Case studies

A well-organised child care fraud syndicate allegedly defrauded the Commonwealth Government’s Family Day Care Program of $4 million over a 10 month period.

Vulnerabilities within the Australian Government’s Home Insulation Scheme led to systemic fraud. By April 2010 there were 961 cases where more than one insulator had submitted a claim for payment for insulating the same premises. All were referred for further investigation.

A medical clinic owner defrauded the Commonwealth of more than $3.3 million by claiming rebates for services not given to over 5,870 different patients. He deleted the claims from the clinic's practice management software shortly after submitting them in order to avoid detection from employees and health practitioners of the clinic. The investigation was commenced when several members of the public made enquiries about their claim history for services they had neither sought nor received. The man pleaded guilty to 6 charges of fraud under the Criminal Code 1995 (Cth) and was sentenced to 6 years in prison.

The general manager of a livestock exporter provided forged documents to the Australian Government to obtain approval to export live sheep to Pakistan. The manager caused his employee (without knowing) to alter import requirements from the Pakistani Government and draft a certificate of health to make the sheep appear eligible to be imported into the country. The manager was found guilty of fraud under the Criminal Code 1995 (Cth) and sentenced to 18 months in prison.

The Therapeutic Goods Administration (TGA) identified a company had been importing counterfeit condoms. The TGA proactively contacted customers who purchased the counterfeit condoms and organised a recall in addition to taking action against the supplier. The TGA’s response received positive media coverage and boosted public confidence in the TGA.

A business owner under-reported tax withheld from his employees to a total value of $173,819 to the Australian Taxation Office. The business owner declared he had deducted $84,158 in Pay As You Go tax from his employees' wages when employee tax returns showed he actually withheld $257,977. The man was found guilty of one count of fraud under the Criminal Code 1995 (Cth) and sentenced to 2 years in prison.

Two men from NSW deliberately absorbed $450 million of otherwise assessable income through falsely created losses overseas to evade $135 million in corporate tax. The pair created a web of false identities to aid their deception and siphoned money through the UK, Hong Kong and the UAE via fake domestic and international companies to fund their lavish lifestyles. This approach resulted in $63 million in fraudulent gains. The scheme was described as incredibly complex and one of the largest tax fraud schemes detected in Australia.

A 45-year-old man conspired to defraud the Commonwealth of $10.5 million by engaging in fraudulent behaviour during the construction of a golf course. He used multiple related companies and grossly inflated sale prices between them and then finally failed to remit the Goods & Services Tax to the Australian Taxation Office. In addition his companies failed to supply goods and services to the developments. There were numerous other techniques and attempts to conceal the fraud including large-scale and complex round-robin transactions. The money was not recovered and the man was sentenced to 5 years and 6 months in prison.

A Queensland businessman claimed over $228,328 in Goods & Services Tax refunds which his company wasn’t entitled to. A comprehensive audit found there was no evidence of sales or purchases reported by the entity during this period to support these claims. The company director told auditors he was in the business of buying and selling vehicles (claiming to have sold around 20). He also claimed to have received an inheritance that allowed him to spend over $2.4 million on expenses and purchases. The man was sentenced to 3 years in prison.

A sole trader of a home styling business lodged 32 monthly Business Activity Statements with the Australian Taxation Office to fraudulently obtain $138,076 in Goods & Services Tax refunds. The woman supplied false documents to the Australian Taxation Office to support these statements and claims.