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A pre-insolvency adviser now faces close to $850,000 in charges and possible jail time after allegedly facilitating illegal phoenix activity.
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Pre-insolvency adviser charged over illegal phoenix activity
28 April 2021
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Facing the Melbourne Magistrates Court on Monday, the 62-year-old man was charged with nine offences of dishonestly causing a loss to the Commonwealth under the Criminal Code.
He also faces a further four offences relating to the obstruction of Commonwealth officials, with the man allegedly preventing ATO officers from undertaking their duties during an access visit.
The charges come after a long-standing investigation by the ATO-led Serious Financial Crime Taskforce (SFCT) and the Australian Federal Police.
The investigation found that the pre-insolvency service provider had ensured that PAYG withheld from employees’ wages was not remitted to the ATO.
To conceal his involvement in the scheme, the man is alleged to have taken control of a number of businesses in financial difficulty, arranged for payment summaries to be issued to the employees using the details of these businesses, and had straw directors appointed to the businesses.
ATO deputy commissioner and SFCT chief Will Day said the charges laid against the man was a testament to the agency’s commitment to stamping out illegal phoenix activity.
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“The Phoenix Taskforce has done an incredible job in bringing this matter to resolution before it was referred to the SFCT for criminal investigation. The collaboration between the two taskforces, and the combined power of so many government departments, should send a strong message to financial criminals that their time is up,” Mr Day said.
“Phoenixing is an intentional act that requires planning — planning to build up debts, extract profits, liquidate the company and start again in a new company name.
“The alleged behaviour in this case demonstrates a calculated and callous disregard for the law, by someone who took advantage of his clients for his own benefit. The community won’t tolerate this behaviour, and neither will the SFCT.”
The latest collaboration between the ATO and the AFP comes after a string of recent cases, including a $2.57 million tax evasion case and an illegal early access to super scheme.
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