Australian Official Cleared Of Fraud By Appeal Court Judge

by Mary Swire, Tax-News.com, Hong Kong

05 March 2003

Former Australian First Assistant Tax Commissioner Nick Petroulias was this week cleared of fraud after the case against him was thrown out of court.

Awarding Petroulias costs, Supreme Court Judge Carolyn Simpson said Monday that there was "no prospect that a jury would convict him".

The 34 day committal hearing heard from over 30 witnesses and 200 witness statements, and Petroulias calculated the case has cost the taxpayer some A$40 million, although Robert Richter QC, his senior council, estimated costs at more like half of this figure.

This has concluded part of a major investigation that began three years ago when Petroulias was accused of profiting from his private rulings. He was alleged to have been selective in some rulings, simultaneously dubbing some tax minimisation schemes 'baddies', whilst making favourable rulings in other cases where he expected to gain from having a share in the company concerned. He is said to have received A$200,000 from these activities.

Petroulias joined the Tax Office back in 1997, and gained a reputation as something of a maverick. The following year he was placed in charge of clamping down on dubious tax evasion schemes, though he resigned in 1999 in the wake of the fraud allegations. He was eventually committed to trial last July on charges of defrauding the commonwealth, corruptly receiving benefit and revealing tax documents.

However, in December Justice Simpson found that the original magistrate had made certain errors of law, and granted Petroulias leave to appeal against the fraud charge.

Though Justice Simpson's judgement stated that the former First Assistant Tax Commissioner had abused his office by handing out favourable and binding tax rulings to a number of taxpayers, she said that the prosecution couldn't prove that the commonwealth "had been deprived of anything of value."

Petroulias still faces charges relating to two lesser offences, and an appeal against Justice Simpson's ruling is being considered by the Commonwealth Director of Public Prosecutions.

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