Small business owners caught in tax raids

Small business owners and corporate high flyers have been caught up in a $100 million tax evasion and money laundering scheme based in Vanuatu.

After a series of raids across New Zealand, Australia and Vanuatu, the Australian Federal Police arrested the alleged mastermind behind the scheme, Robert Agius, in Perth. Agius is the principal partner of accounting firm PKF Vanuatu. Agius has been charged with two counts of conspiracy to defraud the Commonwealth and one count of money laundering.

The AFP, which has been running the Project Wickenby investigations into offshore tax rorts for more than three years, alleges more than 400 clients have used the scheme promoted by Agius and has identified more then $57 million of assets associated with the scheme. Some of these assets have been frozen.

AFP commander Warren Gray expects to make more arrests in the coming weeks. “We are talking about professionals, quite well-known people; people at the top echelons of business right through to small business operators who wanted to hide money.” Gray says investigators are concentrating their efforts on the top end of town.

Peter Bembrick, a tax partner from HLB Mann Judd, says the message for small business operators and managers from yesterday’s raids is obvious; tread very carefully around offshore tax schemes. “We’re generally wary of that sort of thing – particularly in this climate,” Brembrick says. “Quite apart from things being hidden or non-disclosure, there are a number of rules that people need to be aware of when investing overseas.”

These rules tend to be different from country to country, so plenty of very careful research is needed if you want to invest offshore. Indeed, the amount of research and professional advice needed may outweigh the benefits.

And if you already in an offshore tax scheme, and fretting, it’s time to get some help. “Tread carefully when you are looking to unwind the scheme and get your money out,” Bembrick says. Whatever you do, non-disclosure is not an option. “If you’ve got a problem, deal with it.”