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Joint ATO operation smashes $137m fraud and exploitation ring

Regulation

A two-and-a-half year investigation uncovers cash payments and tax avoidance involving illegal migrants working in the building industry.

By Josh Needs 10 minute read

An ATO taskforce has smashed a $137 million fraud, money laundering and worker exploitation ring with the sentencing this week of a fourth Chinese national.

The joint taskforce with the Australian Border Force (ABF) and the Serious Financial Crime Taskforce (SFCT), dubbed Operation Underpitch, resulted in the fourth Chinese national getting a conviction and fine for her criminal involvement in the construction industry.

Three other Chinese nationals had already been given jail sentences for crimes involving money laundering to pay immigrant building workers. 

A 22-year-old received 12 months imprisonment and a 27-year-old got 15 months imprisonment earlier this year, while a 30-year-old was sentenced to three years and two months in October 2022 for his role in the criminal operation. 

Collectively, the criminals had withdrawn more than $137 million since arriving in Australia to facilitate cash payments for foreign workers being exploited in NSW and the ACT while avoiding tax. 

The joint investigation executed a warrant at an ACT premise and found 12 Chinese nationals, including 10 lawful non-citizens and two unlawful non-citizens, who were being paid in cash to avoid superannuation and PAYG tax. 

The search found evidence including identity and financial documents that indicated employment of unlawful non-citizens and suspected exploitation of foreign workers through cash withdrawals. 

As part of the operation, the ABF issued a civil penalties infringement notice of $49,500, with the taskforce also disrupting the organisation through the restraint of $4 million in accounts and other assets. 

ABF commander of special investigations Penny Spies said the operation sent a strong message that the force would collaborate with other organisations to crack down on illegal work practices. 

“Dishonest employers in the construction industry often pay workers in cash, meaning employees miss out on entitlements including superannuation. All workers deserve fair pay and fair treatment,” said Ms Spies. 

“We will continue to disrupt those who seek to exploit foreign workers here in Australia and they will be brought to justice.” 

“Criminals who want to profit by engaging in visa and migration fraud, money laundering, tax evasion and foreign worker exploitation are firmly in our sights.” 

ATO deputy commissioner and SFCT chief John Ford said financial criminals are often complicit in larger illegal schemes. 

“These criminals are motivated by financial gain and their activities rob the Australian public of revenue to support essential services such as health and education,” said Mr Ford. 

“This action demonstrates that the SFCT agencies will work together on operational activity that will ultimately bring criminals to account.” 

The ATO said the operation was ongoing and that the ABF will continue to work collaboratively with partner agencies to address foreign worker exploitation, tax fraud, money laundering and associated criminality. 

 

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Josh Needs

Josh Needs

AUTHOR

Josh Needs is a journalist at Accountants Daily and SMSF Adviser, which are the leading sources of news, strategy, and educational content for professionals in the accounting and SMSF sectors.

Josh studied journalism at the University of NSW and previously wrote news, feature articles and video reviews for Unsealed 4x4, a specialist offroad motoring website. Since joining the Momentum Media Team in 2022, Josh has written for Accountants Daily and SMSF Adviser.

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