Friday, February 17, 2023

ATO pursues 50,000 fraudsters in online-based GST scam worth billions

 ATO and AFP crackdown on Op Protego promoters


Thank you, Minister. As the Minister said, my name is John Ford. I am a Deputy Commissioner with the Australian Tax Office and I'm also the chief of the Serious Financial Crime Task Force. Today, we are warning the community about the continued promotion of fraudulent schemes on social media through platforms such as TikTok, Facebook and Instagram. The Serious Financial Crime Task Force has the capability and the powers across our partner agencies to identify the individuals behind these posts. And as the Minister said this week, we took action against 11 of those individuals who have been promoting this fraud in the community. 

For the community, the ATO does not offer loans. So when these social media posts suggest you can get a free loan, this is not true, you should check your facts. Again, if you are not in business, you do not need to lodge a BAS with the Australian Taxation Office. If you are not in business and you do lodge a tax, you are committing fraud. We take these attempts at fraud seriously. We are actively monitoring intelligence both across the social media platforms, but also through community information and information we get through our law enforcement partners, as well as institutions such as banks. As I said before, to make it clear, we have the capacity, through the Serious Financial Crime Task Force, to identify those who are promoting this fraud and we will take action, including criminal sanctions. 

And, as the Minister says, 2 people are already in jail. For those who may be tempted of big gains, my message to you is, we have sophisticated risk models. We are stopping these frauds in the majority of instances before they get into the hands of fraudsters. In fact, we have stopped $2.5 billion in attempted fraud. It's not a matter of if you will get caught, it is a matter of when you will get caught. To date, across our law enforcement agency partners, we have executed a total of 117 warrants. We have 87 arrests and, as the Minister says, 3 convictions, 2 of whom, those individuals are now sitting in jail. We are taking compliance action against 53,000 individual clients who have been involved in this fraudulent activity. 

For those engaged, if they do not take the opportunity to come forward, they will face firmer action from the Australian Taxation Office. As the Minister's mentioned this week, we are writing to 20,000 of those individuals and we are putting them on notice they have not engaged with them, with us. We know who they are and we we are forewarning to them. If they do not engage, we will take firm action. Finally, the message that I would like to leave you with is the ATO will find you and when we do, we will take appropriate action to address your criminal behaviour.

Doorstop interview, Parliament House, Canberra

ATO pursues 50,000 fraudsters in online-based GST scam worth billions

Luca Ittimani

The Australian Taxation Office’s largest-ever crackdown on GST fraud has prevented the payment of $2.5 billion in dodgy refunds, led to two people being jailed and 20,000 fraudsters set to receive letters ordering them to repay money.

The ATO is pursuing another 30,000 fraudsters, warning them of serious consequences unless they come forward.

Operation Protego was launched after the ATO detected in early 2022 a scam involving offenders inventing fake businesses and submitting fictitious business activity statements to obtain fraudulent refunds.

Promoters of the fraud use social media platforms including TikTok, Instagram and Facebook to recruit participants.

Nearly 90 people have been arrested and warrants have been executed in three states against another 10 individuals suspected of promoting the fraud, according to John Ford, an ATO deputy commissioner and chief of the Serious Financial Crime Taskforce.

“It’s not a matter of if you will get caught, it’s a matter of when you will get caught,” he said.

“When people are promoting this fraud behind their keyboard, we can identify them, and we will take action.”

Mr Ford said the fraud was relatively unsophisticated but harmful because many people were involved.

“The difference is the promotion via social media is bringing in Australians who generally wouldn’t commit fraud,” he said. “It’s smaller numbers but at a larger scale.”

The fraud takes advantage of the ATO systems that provide GST refunds without scrutiny for businesses.

The lack of oversight is intended to enable new businesses to maintain their cash flow by expediting their refund claims.

Assistant Treasurer Stephen Jones said that while $2.5 billion in attempted fraud had been prevented, $1.7 billion had been successfully defrauded.

“This is not some fancy tax accountant who’s found a loophole in the law,” he said.

“This is not accidental over-claiming – it’s alleged these offenders took deliberate steps to engage in tax crime and encouraged others to do the same.”