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Thousands of individuals are suspected in a wave of fake businesses.
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ATO pursues $850m in fraudulent GST claims
09 May 2022
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The ATO has launched an investigation into $850 million of potentially fraudulent GST payments involving thousands of individuals.
Operation Protego was set up after a spike in false refunds involving fake businesses, with the ATO suspecting as many as 40,000 people are involved with an average claim of $20,000 apiece.
“The ATO is warning the community not to engage with this fraud and for participants to come forward before we take tougher action,” the ATO said.
“Sophisticated risk models deployed by the ATO coupled with intelligence received from banks, including through the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia, identified a recent spike in suspicious refunds.
“We are working with financial institutions who have frozen suspected fraudulent amounts in bank accounts. The ATO has also stopped many more attempted frauds.”
The ATO said the fraud had involved offenders inventing fake businesses and ABN applications, many in their own names, then submitting fictitious business activity statements in an attempt to gain GST refunds.
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One recent case involved a former swimming teacher who attempted to claim $278,000 in fake GST refunds and was sentenced to three years in jail.
The ATO was also working closely with law enforcement agencies to prioritise criminal action against those who have established and induced participation in the fraud.
ATO deputy commissioner and chief of the Serious Financial Crime Taskforce Will Day said information on how to attempt the fraud was being shared online, including via social media platforms.
“We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is,” Mr Day said.
“The people who have participated in this fraud are not anonymous. We know who they are, and we will be taking action.
“We are urging anyone involved to face the music and come forward now rather than face even tougher consequences later, including penalties and criminal charges.”
Mr Day said some legitimate taxpayers might find they had to take extra steps to receive legitimate refunds as the ATO had put additional controls in place as a result of the fraud.
“But we must emphasise that the fraudsters are not real or legitimate small businesses,” Mr Day said.
“People who have participated in this fraud may have unwittingly followed advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment.
“However, for others there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund.”
Mr Day said deliberate attempts to defraud the ATO or a refusal to organise repayments would lead to tougher actions, including criminal sanctions.
The ATO said anyone who had engaged in the fraud should call the ATO’s dedicated hotline on 1300 130 017.
If taxpayers had given their myGov details to a criminal, the Tax Office could assist in protecting their identity from being used to commit further crimes.
“For any matters where you believe your identity has been compromised, phone us on 1800 467 033 for assistance,” the ATO said.
“We take all reports of tax crime seriously. If you have any information to share, you can do so by visiting ato.gov.au/tipoff or phoning 1800 060 062. Reports can be made anonymously.”
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