Financial Crime Investigations

Financial crimes are becoming increasingly sophisticated and complex, with a single crime often violating multiple laws. In order to effectively combat financial crime, various government agencies may need to be involved at various stages. This includes the prevention, detection, investigation and prosecution of offences, and recovery of the proceeds of crime.

A recent OECD paper identifies the key agencies responsible for fighting financial crime in Australia, and the ways in which they co-operate to protect the Australian community from the threat of financial crime.

 

Tax administration

The Australian Taxation Office (ATO) deals with tax evasion and fraud, taking action against those who engage in tax crime. Whilst the AFP have primary law enforcement responsibility for investigating serious or complex fraud against the Commonwealth, the ATO also conducts criminal investigations of serious or complex fraud relating to the taxation and superannuation systems. These cases are dealt with by “Private Groups and High Wealth Individuals Tax Evasion and Crime” (PGH TEC), a business area within the ATO. PGH TEC undertakes investigations based on referrals from within the ATO, as well as the Australian Criminal Intelligence Commission (ACIC), the AFP and state and territory police.

 

Police

The Australian Federal Police (AFP) has primary responsibility for investigating a range of criminal offences under Commonwealth law, including serious and complex fraud against the Commonwealth. The AFP has dedicated liaison officers attached to the ATO who assist by providing advice to PGH TEC staff in relation to criminal matters.

 

Other key law enforcement agencies

The Australian Criminal Intelligence Commission (ACIC) is Australia’s national criminal intelligence agency, with work priorities that include targeting criminal wealth. The ACIC Board is comprised of members from various agencies including  the ATO, AFP, state and territory police, Australian Border Force, Australian Securities and Investments Commission, Australian Security Intelligence Organisation and the Attorney-General’s Department.

 

Who prosecutes tax offences in Australia?

Prosecutions of tax offences are undertaken by both the ATO and the Commonwealth Director of Public Prosecutions (CDPP), which is the independent commonwealth prosecutor. In cases where a criminal prosecution could be considered a matter of fraud, PGH TEC Investigations will investigate the criminal offence(s) and refer briefs of evidence to the CDPP who then determine whether to instigate criminal proceedings.

 

Financial Intelligence Unit

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia’s Financial Intelligence Unit, assisting law enforcement and various government agencies in the investigation and prosecution of financial and tax crime.

 

Corruption investigation and prosecution

The AFP has primary law enforcement responsibility for investigating serious or complex fraud and corruption offences. The prosecution of corruption offences at the federal level is conducted by the CDPP.

Australia has several other agencies at the federal level that contribute to the prevention and detection of corruption, including the Australian Commission for Law Enforcement Integrity, ACIC and the Commonwealth Ombudsman. While Australia does not have a central anti-corruption agency at the federal level, such agencies have been established in most sub-national jurisdictions within Australia, for example the NSW Independent Commission against Corruption (ICAC).

 

Financial regulator

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the Australian financial services industry.

The Australian Securities and Investments Commission (ASIC) enforces financial services and corporation laws.

 

What are some examples of co-operation between government agencies?

 

Project Wickenby

Project Wickenby was the first multi-agency task force legislated to enable confidential tax information to be shared for the purposes of the task force. This integrated joint agency approach delivered unprecedented results and has helped to establish a “template” for other task forces in Australia. Subsequently, further task forces have been established using a similar model to Wickenby, to tackle the organised crime threat, including the National Criminal Intelligence Fusion Centre Taskforce and Criminal Assets Confiscation Taskforce.

 

Criminal Assets Confiscation Taskforce

The Criminal Assets Confiscation Taskforce (CACT) is a multi-agency task force led by the AFP and includes the ACIC and the ATO. CACT is focussed on removing the proceeds and instruments of crime. Through its operations, it supports the key capabilities identified in the Commonwealth Organised Crime Strategic Framework, in particular targeting the criminal economy, and promoting a focus on intelligence, information sharing and interoperability. ACIC also refers appropriate matters to the ATO for taxation treatment.

 

Serious Financial Crimes Taskforce

The Serious Financial Crime Taskforce (Taskforce) is a multi-agency taskforce that forms part of the Fraud and Anti-Corruption Centre, which is led by the AFP. Offences targeted by the Taskforce relate to serious fraud, money laundering and defrauding the Commonwealth. The current priorities include criminality related to international tax evasion, fraudulent phoenix activity, trusts and superannuation.

 

Fintel Alliance

Established by AUSTRAC, the Fintel Alliance innovatively partners industry and government agencies in the fight against terrorism financing and organised crime. Partners include AUSTRAC, AFP, NSW Police, ATO, National Australia Bank, Commonwealth Bank, ANZ Bank, National Australia Bank, Westpac Banking Corporation, Western Union and PayPal.

The operational goals of the Fintel Alliance are:

  • Help private sector partners more easily identify and report suspicious transactions
  • Help law enforcement partners more quickly arrest and prosecute criminals, and
  • Work with academia to build knowledge and gather insight

 

Trust Taskforce

In the 2013-14 Budget, the government announced it would provide AUD 67.9 million over four years for targeted compliance action against people who have been involved in tax avoidance or evasion using trusts. The taskforce targeted known tax scheme promoters, individuals and businesses who participated in such arrangements. It also identified and dealt with abusive use of trusts using the ATO’s intelligence systems and the analysis of tax returns. In the most serious cases, criminal sanctions were pursued in collaboration with law enforcement authorities through the Serious Financial Crime Taskforce, and in collaboration with overseas authorities. From 1 July 2017, this work continued under the operational umbrella of the Tax Avoidance Taskforce.

 

Tax Avoidance Taskforce

The Australian Government has established the Tax Avoidance Taskforce within the Australian Taxation Office, enhancing and extending the current compliance programmes targeting multinationals, large public and private groups operating in Australia, as well as high wealth individuals. Under the taskforce, the ATO has been given additional funding to increase its audit and investigation teams dedicated to addressing international tax risks and focusing on private groups and high wealth Australians, including trusts and promoters.

 

Phoenix Taskforce

The Phoenix Taskforce comprises over 20 Federal, State and Territory government agencies, including the ATO, ASIC, Department of Employment, and the Fair Work Ombudsman. The Phoenix Taskforce provides a whole-of-government approach to combating illegal phoenix activity (where a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts).

 

Conclusion

In order to effectively combat financial crime, a whole-of-government approach is required with effective collaboration between various agencies at the different stages of the process.

 

 

Nyman Gibson Miralis specialise in all aspects of white collar crime law, including laws concerning serious financial crime, money laundering, fraud, tax offences and bribery of foreign public officials. If you require assistance, contact one of our expert criminal defence lawyers.