Thursday, February 15, 2007

So you've stashed some money away offshore... watch out

The Australian tax office is set to “ramp up” prosecutions flowing from Australia’s biggest ever white-collar criminal investigation.

Project Wickenby has already scored one high profile scalp – the music industry identity Glenn Wheatley who has managed John Farnham, the Little River Band and Delta Goodrem. Wheatley’s lawyer told a Melbourne court earlier this month that he would plead guilty to charged relating to tax fraud.

The Tax Commissioner Michael D’Ascenzo told a Senate estimates committee yesterday that the Australian Federal Police and the Australian Crime Commission had 10 ten criminal investigations under way and that the Tax Office and the Securities commission were investigating in excess of another 100...

Last year three people were arrested and charged in Queensland.

Wickenby is a joint operation set up by the Commonwealth to recover more than $300 million dollars believed hidden offshore by high-wealth individuals using a scheme promoted by a Swiss-based accountant Philip Egglishaw.

A brochure obtained from a Sydney hotel room in 2003 said Mr Egglishaw’s services had "proved particularly attractive to entertainers (including actors and pop stars), film directors and producers, sportsmen, international executives ... and other clients who have already established offshore structures".

Commissioner D’Ascenzo told the estimates committee yesterday that he expected a ramp up in prosecutions and guilty pleas in the months ahead.

He said already 20 suspects had pleaded guilty in order to avoid a trial, making the tax office more than 30 million dollars.

“We are now seeing people, like the recent example where the person involved is saying ‘I don’t even want to go to committal. I want to come and plead guilty and co-operate and get on with things’.” Mr D’Ascenzo said.

Until recently an avalanche of legal challenges had slowed the project’s progress. “In the last 2 to 3 years the Australian Crime Commission has had more than 20 challenges to its authority. The ACC has been successful in all 20 cases, , but it goes to show how tenacious those that don’t want to see due process achieved are, and how well resourced they are,” he said.

The Commissioner said he had been successful in fighting claims for legal professional privilege. “When you look at legal professional privilege, there is two types, one is in regard to contemplated litigation, which is not the type of area that we would be concerned about. The other is in relation to the advice given as to how you could structure your affairs to avoid the tax laws. Privilege should not and cannot go to the commission of an offence. If you are providing advice to break the law then professional privilege doesn’t really take you far”.

Mr D’Ascenzo said he would like understanding what the concern of lawyers about access to their tax advice really was.

He said the government had promised legislation that would allow the Tax Office to share otherwise confidential information with its partners in Project Wickenby, something that should speed the investigation.