The Australian Taxation Office (ATO) has identified, and is taking strong action, to respond to significant fraud involving participants inventing fake businesses to claim false refunds.
The ATO is warning the community not to engage with this fraud and for participants to come forward before we take tougher action.
Sophisticated risk models deployed by the ATO, coupled with intelligence received from banks including through the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia, identified a recent spike in suspicious refunds.
The ATO, through Operation Protego, is investigating around $850 million in potentially fraudulent payments made to around 40,000 individuals, with the average amount fraudulently claimed being $20,000. We are working with financial institutions who have frozen suspected fraudulent amounts in bank accounts. The ATO has also stopped many more attempted frauds.
The fraud involves offenders inventing fake businesses and Australian Business Number (ABN) applications, many in their own names, then submitting fictitious Business Activity Statements in an attempt to gain a false GST refund.
The ATO is reminding the community that:
- The ATO does not offer loans. If you see someone advertising a way to get a loan from the ATO, this is a rort
- The ATO does not administer government disaster payments
- If you are not in business, you do not need an ABN
- You should never share your myGov login details. You may be giving your identity directly to criminals who can use it to impersonate you, or sell it to other criminals
- Backdating when a fake business is set up to seek a refund will flag you as high risk and we will take action
- False declarations may impact eligibility for other government payments
- We have the data matching ability to detect these patterns and stop the fraud
- Stealing from the ATO is not a victimless crime, you are stealing from people in need of government support and people using public services such as schools and hospitals
- The ATO shares information with a range of government partners when responding to fraud, including law enforcement agencies
- If you engage in tax fraud, you will be caught
The ATO is working closely with law enforcement agencies to prioritise criminal action against those who have established and induced participation in the fraud.
ATO Deputy Commissioner and Chief of the Serious Financial Crime Taskforce Will Day said information on how to attempt the fraud is being shared online including via social media platforms.
"We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is" Mr Day said."
"The people who have participated in this fraud are not anonymous."
"We know who they are, and we will be taking action."
"We are urging anyone involved to face the music and come forward now rather than face even tougher consequences later, including penalties and criminal charges."
"Unfortunately, as we take action to protect revenue some legitimate taxpayers may find they have to take extra steps to receive their legitimate refunds as we have put extra controls in place as a result of this fraud. But we must emphasise that the fraudsters are not real or legitimate small businesses" Mr Day said.
"People who have participated in this fraud may have unwittingly followed advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment."
"However, for others there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund."
"Circumstances where there were deliberate attempts to defraud the ATO or a refusal to organise repayments will lead to tougher actions including criminal action."
Anyone who has engaged in the fraud should call the ATO's dedicated hotline on 1300 130 017.
