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The ATO had its hands full this past year tracking down the thousands of fraudsters who invented fake businesses to claim over $2 billion in GST refunds.
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Fake cleaners, horse breeders, project managers: tax scammers in 2024
27 December 2024
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Sham cleaning, construction management companies and even a non-existent horse breeding operation and a massage oil business were just some of the niche fronts concocted by enterprising taxpayers to fraudulently obtain GST refunds from the ATO this year.
The idea of using a sham business to submit business activity statements for GST refunds first came to the Tax Office’s attention in 2021.
It was then promoted widely on TikTok, snowballing into a $2 billion scandal with over 57,000 participants, including a suspected 150 of the ATO’s own staff. In February, the auditor-general slammed the Tax Office’s processes for assessing GST fraud risk as “not fit for purpose” nor operating as intended to stem their proliferation.
The ATO, under pressure, began working closely with law enforcement and other agencies as part of Operation Protego to trace the stolen funds and track down the perpetrators and stolen money.
One of the first offenders to be caught in 2024 was Adam Mitchell, who was sentenced to a community corrections order of 15 months after being caught lodging a fraudulent BAS claiming a refund of $18,000.
Mitchell had registered an ABN in 2017 and registered for GST reporting in April 2022.
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Sisters Arec and Aman Akol chose fake cleaning businesses as their front, and they obtained $69,461 and $85,759 respectively by lodging seven fraudulent BAS between April 2021 and February 2022.
But Arec would be sentenced to 3 months jail in January, and her sister later got nine months in October.
A cleaning company was also favoured by fraudster Tahra Wyntjes, who used it to register for an ABN and lodge 27 fraudulent BAS to obtain a whopping $599,349 in GST refunds. She also attempted to obtain a further $259,976.
Wyntjes was ultimately sentenced to four years in jail in October 2024, with a non-parole period of just over two years.
Meanwhile, Lisa McCormick used her own phony cleaning business as a front to lodge three fraudulent BAS and claim $39,600 in GST refunds. She was sentenced to two and a half years in prison in March 2024.
But the use of fake businesses was not limited to just cleaning companies.
Others opted for construction management: Joshua Mitchell copped an 18-month jail sentence after claiming a refund of $24,200, relying on fabricated BAS for a construction project management company that never existed; Wayne Garrett used the same excuse fraudulently claim $180,095 in refunds and was sentenced to three years and four months in jail.
Craig Hamilton got off lightly, sentenced to two months and two weeks jail, after lodging four fake BAS and claiming $80,000 refunds - the majority of which was recovered by the bank after his account was frozen.
Linden Phillips also used a fake construction business to fraudulently claim over $830,000 in GST refunds, resulting in a jail term of over seven years, though his sentence was later reduced on appeal.
In late November, an unnamed Victorian woman was sentenced to three years and six months in jail after illegally obtaining around $450,000 in GST refunds and attempting to claim a further $245,000 in fraudulent JobKeeper payments to fund her equestrian pursuits and businesses.
The county court found she lodged 26 fake BAS claims in the name of her ex-husband and son over 15 months for a horse stud business registered in December 2019.
A few days later, the ATO announced it obtained a two-year sentence for “luxury spender” Thitikorn Thanawong, who used BAS lodged for a sham an aromatic massage oil manufacturing business to obtain $296,212 in refunds.
The funds were used to buy designer branded items from Louis Vuitton, Saint Laurent and Gucci, ski holiday expenses and direct transfers to associates.
Since its launch in the middle of 2022, Operation Protego has seen a total of 104 people arrested and 53 people convicted.
The ATO has also finalised 60 investigations and referred 51 briefs of evidence to the Commonwealth Director of Public Prosecutions.
But the ATO has made it clear that its work is not finished. The year ended with deputy commissioner and Serious Financial Crimes Taskforce chief John Ford (pictured) declaring a crackdown on GST cheats in 2025.
“Those who seek to defraud the tax and super systems will get caught and face the full force of the law,” Ford said in a statement this month.
Ford said the Tax Office would turn its attention to businesses who engage in more “sophisticated” scams next year.
These included structuring arrangements between inter-related parties undertaken to obscure transactions and disguise artificial or fraudulent arrangements, resulting in high-value GST refunds.
“We are equipped with the resources, sophisticated data matching, analytics capability, and intelligence sharing relationships to uncover even the most elaborate financial crime.”
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