Tax Structuring - The Cranston Alleged Scheme

I find this whole story interesting but don't understand how the scheme works. How would you explain it so an idiot like me can understand?

 

Companies paid money to Plutus on the basis it would be used to pay employees' wages and salaries as well as PAYG contributions to ATO (it wasn't, they reportedly skimmed $165 million from these funds)

 

Now wanted by ATO

 

Ahhh makes sense now. And the old man had no idea apparently?

 

What is a 'straw' director?

 

The first project manager for the three little pigs

 

Did those straw directors get sucked in?

Or maybe they were just blowing bubbles and had no idea what was happening?

 

One of the best ever posts on PC. LMFAO

 

What concerns me is that the Government was stupid enough to go for a company promising "no fee payroll" and have several departments using their services.. Shouldn't have their first question have been "so where do they make they money then?" there is always a catch...

 

they answer given to so many was that they worked with other product companies and resold their products to the contractors

 

All good schemes have a sales pitch. Make it sound good and you get volume. A little clip out a huge number and frequency of activity makes you very wealthy. (Elon Musk worked that out with Paypal)

Coles and Woolworths have a similiar MO. They part own the company that process almost all Australia's EFTPOS and cards. They pay a 0% merchant fee on their sales. Small retailers pay far more...Even Aldi must pay (and refused membership). ...Coles and Woolworths make more $ from their competitors often than they do on a retail sale....Then they realised they could do the same with fuel AND the card payment for fuel too.

EFTPOS Payments Australia Ltd (e-pal) could be argued to be a cartel but the major retailers argue they are just one of many members - Their turnover however is 90% + of all turnover. Their ability to pay a 0% fee when all others pay has been queried more than once. And often cited as reason why consumers should not pay surcharges - So the retailers push more sales to themselves with that view.

 

Interesting update

The cocaine-snorting businessman the ATO conspirators hoped would be their patsy

By February 7, the syndicate which allegedly ran the Plutus Payroll scam had become very nervous about the future of their massive, $165 million fraud.

The Australian Taxation Office was closing in and, police allege, the architects of the syndicate had just been forced to pay $5 million to disgruntled members who threatened to publicly expose the scam.

The alleged ringleaders, including Adam Cranston, son of ATO deputy commissioner Michael Cranston, had a crisis meeting on the 46th floor of the offices of Clemenz Lawyers in Sydney to discuss how to foil any tax office investigation.

Their plan was simple: they would pin the fraud on a former associate, Peter Leslie Larcombe, a flashy Sydney businessman with deep links to the Comancheros bikie gang.

 

Plutus Payroll collapse leaves $100m black hole

 

these guys have nothing on what happens in South East Asia.

And guess where all that tax free money went in the past. Australian property.

 

A clueless old man who is paid to be director of the company but has no idea that the organisation is actually a criminal enterprise. This is unsurprising to me. I have seen a lot of bosses that have no idea what is happening in the company. However in this case the director position is symbolic.

 

Just having a quick think about this.

Why didn't the ATO get onto the legitimate clients earlier in the piece and demand payment of outstanding PAYG deductions?

I mean, someone from the ATO could have rung the client and said

"Hey bud, you're obviously still in business, why haven't you remitted your workers' tax? Hmmm why?"

There is obviously a flaw in the ATO collections system.

 

You can't get into trouble until you've submitted your first return - something they casually forgot to do.

 

True. I've heard that about land tax, where you were better off not lodging. That was a while ago, don't know about now.

But with PAYG or even super payments, surely the ATO could print out a list of businesses who haven't remitted a razoo in the last 6 months. It would probably take 3 clicks of a mouse to do it lol. From there you could nip the scheme in the bud.

I don't know, Public Servants. Where's @MyDarlinghurst when you need him, probably pumping iron.