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19-year tax fraud probe ends in jail sentence for scheme promoter

A key promoter of an intricate tax evasion scheme has been sentenced to six years jail, following a 19-year joint tax fraud investigation by the Australian Taxation Office (ATO) and the Australian Federal Police (AFP).

19-year tax fraud probe ends in jail sentence for scheme promoter
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  • Maja Garaca Djurdjevic
  • August 18, 2020
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Philip Northam has been sentenced to six years jail in the District Court of Queensland, for his role as a a key promoter of an intricate tax evasion scheme that was designed to strip Australian companies of their assets and leave them in a position where they were unable to pay their tax liabilities.

Northam was arrested by the AFP on a warrant issued in 2008 when he re-entered Australia in November 2018 after living in Vanuatu for a number of years.

The illegal scheme, promoted by Northam and four other men, concocted a way for companies to transfer all assets of the company to its previous controllers, leaving the company an empty shell that was unable to pay its tax debts.

Once the assets of the company were stripped, new straw directors and shareholders were put in before the company was wound up leaving the entities with no means to pay the tax liabilities.

Northam is the fifth and final offender to be sentenced for his role in the scheme, bringing the two-decade joint investigation to a close. 

“This sentencing shows the tenacity and persistence of the ATO and our partner agencies to hold enablers of illegal schemes to account and to secure an outcome for the benefit of honest taxpayers. It also goes to show that tip offs from the community do pay off,” said assistant commissioner Aislinn Walwyn

“Tax crime is not victimless. This arrangement was set up to deliberately evade paying tax, which is money that could have otherwise been used to fund vital public services that the community relies upon."

Ms Walwyn revealed that the investigation resulted in almost $4.5 million of lost revenue being recovered.

Welcoming the sentencing, AFP Assistant Commissioner Lesa Gale said that while tax fraud can make for a complex investigation, the AFP remains up to the challenge. 

“We have a duty to the community to see matters like this through to prosecution, and bring people to account for their criminal activities,” Ms Gale said. 

The ATO has invited members of the community with any knowledge or concerns about someone involved in tax fraud or evasion, to find out how to report it by visiting ato.gov.au/tipoff or calling 1800 060 062. Reports can be made anonymously.

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