Balgownie woman charged after police smash alleged $165m tax fraud syndicate

A 24-year-old Balgownie woman is among nine people charged by Australian Federal Police for her involvement in an alleged $165 million tax fraud syndicate.

Devyn Hammond was charged with conspiracy to defraud and appeared in Wollongong Local Court on Thursday.

The Australian Taxation Office's Deputy Commissioner Michael Cranston is among those to be charged in connection with the alleged syndicate, which also allegedly involved his son.

Police have described the operation as one of the biggest white collar fraud investigations in Australian history.

Mr Cranston has been issued a future court attendance notice for the charge of abusing his position as a public official.  He is due to appear in Central Local Court on June 13. 

His son, Adam Cranston, 30, and his daughter have also been charged following the eight-month Australian Federal Police investigation, codenamed Operation Elbrus.

It's alleged Michael Cranston accessed restricted information on an ATO audit for his son, but police do not believe he knew about his son's alleged fraud syndicate.

AFP Deputy Commissioner Leanne Close said the syndicate appeared to use the money to fund a "lavish lifestyle".

Among the items seized under proceeds of crime were 25 motor vehicles, including luxury cars and racing cars, 12 motorbikes, 18 residential properties, two aeroplanes, $1 million from a safe deposit box, firearms, jewellery, bottles of Grange wine and artworks.

ATO Second Commissioner Andrew Mills said two other ATO officers also were being investigated internally for potential code of conduct breaches. It's believed they tried to look up information on the ATO's audit at the behest of Michael Cranston.

The announcement came after scores of police officers on Wednesday carried out raids across Sydney and the Illawarra, arresting nine people.

Of those people, two were charged with dealing with property reasonably suspected of being the proceeds of crime, while three were charged with one count of demanding with menaces intending to obtain a gain or cause a loss.

How the scheme worked

Australian Federal Police said the legitimate payroll company – run by the syndicate members – accepted money from legitimate clients to process payroll on their behalf.

This money was transferred to seven sub-contracted companies known as Tier 2 companies, which then made payroll payments to individual workers of clients.

The directors of these Tier 2 companies are known as straw directors. They are essentially a front – individuals recruited to appear to be running the companies, but the syndicate members retain effective control.

As part of their contractual obligations to the legitimate payroll company’s clients, the Tier 2 companies are required to remit pay as you go (PAYG) withholding tax payments to the ATO on behalf of the clients.

However, investigators found that only part of these tax obligations were paid. The remaining money was allegedly siphoned off by the syndicate members and channelled through a complex series of companies and trusts for their own personal gain.