Project Wickenby Claims More Scalps

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

12 February 2009

The Australian Federal Police (AFP) has revealed that twelve people are to face prosecution as a result of an investigation into a AUD10m offshore tax evasion and money laundering scheme.

A total of 153 charges have been laid against a Sydney accountant, her husband and ten of her clients.

AFP National Manager Economic and Special Operations, Mandy Newton, said the charges showed the AFP is serious about tackling money laundering linked to organised criminal activity, stating:

“Financial services providers and members of the public alike are warned that defrauding the Commonwealth is a crime and evading tax can result in criminal charges.”

The police investigation began in December 2006, after a referral from the Australian Taxation Office (ATO).

From May to December 2007, a number of search warrants were executed on various business and residential premises in the Sydney area.

On April 28, 2008, the Vanuatu Police Force (VPF) executed a number of search warrants on associated business premises in Port Vila. Various documents were seized at each of these warrant locations. Overseas documentation arrived in Australia in November 2008.

According to the AFP, it will be alleged in court that a 62-year-old woman devised, promoted, facilitated and implemented tax evasion schemes on behalf of Australian-based clients.

The schemes allegedly implemented by the woman involved the incorporation of companies in Vanuatu, which were paid fees by Australian-based companies.

The AFP will contend that no actual services were provided by the offshore companies. The Australian-based companies then claimed these false expenses as deductions in tax returns.

It will also be alleged that the funds held offshore were then laundered to individuals in Australia, but were not disclosed as income in tax returns.

The total amount allegedly laundered by these 12 people is approximately AUD5.2m.

This investigation is one of ten major AFP investigations being conducted as part of Project Wickenby, Australia’s largest ever operation attacking tax avoidance and evasion linked to tax havens.

Project Wickenby is a whole-of-government taskforce set up in 2006 to investigate tax avoidance, tax evasion and large-scale money laundering.

The laying of these charges brings the total number of persons charged to date by the AFP under Project Wickenby to 33.

The five key Project Wickenby agencies are the ATO, Australian Crime Commission, AFP, the Australian Securities & Investments Commission and the Commonwealth Director of Public Prosecutions.

To date, Project Wickenby has raised AUD282m in liabilities, collected more than AUD90m and restrained over AUD75m from the proceeds of criminal activity.

The 62-year-old woman has been charged with:

• six counts of conspiring to defraud the Commonwealth, contrary to section 29D of the Crimes Act 1914 by virtue of section 86(2) of the Crimes Act 1914;
• 23 counts of conspiring to obtain a financial advantage by deception, contrary to section 134.2(1) of the Criminal Code Act 1995 by virtue of section 11.5(1) of the Criminal Code Act 1995; and
• five counts of conspiring to deal in money and intending that the money would become an instrument of crime, contrary to section 400 of the Criminal Code Act 1995 by virtue of Section 11.5(1) Criminal Code Act 1995.

These offences carry maximum penalties of 10 years and 20 years imprisonment.

The other 11 persons have been charged with a variety of money laundering offences, obtaining a financial advantage by deception and defrauding the Commonwealth.

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