A former Australian Tax Office deputy commissioner deliberately misled at least one of his staff when trying to arrange a meeting between a scandalised payroll company and those who had frozen its bank accounts, a jury has heard.
Michael Bede Cranston is on trial in the NSW District Court, accused of acting on the wishes of his son, Adam Michael Cranston, when he contacted a subordinate to arrange an urgent meeting between ATO investigators and Plutus Payroll.
Michael Cranston arrives at the Downing Centre court in Sydney on Wednesday. Credit: AAP
The trial, before Judge Robyn Tupman, heard Adam Cranston was a director of Synep, a shareholding company connected to Plutus Payroll, at the time of the request.
Crown Prosecutor Peter Neil SC said during his opening address that Mr Cranston had a conflict of interest in following up two requests from Adam, with whom he had a “close and affectionate relationship”, over a matter of months.
“The accused, Mr Cranston, had been with the ATO for a period of decades, he was highly experienced … at investigating major tax abusers,” Mr Neil said.
Mr Cranston is charged with obtaining information in his capacity at the ATO with the intention of dishonestly obtaining a benefit for his son; and with exercising his influence in his capacity as a deputy commissioner of taxation with the intention of dishonestly obtaining a benefit.
He has pleaded not guilty to both charges.
Adam Cranston allegedly asked his father for assistance.Credit: Daniel Munoz
It’s alleged Adam Cranston asked his father to look into the nature of any audits the ATO was conducting against Simon Anquetil, a man financially linked to Plutus Payroll with whom Adam had a business relationship.
The jury heard Michael Cranston asked assistant commissioner Scott Burrows to access restricted computer records about Mr Anquetil and report back to him.
“The material was protected,” it’s alleged Mr Cranston later told Adam in a phone conversation.
Mr Neil said Mr Cranston should have reported his son’s request to senior officials at the ATO.
“He should’ve recused himself from that request immediately … he should’ve said, ‘sorry, there’s nothing I can do’,” Mr Neil said.
The court heard that in late April 2017 the ATO issued a large tax assessment against Plutus Payroll and obtained orders freezing the Commonwealth Bank accounts of the company.
Mr Neil said Adam Cranston called his father, complaining 2000 subcontractors couldn’t be paid, and asking for help to arrange a meeting with people in the ATO involved in obtaining the orders.
“He asked for assistance from his father in respect of Plutus Payroll in circumstances where Adam Cranston, in the knowledge of his father, had a genuine commercial interest in getting things sorted out,” Mr Neil said.
“He should’ve declined the request, he should’ve done nothing.”
Mr Neil said the Crown would be arguing that Michael Cranston contacted his subordinate, assistant commissioner Tony Poulakis, over the request, but misled him in regards to its nature.
The jury heard Mr Poulakis emailed a senior ATO auditor working on the Plutus Payroll matter and copied-in Mr Cranston.
Giving evidence, the auditor said she didn't respond, instead discussing her concerns with her directors.
Mr Cranston’s defence barrister, David Staehli, said his client was acting within the broad scope of his duties when making inquiries on both occasions.
Mr Staehli said part of his client's role at the ATO was dealing with disputes, which was occurring with Mr Anquetil in relation to large sums of money, and that Mr Cranston's name and title were part of correspondence sent from the ATO in relation to both Mr Anquetil and Plutus Payroll.
Mr Staehli said his client disputed misleading either Mr Poulakis or Mr Burrows in his communications with them.
He said that Mr Cranston told Mr Poulakis the Plutus Payroll matter was urgent because "people are going to the bloody press" over the accounts being frozen.
Mr Staehli said part of Mr Cranston's responsibilities were to "make sure that the Tax Office didn't get this kind of publicity when it ... was seen to have abused its powers."