Operation Elbrus: Trio jailed over tax fraud

This is a joint media release between the Australian Federal Police and the Australian Taxation Office as part of the Serious Financial Crime Taskforce.

Three men have been jailed for their roles in a large-scale tax fraud and money laundering syndicate responsible for defrauding the Australian tax system of more than $105 million over three years.

Operation Elbrus, also known as the Plutus Payroll fraud, was a joint Australian Federal Police (AFP) and Australian Taxation Office (ATO) investigation that became a key focus for the Serious Financial Taskforce in 2017. Fourteen people have been sentenced to date.

Operation Elbrus revealed that a group of people used payroll services companies to divert pay-as-you-go withholding tax and goods and services tax owed to the Australian Taxation Office.

A Menai man, 36, was sentenced on 22 August, 2023, by the Supreme Court of NSW to 15 years’ imprisonment, with a non-parole period of 10 years’. The man received over $6 million in ill-gotten gains and was one of the conspiracy’s key orchestrators.

A Vaucluse man, 53, was also sentenced on 22 August, 2023, to 15 years’ imprisonment, with a non-parole period of 10 years’. He was a key facilitator in the creation and operation of the fraudulent scheme.

This follows the sentencing of a Thornleigh man, 39, on 4 July, 2023, who received 14 years’ imprisonment, with a non-parole period of nine years’. He was found to have used his knowledge, qualification and professional status as a solicitor to mislead the ATO.

The three men were each found guilty of:

  • One count of conspiracy to dishonestly cause a loss to the Commonwealth, contrary to section 135.4(3) of the Criminal Code (Cth); and
  • One conspiracy to deal with money of a value of $1,000,000 or more believing it to be the proceeds of crime, contrary to sections 11.5(1) and 400.3(1) of the Criminal Code (Cth).

AFP Detective Superintendent Kristie Cressy said tax fraud corrodes societal norms and is not a victimless crime.

“Tax fraud robs honest taxpayers of funds that could be used to improve essential community services and facilities,” Det-Supt Cressy said.

“This deceptive and sophisticated scheme saw millions of dollars siphoned off for the personal benefit of the co-conspirators.

“Investigations into tax fraud are extremely complex and require highly skilled detectives, forensic accountants and technical experts.

“Tax cheats will not be rewarded for their actions and the consequences for committing these types of offences often lead to years in prison.”

ATO Serious Financial Crime Taskforce Chief John Ford said that even though the fraudulent scheme was implemented with the help of professional enablers, taskforce agencies were able to successfully investigate and prosecute these criminals.

“These court results reflect the severity of offending and show the commitment and strength that of the multi-agency Serious Financial Crime Taskforce has in bringing financial criminals to account.”

“If you think you can steal and cheat the system for your own financial gain and believe you won’t be caught, think again,” Mr Ford said.

“We’re serious about protecting Australia’s revenue, and sending a clear warning message to other would-be tax cheats that it’s only a matter of time before they’re caught.”

The matter was prosecuted by the Commonwealth Director of Public Prosecutions.

/Public Release. View in full here.