The Plutus and ATO fraud cases involved tax fraud. Plutus is a payroll company that a criminal syndicate used to obtain $165 million that was meant to be paid as taxes. Plutus undertook to process the payrolls of legitimate companies. The money was taken from the clients and transferred to several subcontracted companies. These tier two companies made payments to the employees of the clients. The directors of these companies were recruited to appear as if they were running the companies although the members of the syndicate were in control. These companies are required to remit the pay as you go tax payments to the Australian tax office. Investigations revealed that only part of the taxes was paid. The other part of the taxes was channelled through a complex web of companies and trusts to the members of the syndicate. …show more content…
What really happened is that the payroll company siphoned part of the money and transferred the rest to tier two companies. These companies would pay the employees their wages less taxes as per their agreement with the clients. However, they would only pay part of the taxes and steal the rest of the money.
The key people involved are Adam Cranston who set up a company that controlled the payroll company, Lauren Cranston who managed the accounts of the tier two companies and Simon Arquetil who founded the payroll company, which he had sold but continued to run it. Others involved are Daniel Rostankovski who recruited and managed the straw directors of the second tier companies, Dev Menon a tax lawyer who gave advice on the operation of the fraud and Michael Cranston the ATO deputy commissioner who used information obtained in his official capacity to obtain a benefit for