ATO tsar Michael Cranston accused of abusing office, as his children investigated
THE investigation into an alleged $165M rort that has ensnared a major tax boss and two of his kids has also roped in other high-ranking government officials.
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THE massive investigation into an alleged $165 million rort that has ensnared a major tax boss and two of his kids has also roped in other high-ranking government officials.
Australian Taxation Office assistant commissioners Tony Poulakis and Scott Burrows were yesterday stood down without pay as the Australian Federal Police announced nine people had been charged over the lucrative scheme.
It is understood that the pair — along with ATO deputy commissioner Michael Cranston — tried to access confidential information as the noose tightened on the players allegedly involved in a tax evasion fraud so big it would be one of the worst white-collar crimes in Australia’s history.
It will be alleged Mr Cranston’s son Adam, believed to be the mastermind of the deception as co-chair of financial services firm SYNEP, asked his father for help when he feared he was being audited.
Search warrants show Australian Federal Police investigators were looking at whether Poulakis and Burrows gained “unauthorised access to taxation records”.
If proven, the offence carries a two-year jail term. They have been stood down, but no charges have been laid.
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Michael Cranston will appear in court charged with abusing public office “with the intention of dishonestly gaining a benefit for” his son.
“We’re alleging that he has publicly abused his position as a public officer and senior official of the Commonwealth,” AFP Deputy Commissioner Leanne Close said.
“It appears that his son has asked him to access some information potentially, we don’t believe at this point that he had any knowledge of the actual conspiracy.”
Other high-profile names were also dragged into the saga yesterday, with veteran TV journalist Stephen Barrett reportedly involved in a blackmail attempt.
And Sevag Chalabian, former solicitor for corrupt politician Eddie Obeid, was also named in court documents on a list of individuals the accused are not allowed to speak to. Neither Barrett nor Chalabian has been charged.
Adam Cranston appeared in Central Local Court yesterday via videolink from Surry Hills police station. He won bail thanks to $300,000 worth of surety guarantees from his grandmother Kathleen and wife Elizabeth. His next appearance will be in August.
His 24-year-old sister Lauren Cranston was also charged with conspiracy to defraud the ATO.
One of her bail conditions was refraining from contact with her brother.
Fellow alleged conspirator Jason Onley was bailed for a $75,000 forfeiture guarantee.
Also charged with conspiracy was 27-year-old Daniel Rostankovski, of Waterloo, who was bailed for $100,000 forfeiture with an added charge of blackmail.
Forty-six-year-old Daniel Hausman also faced blackmail charges.
Christopher Guillan was charged with dealing with the proceeds of crime to the value of $100,000.
And in Wollongong, alleged conspirator Devyn Hammond, 24, was also bailed.
AFP deputy commissioner Leanne Close yesterday revealed the extraordinary loot the sophisticated syndicate had bought with the allegedly stolen money.
It includes 18 residential properties, 25 motor vehicles, luxury, vintage and racing vehicles, 12 motorbikes, more than 100 bank accounts and share trading accounts, two aircraft, firearms, jewellery, artwork, vintage wines and at least $1 million located in a safety deposit box.
Investigators allege Sydney financial services firm SYNEP, of which Adam Cranston is co-chairman and managing director, was part of the operation.
Payroll contractor Plutus Payroll, controlled by SYNEP, was the centrepiece of the alleged hustle.
Police will claim it would allegedly funnel wage payments through a series of “second tier” companies, which then paid the ATO only a fraction of the required income tax. The remaining withheld tax would then allegedly flow into the pockets of syndicate operators.
The alleged scammers believed they had struck a sweet spot where each individual transaction was too small to prompt action from the ATO.
Plutus Payroll hit the headlines earlier this month when the ATO froze its bank accounts over unpaid tax debts, meaning its clients’ staff could not be paid.
In a statement earlier this month, Plutus apologised to its customers for “continuing distress caused by our inability to process your pay since 27 April”.
“Our dispute is with the Australian Taxation Office who believe that Plutus owes the ATO money,” the statement said.
On May 10, the company announced that the ATO had allowed the release of the money.
Prime Minister Malcolm Turnbull yesterday said that the alleged misconduct within the ATO was “ very much to be regretted”.
“Nobody should imagine they can escape our law enforcement agencies, no matter how high they may be in a government department,” he said.
“No matter how high they may be, they are being watched.
“We have zero tolerance for this type of conspiracy, this type of fraud, this type of abuse of public office.
“We have a relentless pursuit of corruption, malpractice, abuse of office, the AFP have a very keen focus on it ... as has been demonstrated.”
ATO CHIEF LOVED TO TAKE ON BIG FISH
Jennifer Sexton
MICHAEL Bede Cranston is an esteemed 35-year veteran of tax investigations whose specialty is pursuing rich people like celebrity Paul Hogan.
That Hogan escaped any conviction — and in fact successfully settled a civil action against the tax office — is a rare blight on the now-embattled deputy commissioner.
The shock of Cranston yesterday being charged with allegedly engaging in abuse of public office and gaining unauthorised access to tax records has rocked the Australian Taxation Office.
“Extremely hardworking”, a key lieutenant to Commissioner Chris Jordan and a “good operator” were the descriptions offered yesterday by colleagues of the 57-year-old.
Yet, as the tax office dealt with the fallout of one of its finest facing criminal charges, Mr Cranston’s name was swiftly removed from its website and a replacement found in his role as head of private groups and high net worth individuals.
In this role he pursued the very crimes his son Adam Cranston and daughter Lauren Cranston are now accused of.
By far the most high profile and longest-serving brief on his watch was Project Wickenby, the nation’s biggest and, at $430 million, most expensive tax investigation.
Hogan was among those initially named and shamed but in 2012 he and creative partner John Cornell were cleared and settled a civil action against the tax office.
Wickenby involved false invoices, sham loans, fake asset transfers, hidden share trading, sham labour hire, Swiss bank accounts and a Jersey Island accounting firm. Mr Cranston’s Linkedin profile boasts it resulted in 46 successful convictions and raised $2.36 billion in tax revenue.
He said Wickenby had a lot of indirect benefits, such as the understanding by the public that tax evasion is criminal: “One of the messages that has got out is that when people get involved in this type of behaviour, they are participating in tax fraud, and when it’s fraud, it becomes criminal.”
Originally published as ATO tsar Michael Cranston accused of abusing office, as his children investigated
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