Criminal charges relating to Panama Papers could take years: ATO
Criminal charges against Australians with links to the Panama Papers could take years to eventuate, ATO deputy commissioner Mark Konza says.
The Australian Taxation Office earlier this month revealed that its serious financial crime taskforce, which also involves the Australian Federal Police and AUSTRAC, had executed search warrants and unannounced visits across properties in Victoria and Queensland for allegedly serious offences including money laundering and other criminal activity.
All up 1000 entities, involving hundreds of taxpayers – many of which include high-wealth individuals and their lawyers and accountants – are under investigation by the Australian Taxation Office.
The raids followed AUSTRAC identifying suspicious cross-border movement of funds between Australia and other countries amounting to $2.5 billion linked to more than 1000 Australian entities.
"To give an order of magnitude, e-commerce cases relate to about $1 billion," ATO deputy commissioner Mark Konza said. Credit:Sahlan Hayes
The entities, listed in secret documents belonging to Panama-based law firm Mossack Fonseca, were leaked to the International Consortium of Investigative Journalists in April, and part of the material was shared on its website.
Mr Konza said cases take time to build – and prosecutions are even further apart – as was demonstrated by old cases dealt with under the former Project Wickenby program.
Project Wickenby, which was established in 2006 and lasted almost a decade, resulted in $2 billion in tax liabilities and 47 prosecutions.
"These things take some time," Mr Konza said. "The experience of the Wickenby Project was there was a long time of careful investigation and case building."
More than 11 million files leaked from the world's fourth biggest offshore law firm, Mossack Fonseca, referred to as the Panama Papers, indicate secret offshore dealings from world leaders and celebrities.
He said during the time of the Wickenby investigations there were many doubters who did not believe the ATO would be able to deliver successful convictions.
"But [about] 50 people are now in jail because of the Wickenby Project," he said. "These are things where some patience is required."
Mr Konza said authorities had to also be fair to the people who are being investigated and make sure the job was done properly.
The ATO had in April revealed it had identified over 800 individual taxpayers in the Panama Papers, many of which had curious structures set up in Hong Kong.
Since then more than 100 taxpayers had been contacted and told they would be the subject of compliance action.
Further criminal investigations and prosecutions could follow.
Tax Commissioner Chris Jordan has said not all Australians named in the Panama Papers are criminals.
Prime Minister Malcolm Turnbull was one of the people named in the papers, but there was no evidence of wrongdoing.
Mr Jordan has said that offshore structures and trusts do have a genuine purpose for many individuals and corporations.
But the ATO was chasing after structures being used to "evade tax, avoid corporate responsibility, disguise and hide unexplained wealth, facilitate criminal activity and launder the proceeds of crime".
The Panama Papers links are not the only matter being investigated by the serious financial crime taskforce.
It has to date conducted more than 300 audits, raised $130 million in liabilities and made four prosecutions.
Deputy Editor, BusinessDay. Reporting on tax and regulation.
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