Hundreds of Australians caught up in global sting by tax agencies

Pedro Gonçalves
Hundreds of Australians caught up in global sting by tax agencies

Hundreds of Australians who used a Central American bank to hide taxable wealth face being caught up in a global tax avoidance sting, with at least 14 already identified by the Australian Tax Office (ATO).

Australian individuals are expected to face criminal and civil action in the wake of a special "day of action" by the J5 group of tax institutions, made up of agencies from the United States, Australia, Britain, Canada and the Netherlands.

The J5 is looking at clients, some of whom are based in Australia, who are thought to have used the bank to conceal and transfer wealth secretly to avoid tax and hide the proceeds of organised crime. The alleged activity may have been going on for several years.

The message is clear - there is no way to hide and it is only a matter of time"

The unnamed international financial institution, located in Central America, is believed to be using a sophisticated system to conceal and transfer wealth anonymously to evade clients' tax obligations and launder the proceeds of crime.

The J5 identified the financial institution through increased co-operation against the promotion and facilitation of international tax avoidance and money laundering. The action followed the collection of information via search warrants, interviews and subpoenas, which the J5 said had seen "significant information" collated.

Australian Tax Office deputy commissioner Will Day said a complex global investigation had already seen 14 Australian clients of the institution directly engaged by authorities. The Australians are suspected of having undeclared income.

"We are learning more about the arrangements from this engagement and we expect to receive information from our J5 partners ... that will help us to identify the extent of Australians' involvement that may be using this financial institution to evade their tax obligations," he said.

"We already have information about many other taxpayers who may be involved in such arrangements.

"Tackling the abuse of correspondent banking arrangements was at the heart of our day of action last month and we are looking beyond just a single financial institution in Central America."

Day said he feared "many hundreds of Australians" might be caught up in these types of arrangements.

The UK's chief tax fraud investigator warned offshore accountants and lawyers who assist in hiding the assets of criminals and the rich from authorities will face the full force of a five country taskforce.

The J5 was formed 18 months ago after growing concern about the amount of tax evasion by companies and individuals and the threat this posed to domestic tax bases. It is also looking at the use of cryptocurrencies and financial cyber crimes.

The group, already dubbed "the Five Eyes of Tax", met in Sydney this week and warned perpetrators of global taxation crime that their days "are numbered".

"The message is clear - there is no way to hide and it is only a matter of time," Day said.


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