There has been a lot mission slippage in Project Wickenby. It started off investigating tax evasion and tax havens, but quickly degenerated into into tax evasion and any offshore activity – including that well-known tax haven New Zealand.
Robert Agius was allegedly involved in a very simple scheme employing New Zealand banks to engage in round tripping. Clients would end up lending money to themselves and would claim interest payments as a tax deduction.
Under the scheme, Australian customers would transfer money to accounts in Vanuatu and New Zealand, claiming them as a business expense.
The money would then be returned to Australia less commission in the form of a loan, and a repayment would be treated as a tax deduction.
This is illegal and IMHO should be illegal. I have no problem with the tax authorities trying to prevent this sort of thing. Do we really need a special $400 million taskforce to prevent simple crime like this?
The AFP alleged the scheme involved evasion of $13 million in taxes on $100 million of the man’s customers’ business profits.
Mr Agius allegedly received $1.4 million in commissions, through foreign bank accounts, since 2000.
So why bring this up now?
A lawyer for the Commonwealth Director of Public Prosecutions is expected today to tell the NSW Supreme Court that the most serious charge against Mr Agius, money laundering, has been dropped. The charge carries a maximum sentence of 25 years’ imprisonment.
Two other charges of “conspiring to defraud” remain, with each charge carrying a maximum 10 years’ imprisonment. Mr Agius will be formally arraigned in court on those charges today.
That’s right – the case against Agius has more or less collapsed.
Bear in mind the scheme that he allegedly operated is very simple; now look at the case against him.
More than 200 witnesses were due to give evidence, with the case expected to last between six months and a year. Tens of thousands of financial transactions had been scrutinised and 420 lever arch folders full of documents had been prepared.
The matters in question were “taking considerable time to prepare” and were described as “enormous” by the lawyer for the crown.
So here is the trade-off; government has a duty to enforce the laws of the land but at the same time shouldn’t pass laws that are impossible to enforce. If the government cannot enforce laws against round-tripping it is going to struggle to enforce laws that attempt to expand the tax base beyond the territorial borders of Australia. That suggests that a source-based tax system is likely to dominate an international tax system.
I would like to have the question posed what guarantee ther is that Bob Brown will be the leader of the Greens during the duration of the next term.
Also there should be some focus on what future demands (blackmail) the Greens will come up with once they have the balance of power.
Lutz Jacoby
3 Sep 10 at 8:29 am
Typical bungling by the Feds. The problem is that the sharpest knives in the draaw don’t tend to work for the Government. Peter Costello and the ATO recognised this fact in 2006 and instituted a scheme whereby some private fiirms were briefed by the ATO. AS soon as Labor came in the scheme was wound down. I took part in the scheme. My experience was that the ATO is unfortunate in that its staff are all life-long public servants who struggle to come to grips with the commercial world. That’s a nice way of saying they are stymied by the complexity of modern commercial and finacial transactions.
Rococo Liberal
3 Sep 10 at 9:10 am
COuld I just add that the thing that the ATO and the Feds most need to do is get the tax back. They can do that by using the civil recovery regime. Charging around like Elliot Ness probably makes them feel good, but it also probably cost more than the $13m avoided.
Rococo Liberal
3 Sep 10 at 9:14 am
RL – charging around like Elliot Ness gives the illusion of doing work. The ATO also often report how much revenue has been identified but you really have to search to find how much revenue has actually been collected.
Sinclair Davidson
3 Sep 10 at 9:41 am
Too true Sinclair
Rococo Liberal
3 Sep 10 at 10:14 am