Architect of tech contractor tax fraud scheme jailed for at least five years
Payroll company kept over $70m of tax and founders spent it lavishly
The co-founder of a company that left IT contractors unpaid has been jailed for seven-and-a-half years.
This story started in May 2017 when The Register heard of Australian IT contractors going unpaid by the third-party service they used to process payrolls and handle other aspects of their affairs.
The service concerned, Plutus Payroll, was technically the contractors’ employer, but they actually worked at other companies. Plutus’ role was to provide contract staff to its clients, ensure contractors were paid and that income tax was remitted as required under Australian law. Other firms that provide this service typically charge a fee to contractors. Plutus’ services were free, an offer that won it thousands of contractor clients.
Plutus was able to offer its services for free because it wasn’t remitting income tax. Instead, the company’s founders trousered much of that cash and weren’t afraid to spend it.
Australia’s federal police and taxation office eventually caught wind of the scheme, swooped and froze Plutus' bank accounts. As staff who weren't aware of the scheme tried to placate contractors, who quickly became irate at not being paid, it emerged that the Australian Taxation Office was behind the freeze because it wanted the tax it was owed.
Within weeks Plutus collapsed and contractors became creditors. To this day some are owed pension payments.
After a swathe of arrests and further investigation, it emerged that Plutus’ principals had failed to pay over AU$100m in tax (US$71m, £54.5m) and had the sports cars and light planes to prove it. But not the legitimate sources of income.
16 Plutus people have since been charged over the affair. Last Friday, Simon Anquetil, described by authorities as “one of the architects of the scheme” was sentenced to seven and a half years jail with a non-parole period of five years.
“This offender’s behavior was sophisticated, planned and motivated by greed, resulting in a massive fraud against the revenue, which effectively is a fraud also on all other law-abiding taxpayers who do the right thing and lawfully pay their taxes,” said commonwealth director of public prosecutions deputy director Berdj Tchakerian.
Plutus Payroll clients and staff fell for plausible business model fairy talesREAD MORE
Anquetil is the fifth person jailed over the affair.
Reaction to the sentence in a Facebook group for contractors owed money was not positive. “That’s really soft,” said one. Others asked “where is the money” and wondered if they would ever receive funds they are still owed.
Deloitte, which is liquidating Plutus, advises that while its work is ongoing, planned court dates have had to be abandoned due to social distancing requirements in Australian courts. Replacements hearings have not been scheduled. ®