suggested asking his father if he had heard of his company, Plutus Payroll, the company that was the main vehicle for the tax theft.

“If he goes ‘Nup, why?’ I’ll say we got a garnishee order and if he goes ‘Nah mate, sorry. Hasn’t come past my desk, I’ll be OK…,” Cranston said.

If his father did know about the investigation, he would be unlikely to say anything. But dam knew what his father would say if the answer was yes.

Adam Cranston, behind the wheel of a Ferrari, was a car fanatic.

“He’ll go ‘Well I can’t talk about that’,” Adam said.

The worst result was if Michael knew about his son’s operation.

“ …(If) it’s gone past his desk, then he knows it and he remembers it, well, he only knows the big ones,” Adam said.

Adam also worried that he could have been easily connected to the tax fraud and that his father may have been kept away from the investigation to prevent a conflict of interest.

“ … He knows Jay and I well. Obviously … So, if they come to him, like one of his staff go Boom, boom, boom,” Cranston said. “They go ‘Mate, your son’.”

But if that had happened, Adam knew his father would not have been able to keep it from him.

“They would have pulled my old man off that and said ‘Your son’s involved in this. You’ve gotta take a back seat’ … and he would have come to me,” Adam said.

Adam insisted that his father would have told him “straight a-f--king-way.”

“He would have gone ‘Mate, we need to have a chat.’,” Adam said.

“He’ go ‘Mate, what the f--k (are) you into? … There’s no way he would have just let this slide underneath him,” Cranston said.

Some of the seized money after the arrests of nine people including Adam Cranston on tax fraud charges in 2017. Picture: AAP Image/Paul Miller

“Mate, I’ve got a good relationship with my old man,” he continued. “We see each other all the time. I saw him the other night. He was fine the other night.

“If he was a bit weird with me …“If there was a big thing going down he would have come to me and gone ‘My names’ on this…,” he said.

He resolved to talk to his father sooner rather than later.

“I might just go see him this afternoon,” Adam said. “Just rock up. Just say ‘I’m picking up’ and just say ‘Oh mate…’.

“So if anyone’s gonna know about it, it’s him,” Adam said.

Adam knew he was in trouble, but joked about it anyway.

“ … If I call you tomorrow and I’m in another country … I’m in Thailand fellas. ‘What are you guys doing? You’re mad to stay in Australia’,” Adam said.

Three days later, Adam returned to another meeting – which was also secretly recorded by police and played during the trial – with news of what his dad said.

Adam recounted how he showed his father the documents from the ATO and lied that the business was owned by his friend who needed help.

“I go ‘So, mate, I got a client that’s been smashed’,” Adam said. He said ‘What do you mean?’.”

Adam Cranston was involved in the biggest tax avoidance scheme ever in Australian history. Picture: AAP Image/Peter Rae

“So he has a look through it, reads it and he goes ‘Two things. This client’s linked to organised crime?

“I said ‘No’,” Adam said.

According to Adam, his father asked: “Has he ever made transactions, ever been seen with or done with organised crime?..Has he ever had anything to do with (illegal tax) phoenixing?”

Adam responded: “Not that I’m aware …”

Adam was recorded saying he was convinced their operation had not been uncovered.

“ … Considering he doesn’t know about it, it can’t be the biggest thing since Ben Hur,” Adam said. “If this was fully uncovered and they knew exactly what was going on, he would be (aware).”

Menon concurred: “ … There is no question this would be the biggest tax fraud.”

They were wrong.

The authorities were all over them when police arrested them in a series of co-ordinated raids in May 2017.