Government hunts down fake businesses with intensified fraud crackdown

The Australian Taxation Office (ATO) and the Australian Federal Police (AFP) executed raids across the country to crack down on individuals suspected of defrauding by inventing fake businesses to claim false refunds.

The ATO-led Serious Financial Crime Taskforce (SFCT) raided 12 locations in New South Wales, Victoria, Tasmania, South Australia, Western Australia, and Queensland in mid-June as part of the “Operation Protego,” which saw warrants executed against 19 individuals suspected of being involved in Goods and Services Tax (GST) fraud.

Based on the AFP, the fraud involves offenders who invent fake businesses and Australian Business Number (ABN) applications, many of which are in their own names, then submitting fabricated Business Activity Statements to gain a false GST refund. In some cases, people have been encouraged to hand over their personal details to facilitators.

 ATO Deputy Commissioner and SFCT Chief Will Day said that before the raid, warnings had been sent for violating individuals to come forward before more robust measures would be taken.

However, Day said that despite the warning, many individuals remained indifferent and attempted to engage in such illegal practice.

Warning for fraudsters

Day said that ATO has already stopped more than a billion dollars in attempted fraud, and this accomplishment rate is a “clear warning” to individuals participating in such illegal practice that they will not be successful and will soon face consequences in their attempts.

“For those that have already committed this fraud, we know who you are, and you will need to repay the fake refunds you have obtained,” he said. “You could face severe consequences, including jail if you do not speak to us before we knock on your door. Come forward now or face potentially tougher penalties.

Operation Protego was referred to the SCT as a priority, and Day said they would continue to take a “swift and decisive action” against individuals who participate in financial crime.

“Most Australians play by the rules and expect the ATO to take action to protect Australia’s tax and super systems and collect the revenue necessary to support the Australian community,” he said.

Christopher Woods, AFP commander economic, corporate crime and corruption, also said that the federal police takes GST fraud as a “serious” concern because such exploitation of Australia’s tax system negatively impacts the community.        

 “Every dollar fraudulently obtained represents lost funds that could have been used to benefit everyday Australians in our community,” Woods said. “The AFP is committed to combating financial crimes and we will continue to work diligently with our partners in the Serious Financial Crime Taskforce to disrupt and dismantle criminals seeking to cheat the tax system.”