Architect of tech contractor tax fraud scheme jailed for at least five years
- Reference: 1596436326
- News link: https://www.theregister.co.uk/2020/08/03/plutus_payroll_sentencing/
- Source link:
This story started in May 2017 when The Register heard of [1]Australian IT contractors going unpaid by the third-party service they used to process payrolls and handle other aspects of their affairs.
The service concerned, Plutus Payroll, was technically the contractors’ employer, but they actually worked at other companies. Plutus’ role was to provide contract staff to its clients, ensure contractors were paid and that income tax was remitted as required under Australian law. Other firms that provide this service typically charge a fee to contractors. Plutus’ services were free, an offer that won it thousands of contractor clients.
Plutus was able to offer its services for free because it wasn’t remitting income tax. Instead, the company’s founders trousered much of that cash and weren’t afraid to spend it.
Australia’s federal police and taxation office eventually caught wind of the scheme, swooped and froze Plutus' bank accounts. As staff who weren't aware of the scheme tried to placate contractors, who [2]quickly became irate at not being paid , it emerged that the Australian Taxation Office was behind the freeze because it wanted the tax it was owed.
Within weeks [3]Plutus collapsed and contractors became creditors. To this day some are owed pension payments.
After a swathe of arrests and further investigation, it emerged that Plutus’ principals had failed to pay over AU$100m in tax (US$71m, £54.5m) and had the sports cars and light planes to prove it. But not the legitimate sources of income.
16 Plutus people have since been charged over the affair. Last Friday, Simon Anquetil, described by authorities as “one of the architects of the scheme” was sentenced to seven and a half years jail with a non-parole period of five years.
“This offender’s behavior was sophisticated, planned and motivated by greed, resulting in a massive fraud against the revenue, which effectively is a fraud also on all other law-abiding taxpayers who do the right thing and lawfully pay their taxes,” said commonwealth director of public prosecutions deputy director Berdj Tchakerian.
Plutus Payroll clients and staff fell for plausible business model fairy tales [4]READ MORE
Anquetil is the fifth person jailed over the affair.
Reaction to the sentence in a Facebook group for contractors owed money was not positive. “That’s really soft,” said one. Others asked “where is the money” and wondered if they would ever receive funds they are still owed.
Deloitte, which is liquidating Plutus, [5]advises that while its work is ongoing, planned court dates have had to be abandoned due to social distancing requirements in Australian courts. Replacements hearings have not been scheduled. ®
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[1] https://www.theregister.com/2017/05/01/payroll_service_for_contractors_goes_awol_leaving_some_unpaid/
[2] https://www.theregister.com/2017/05/03/plutus_payroll_fallout/
[3] https://www.theregister.com/2017/06/07/receiver_appointed_to_mop_up_plutus_payroll/
[4] https://www.theregister.com/2017/05/19/plutus_payroll_fallout/
[5] https://www2.deloitte.com/au/en/pages/finance/articles/plutus-payroll-australia.html
[6] https://whitepapers.theregister.com/
Probably thought the business made its money by showing ads when people checked their pay slips.
Makes me think, as this kind of business can be largely automated, could you make money out of the delay between you deducting the tax and paying it to the government?
These people certainly did. Probably you can't legally given the current interest rates
So much for 'umbrella' services
HMRC should take note, as contractor tax fraud is clearly not always conducted by the contractors. I guess nothing will change their position though as it's never been based on evidence.
Re: So much for 'umbrella' services
HMRC don't seem to give 2 shits. One of the biggest scheme owners whose clients have been hammered by the Loan Charge, several of which have committed suicide is currently in the process of getting a building named after him by the Prince of Wales Trust.
The lesson with HMRC is make the crime big enough and they won't even bother coming after you. Miss out £50 and they'll fine you until the cows come home
You have to wonder
You really have to wonder what was going through their heads? I mean did they really think $100m was not going to be missed?
Stupidity and greed, such a painful combination...
Thanks!
With everything else down here, this has been totally under-reported in the Aus media. Thanks Simon and ElReg!
Lesson to learn : beware of free
Hindsight is always 20/20, but you have to wonder what is going on when only one company on the market does not charge you for its services.
I readily understand the people who subscribed to the service, why go pay somewhere else when here it's free ?
Well, now we know. It was free because it was fraud, and apparently many people are going to be out of pocket through no fault of their own.
Better stay in jail
With that much money lost by so many people, statistically it would be likely that someone is waiting outside with a shotgun when they leave jail.
Re: Better stay in jail
I'd imagine the odds of that will increase markedly if the taxman decides to make the contractors pay the tax they've not actually paid to date. I realise its not the individual contractors fault, but does the tax collector?
“That’s really soft,” said one.
5 years of prison time... should've added up all the 'time' they'd stolen off the contractors.
"Others ... wondered if they would ever receive funds they are still owed."
Ha! I bet you the shirt off your back that the government takes any money left in the business to pay off tax owed :(