Inside Australia’s biggest tax fraud scam
A barrage of secret explosive evidence that led to the uncovering of the biggest tax fraud in Australia’s history has been revealed.
The explosive evidence that unveiled Australia’s biggest tax fraud scam in history has been made public for the very first time.
A string of damning text messages, secretly recorded phone calls and a perfectly placed hidden camera was the golden trifecta that the Australian Federal Police needed to bust a sophisticated $105m tax fraud scam.
The evidence included 28,000 pages of documents and 70 hours of intercepted phone, video and audio material that has now been heard outside court for the very first time, thanks to a Four Corners investigation that aired on Monday night.
What was the Plutus Payroll scam?
The scheme allegedly saw a group of conspirators obtain funds from a legitimate client base that had outsourced their payroll duties to their company, Plutus Payroll.
Their clients ranged from government departments to IT companies, and as part of their role, the company was meant to transfer its clients’ GST and PAYG tax obligations to the Australian Taxation Office.
However, they instead allegedly transferred these funds to a layer of second tier companies they had created, which were run by ‘straw’ or ‘dummy’ directors’ – a term used to describe those who are the visible legal representative of a company, but who act on behalf of the true owners and have no real involvement in the company itself.
These second tier companies then allegedly transferred just a portion of the money to the ATO and sneakily pocketed the rest – reportedly up to 40 per cent – and transferred these funds to the conspirators through a variety of methods, including fake invoices.
However, once the ATO began to notice the huge amount of money missing, the plot began to fall apart.
Who was involved?
According to Four Corners, the scam all started back in early 2014 when five men held a meeting at a strip club in Sydney’s CBD.
Adam Cranston, now 36, was known as a corporate player who was experienced in mopping up broken businesses, and who also had a love of racing cars.
He also had a surprising family connection: his father, Michael Cranston, was at the time a deputy commissioner at the ATO. Michael is not accused of any wrongdoing, or any involvement in these matters.
Also present was Peter Larcombe, a fund manager and property investor at the time, who was at one point believed to be associated with an outlaw motorcycle group.
There was also former professional snowboarder Jason Onley, now 52, who was known around Sydney’s insolvency scene.
At the meeting was also Simon Anquetil and Josh Kitson. Anquetil was known as a savvy tech entrepreneur who had the building blocks for the scheme, while his close friend Kitson was an experienced operator in the recruitment industry.
“It is f**king brilliant!”
It was at this strip club that the five men allegedly excitedly discussed how they can set up a payroll company designed to make them very rich, very quickly.
During the meeting, Adam Cranston allegedly handed out brand new mobile phones in order to prevent authorities from listening in on their plans.
After the group said goodbye to each other, a flurry of text messages between Anquetil and Kitson ensued.
They named their company after the Greek god of wealth, and Plutus Payroll is born.
By the end of 2015, the business was allegedly processing more than $50 million in pay, with the conspirators allegedly having pocketed over $20 million.
Not going to plan
In May 2016, Adam Cranston and Jason Onley were working from one of their offices in Double Bay, one of Sydney’s most affluent suburbs.
A group of men believed to be from the Comanchero motorcycle group were standing outside, with several entering the boardroom and demanding money, before Onley was punched and his family threatened.
The pair allegedly agreed to pay, however this was only the start of their troubles.
Over in Los Angeles, Peter Larcombe sent Adam Cranston an urgent message.
According to Four Corners, it read: “This is getting out of control. You me j need to sort our sh*t out together,” the text read.
“Otherwise we are all f**ked … I’ve heard from different sources the whole business is about to be rolled.”
On the morning of August 19, 2016, he says goodbye to his wife, telling her he was going to get coffee, and left his hotel room near Los Angeles airport.
He never returned.
That night, CCTV captured him walking to a multistorey car park. He was later found dead at the bottom of it.
The LA coroner ruled his death a suicide.
Operation Elbus
Just weeks later in September 2016, the Australian Federal Police established a dedicated task force with up to 20 agents, called Operation Elbrus.
By October 2016, the conspirator’s phones had been tapped and the AFP were listening in on their conversations and glimpses of what the men were up to begin to emerge.
There is also a secret camera installed at the conspirator’s Miranda office in Sydney, right above the desk of Adam Cranston’s sister, Lauren, now 30.
From this birds-eye view, authorities realise that she is complicit in the scheme.
She worked in what they called the “back office” and shifted around a huge amount of funds for the key conspirators.
More listening devices were planted at their different offices around Sydney, and they captured a conversation with the conspirator’s lawyer, Dev Menon.
He allegedly offered them legal advice around how to evade the ATO.
More taped conversations recorded the moment Adam Cranston allegedly admitted the scheme is ripping people off.
“The benefit we do have, is that Plutus is a money making machine,” he says on a phone call to his lawyer, Dev Menon.
“And it generates a f**k load, so it’s a Ponzi, but the ATO won’t know it’s a Ponzi. Not until well down the track.”
Unravelling
In more recordings aired by the ABC, Dev Menon meets with siblings Adam and Lauren Cranston to discuss a plan.
They would blame everything on the now-deceased Peter Larcombe.
“There’s no forensic accountant in the world, without even, without even, how the f**k are you going to piece this together, like it’s impossible. Like mate, they will never figure it out,” Menon said in a recording picked up by a planted device.
“Basically what we’re saying is Peter ran the whole thing. Okay. You guys had no idea what was happening if it ever comes to it.
“I just want you guys to start thinking with the stories. If obviously, Adam, this goes for you too, Loz, Adam, Jason Onley, this protects everyone, right. Me, Every single person.”
“It was all Peter,” Lauren agrees.
“Yeah it was all Peter,” Menon echoes.
“I just came to work and he told me to do this. I don’t know what the business is.”
In April 2017, the moment they all feared descended upon them: Plutus Payroll’s accounts were issued with a garnishee notice.
A garnishee notice entitles the ATO to collect an outstanding tax debt by directly removing money from an insolvent company’s bank account, or by directly collecting moneys from a company’s debtors.
On April 28 2017, Adam calls his father, Michael Cranston, a deputy commissioner of the ATO, for help.
He tells his father, who is not accused of any wrongdoing, a very selective version of events and explains that Plutus is unable to pay its clients.
Adam explains what happened with the garnishee notice, and how he is concerned that they cannot reach anyone from the tax office to talk about it.
A few days later, there is another call and Michael says he thinks his son might be on an ATO watchlist.
Justice
Finally, on May 17, 2017, police decide they have gathered enough evidence against the syndicate.
They arrest the key conspirators and raid their homes, seizing $15 million in cash, 25 vehicles, 12 motorbikes, 18 residential properties, more than 100 bank accounts and share trading accounts, two aircraft, firearms, jewellery, art and vintage wine.
There’s also at least $1 million sitting in a safe-deposit box, the AFP says.
Sixteen people are charged as part of the operation.
The accused conspirators – Adam Cranston, Dev Menon, Jason Onley and Simon Anquetil and Lauren Cranston – are charged with conspiring to dishonestly cause a loss to the Australian government and dealing with the proceeds of crime.
Michael Cranston was also charged with two counts of abuse in public office to gain an advantage, in this case, to benefit his son, but in February 2019, was found not guilty of both charges.
Adam Cranston, his sister Lauren, Dev Menon and Jason Onley faced a huge year-long trial in 2022 and were found guilty in 2023.
More Coverage
Lauren Cranston is sentenced to eight years imprisonment in March 2023.
Justice Anthony Payne said she had only gained $181,000 for her role in the scheme and acted out of a “misguided sense of loyalty to her brother”.
Justice Payne is due to sentence Adam Cranston, Dev Menon and Jason Onley in coming weeks.
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