Plutus Payroll: Unraveling the $165 Million Tax Fraud Scheme

This report examines the Plutus Payroll tax fraud, a significant financial crime in Australia. The scam, orchestrated by Plutus Payroll, involved withholding taxes owed to the Australian Taxation Office (ATO) between June 2016 and May 2017, resulting in a $165 million fraud. The report details the scheme, which utilized shell companies and false bank accounts to divert funds. Key individuals implicated include Michael Cranston, Adam Cranston, and Simon Anquetil. The report also covers the evidence collected by police, including a fake trust account, and the forensic investigation process. It emphasizes the importance of adhering to ethical codes and unbiased investigation in such cases, and highlights areas where further evidence is needed to bring all involved parties to justice.

Running head: PLUTUS PAYROLL THE STORY OF A TAX FRAUD
Plutus Payroll the Story of a Tax Fraud
Student’s Name:
University Name:
Author Note

1PLUTUS PAYROLL THE STORY OF A TAX FRAUD
Question 1
The information that is asked for in the first question is that how the tax scam was
executed by the Plutus Payroll, a payroll administration company. The story as suspected by
the Federal Police of Australia is that the entire fraud was carried out under the veal of Pay
As You Go scheme by further holding back the tax which it owed to the Australian Taxation
Office (ATO). The entire fraudulent activity ran for an entire year, right from June 2016 till
May 2017 and pulled out a scam of approx $165 million1. Plutus Payroll essentially provided
services to administer payroll for customers who generally are large corporate employers.
Plutus used to collect the funds from these companies for the payment of wages and salaries.
The primary task of Plutus was to collect the funds and pay the Pay As You Go contributions
to the ATO. But the scammers in order to carry out the scam successfully set up small scale
companies which disguised their conspiracy. Plutus would pose as funding the collections in
aproper way and then forwarding the PAYG tax to the Australian Taxation Office but would
keep a part of the money illegally. They would do so with the help of false bank accounts and
other documents.
The members majorly involved in the scam are Michael Cranston, (ATO Deputy
Commissioner); Adam Cranston (son of Michael); Lauren Cranston (Daughter of Michael);
Dev Menon (Tax lawyer); Jason Onley (business partner of Adam Cranston); Simon Anquetil
(Former chairman and Chief Executive officer of Plutus)2.
1 Michael Evans, How The Alleged $165 Million Tax Scam Worked (2017)
The Sydney Morning Herald <http://www.smh.com.au/national/how-the-
alleged-165-million-tax-scam-worked-20170518-gw7wuz.html>.
2 Plutus Payroll Clients And Staff Fell For Plausible Business Model Fairy
Tales (2017) Theregister.co.uk

2PLUTUS PAYROLL THE STORY OF A TAX FRAUD
Question 2
The Plutus payroll scam is one of the biggest white collar frauds that had occurred in
the history of Australia. The case as observed has involved a senior level tax official of the
Australian Taxation Office and his family and also resulted in a number of police arrests and
the legal seizure of a huge list of luxury goods, which also included sports cars and light
planes. The scam was executed in a very subtle way. Plutus received funds from legitimate
clients in order to process or administer their payroll. This money was in turn transferred to
small tier companies comprising of anti socials who were especially hired in order to run
these sub contracted companies which acted as a cover for the fraud. The directors of these
companies were known as straw directors. These people knew nothing about controlling or
managing business but worked for a share in the illegally earned scam money. Now the tax
obligations that were required to be paid by the means of Pay As You Go to the Australian
Taxation Office were not paid. Investigations conducted later found out that only a part of the
tax obligations were paid. The remaining money of there was no account was allegedly
ripped off by the scammers and distributed through a critical number of companies and firms
for their own illegal benefits.3
The parties majorly involved in the scam were Adam Cranston, the son of Michael
Cranston and Simon Anquetil, a tech entrepreneur4.
<https://www.theregister.co.uk/2017/05/19/plutus_payroll_fallout/>.
3 Business Australia, What We Know About Plutus Payroll, The Company
Allegedly At The Centre Of Australia's Biggest Tax Fraud (2017) Business
Insider <http://www.businessinsider.com/what-we-know-about-plutus-
payroll-the-company-allegedly-at-the-centre-of-australias-biggest-tax-
fraud-2017-5?IR=T>.

3PLUTUS PAYROLL THE STORY OF A TAX FRAUD
Question 3
The question that has been asked is that what are the evidence that were collected
against the scammers of Plutus Payroll. Police investigations came up with evidence that a
fake trust account was created in order to support the scam. It was found out that the two
masterminds of the scam were Adam Cranston and Jay Onley. The responsibility of the fake
trust account though was controlled by Chalabian, who still remains without any charge. In a
report presented by the investigating officer it has been mentioned that the fake trust account
funds worth millions and the other two major players of the scam Daniel Rostankovski and
Daniel Hausman blackmailed their co-conspirators for extra share. In October, police
investigators came upon an evidence as Adam Cranston discussed how one of the handful
number of small tier companies, the conspirators did channel money for the scam transferred
$2.745 million to the trust account5 .
4 Senior Manager From Payroll Company Embroiled In Tax Fraud Speaks
Out (2017) Mail Online <http://www.dailymail.co.uk/news/article-
4521228/Plutus-Payroll-Australia-manager-speaks-tax-fraud.html>.
5 Ben Butler and Ben Butler, Lawyers Caught Up In Fraud Sting (2017)
Theaustralian.com.au <http://www.theaustralian.com.au/business/plutus-
scam-lawyers-caught-up-in-payroll-fraud-sting/news-story/
22f9df1654d0988b22e24ddf33d94504>.

4PLUTUS PAYROLL THE STORY OF A TAX FRAUD
Question 4
As a forensic investigator the proceedings has to be done seriously.6 The proceedings
of the case should match with APES 215, that is it should comply with certain laid down
codes like the Code of Conduct and that there should be an expert witness. The two final
steps would be that re-checking whether all the investigation has been done without any kind
of biasness that is the case has been investigated from a neutral point of view. As it is found
in this study there are a handful of people who still remain without any charge, so the second
step would be sincere effort for collection of enough evidence so that these people could be
found guilty.
6 (2017) <http://www.apesb.org.au/uploads/standards/apesb_standards/13092014103232p1.pdf>.

5PLUTUS PAYROLL THE STORY OF A TAX FRAUD
References
Evans, Michael, How The Alleged $165 Million Tax Scam Worked (2017)
The Sydney Morning Herald http://www.smh.com.au/national/how-the-
alleged-165-million-tax-scam-worked-20170518-gw7wuz.html
Plutus Payroll Clients And Staff Fell For Plausible Business Model Fairy
Tales (2017) Theregister.co.uk
<https://www.theregister.co.uk/2017/05/19/plutus_payroll_fallout/>
Australia, Business, What We Know About Plutus Payroll, The Company
Allegedly At The Centre Of Australia's Biggest Tax Fraud (2017) Business
Insider http://www.businessinsider.com/what-we-know-about-plutus-
payroll-the-company-allegedly-at-the-centre-of-australias-biggest-tax-
fraud-2017-5?IR=T
Senior Manager From Payroll Company Embroiled In Tax Fraud Speaks Out
(2017) Mail Online
http://www.dailymail.co.uk/news/article-4521228/Plutus-Payroll-Australia-
manager-speaks-tax-fraud.html
Senior Manager From Payroll Company Embroiled In Tax Fraud Speaks Out
(2017) Mail Online
http://www.dailymail.co.uk/news/article-4521228/Plutus-Payroll-Australia-
manager-speaks-tax-fraud.html

6PLUTUS PAYROLL THE STORY OF A TAX FRAUD
(2017)
<http://www.apesb.org.au/uploads/standards/apesb_standards/13092014
103232p1.pdf>