Three Snared In Australia's Offshore Tax Evasion Probe

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

25 July 2006

The Australian tax authorities have announced a major breakthrough in the campaign to thwart offshore tax avoidance schemes, after three company directors were arrested on charges of tax evasion.

Adam and Glenn Hargraves and business partner Daniel Stoten were arrested on the Gold Coast in the state of Queensland last week, and charged with Conspiracy to Defraud the Commonwealth.

It is alleged that between 1999 and 2005 the trio defrauded the Australian government to the tune of $6.6 million by siphoning money deposited in Swiss bank accounts back to Australia through bank debit cards in the names of associates and girlfriends.

The arrests were heralded by Treasurer Peter Costello as a "significant step" in the multi-agency investigation into users and promoters of offshore tax evasion schemes, known as Operation Wickenby.

This $300 million seven-year project encompasses the collective resources of five agencies, including the Australian Tax Office (ATO), the Australian Crime Commission (ACC), the Australian Federal Police (AFP), the Australian Securities and Investments Commission (ASIC) and the Commonwealth Director of Public Prosecutions (CDPP).

“The ACC and its partner agencies have vigorously pursued promoters and participants allegedly involved in concealing substantial taxable income through falsifying documents and transactions. This particular case has involved extensive investigations in Australia, Switzerland, the United Kingdom and China,” Senator Christopher Ellison, Minister for Justice and Customs, explained.

When fully resourced, well over 350 officers from these agencies will be working on Project Wickenby, the majority from the Tax Office.

Costello added that investigations are continuing into a number of similar complex cases, with a view to laying criminal charges and taking proceeds of crime recovery action.

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