The Australian Tax Office has proudly updated its web page dedicated to Operation Protego, boasting about the recent jail terms handed to three GST cheats.
The ATO describes Operation Protego as an ATO-led investigation into large-scale fraud that was promoted on social media. Well done ATO, you might say. No one wants swindlers taking revenue out of the tax system, because you and I pay for that.
But I have to say that “ATO-led” is an interesting take on a scam that went totally unnoticed by the ATO while 57,000 people claimed fake GST refunds totalling $2 billion based on a TikTok trend. The fraud was eventually uncovered by the banks who claim they had been noticing and reporting unusual deposits, some as big as $100,000, for a couple of years.
Eventually the ATO woke up and set up a taskforce, which uncovered the extent of the scam, including the identification of 150 participating ATO officials. Interestingly, that little statistic did not make it into their braggadocious blog.
Anyway, the three cheats were sentenced over a combined amount of $242,537, hardly a drop in the ocean, but better than nothing.
The first cheat, Mr Pimm, reactivated his old trucking ABN and lodged 37 false business activity statements. He initially got away with $168,000 in GST refunds, before the ATO realised and intercepted a further $300,000 of false claims. He’ll do two and half years in jail.
The second, Ms Hoek, set up a new ABN for a fake business and lodged several erroneous activity statements for herself and a fellow TikTok friend. She copped three months in jail.
The third was Ms Hoek’s bestie, Ms Nutley, who handed over her MyGov login credentials to Ms Hoek so she too could join in the fun. She got a nine-month sentence but is out on a release order.
Their biggest scalp to date is a Mr Andree-Jansz who claimed $2.4m in GST refunds in his fake plumbing business. He lodged business activity statements showing plumbing purchases of $30 million which incredibly raised no alarm bells at the ATO. He was sentenced in April and got four years and seven months.
At the time, ATO Deputy Commissioner John Ford said, “It is astounding that people think they can get away with this type of behaviour”. I think it is more astounding that this type of behaviour could go unnoticed for so long.
The ATO may be celebrating the convictions, but taxpayers deserve better vigilance—catching fraud after billions vanish isn’t success; it’s damage control. The next TikTok hack is lurking around the corner. Let’s hope some valuable lessons were learned before more taxpayer dollars walk out of the door.
by MARK DOUGLAS
FCPA
Managing Partner of Francis A Jones
www.faj.com.au