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Suspected dodgy advisers, directors head to court after ATO swoop

Suspected dodgy advisers, directors head to court after ATO swoop

The Federal Court has commenced public examinations on entities connected to a dodgy pre-insolvency adviser, in a move welcomed as shining the light on illegal operators.

Tax&Compliance Jotham Lian 29 August 2018

ATO deputy commissioner Will Day has confirmed that more than 45 service providers, clients, employees, and alleged ‘dummy directors’ of phoenix companies connected to pre-insolvency adviser Philip Whiteman will be examined in the Federal Court on the grounds of suspected promotion and facilitation of phoenix activities and tax schemes.

The ATO has funded court-appointed liquidators, Pitcher Partners, to investigate the affairs and conduct of these entities before any further legal action by the Commonwealth is considered.

Mr Day said the court proceedings were a reminder of the impact of the overall estimated $5-billion hole caused by illegal phoenixing activity, and the ATO’s hard-line stance on facilitators and benefactors of such schemes.

“While we can’t comment on the details of specific matters before the courts, this is a timely reminder of the human impact of illegal phoenix activity,” Mr Day said.

“Combatting illegal phoenix behaviour is a high priority for the ATO.

“Our focus is on detecting those who promote and facilitate illegal phoenix behaviour, and disrupting those who willingly engage in phoenixing.”

Speaking to Accountants Daily, Australian Restructuring Insolvency & Turnaround Association (ARITA) chief executive John Winter said the ATO’s crackdown on illegal and unregulated insolvency advisers was a welcome move.

“These unregulated and almost-always unqualified advisers promote their wares to often unsuspecting people who are in financial distress, and what they offer them is generally illegal solutions,” said Mr Winter.

“They are rightly chasing down the dodgy, unqualified advisers. If there are any registered liquidators involved in this, we want them identified and removed from the profession more than anyone else.

“They are [a] scourge on the economy, ripping off creditors, employees and taking advantage of people at their weakest moments. The message needs to be sent to these so-called advisers and the directors who use them that they will be found out and prosecuted.”

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Suspected dodgy advisers, directors head to court after ATO swoop
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