Court Allows Australian Crime Commission To Investigate High Profile Tax Evaders

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

24 February 2006

The Australian Crime Commission has won a significant legal victory in its ongoing offensive to stamp out alleged offshore tax evasion schemes, after a recent Federal Court ruling allowed it to proceed with an investigation into several high-profile individuals suspected of tax avoidance.

A full panel of Federal Court judges voted 2-1 that the ACC was within its constitutional rights to subpoena seven individuals and question them over breaches of state law, reports in the Australian media stated this week. Lawyers for the accused had argued that legislation only gives the commission power to investigate breaches of federal law.

It is expected that the Federal Court ruling will be appealed to the High Court.

The ACC is taking part in a multi-agency effort to crack down on offshore tax evasion, money laundering and fraud codenamed ‘Operation Wickenby'. Since the middle of last year, the campaign has pooled the collective resources of the Australian Tax Office, the Australian Federal Police, the Australian Securities and Investments Commission and the Commonwealth Director of Public Prosecutions and the ACC, to uncover and punish those promoting and using offshore tax schemes.

Last year, the authorities identified 511 cases of offshore tax avoidance and fraud, many of which had been uncovered using data from Austrac, which monitors money flows entering and leaving Australia, The Australian newspaper reported.

The ACC also raided 85 homes in four states in connection with the investigation, issuing 48 warrants in respect of suspected tax evasion.

Last month, Australian Treasurer Peter Costello announced that the government will be allocating an additional A$305 million (US$225 million) over the next 6 years to fund Operation Wickenby.

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