McGuire said companies involved in the alleged Plutus tax evasion were paying workers their take-home pay after PAYG had been deducted, but “significantly and significantly” had failed to pay the full PAYG to the ATO, and to instead partial payments had been made “intermittently and for minimal amounts”. .
“The deal…is that no one was going to pay the full tax,” he said.
The court heard the charges stemmed from a police investigation called Operation Elbrus in which numerous conversations and phone calls involving the accused were recorded by authorities from late 2016.
The jury was told they would hear the name and voice of Michael Cranston, father of Lauren and Adam Cranston, who was Deputy Commissioner of the ATO at the time.
“You will hear recordings (…) during which it would appear that Adam Cranston was using his father as a sounding board and to obtain information,” the prosecutor said.
He pointed out that there was no allegation that Michael Cranston was involved, “apart from answering his son’s questions, which the Crown says he was entitled to do.”
McGuire explained key terms he expects the jury to hear in the secret tapes, including “numerous defendants” who allegedly spoke about the removal of accounting records from the Xero software package, “so that the tax office and the police don’t find out”. fraud”.
He said some of the co-defendants allegedly discussed “the risk and danger of being called for a 353”.
“In effect, it’s a notice that the tax office can send out to people requiring them to come … for a mandatory review,” McGuire said.
The co-defendant reportedly expressed concerns in some conversations about garnishment notices or the ATO seizing and freezing money to pay outstanding debt.
The Crown alleges that whenever the ATO issued garnishment notices or “nearly uncovered this fraud”, the lower companies within Plutus’ corporate structure were liquidated.
“Willfully wound up, says the Crown, by the co-defendant…to put the tax office off the track,” McGuire said.
“Leaving these companies effectively holding a debt that the taxman could never collect.”
He said ‘phoenix’ activity is alluded to in the records, when a new company is formed to continue the business of a company ‘deliberately liquidated or otherwise abandoned…to avoid paying its debts’.
“You might know yourselves, maybe from Harry Potter and other things, that the phoenix is a mythological bird,” McGuire said. “When the phoenix died, it would burst into flames and out of the ashes of that dead bird would rise…a replacement phoenix.”
According to him, “like a new phoenix rises from its ashes”, new companies would replace those liquidated.
The Crown says that over time, alleged participants in the fraud moved away from Plutus and second-tier companies, and settled “unsophisticated” people – often unemployed, struggling with substance abuse issues or dependent and in “desperate need” of money – as straw managers. .
These people didn’t know that corporations “don’t pay taxes,” McGuire said.
The trial continues before Judge Anthony Payne.
The Morning Edition newsletter is our guide to the most important and interesting events of the day. stories, analysis and insights. register here.