Organised crime case studies

What is organised crime

Organised crime can involve a range of criminal activities including:

• illicit drug activity
• tax or other fraud
• identity or cybercrime
• money laundering
• crimes against people (such as human trafficking).

While it often takes place behind closed doors, organised crime poses a national threat to Australia and a direct threat to our community. It costs Australia up to $60 billion each yearExternal Link.

Under the Commonwealth Organised Crime Strategic Framework, we have a shared responsibility to address the impact of serious and organised crime.

Our case studies show how, with the help of our cross-agency partners, we are effectively dealing with organised crime.

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Teeth whitening kits, French Bulldogs and gifts

In June 2018, the Queensland Police Service (QPS) intercepted a vehicle with $235,000 of concealed cash in 2 packages. The driver of the vehicle claimed that the funds were from:

• the sale of teeth whitening kits at local markets
• the sale of French Bulldogs on Facebook
• a gift from the driver’s mother.

As the large amount of cash was deemed suspicious, the QPS referred the matter to the ATO, who started an audit. The markets had no record of the man, the sale of the dogs was conducted by his father on a different Facebook account and the man only kept monetary gifts at his residence, rather than concealing them in his vehicle. The ATO also reviewed the man’s financial statements and identified numerous unexplained cash deposits.

The audit also revealed the man’s 2018–19 tax return was outstanding and so the ATO issued a default assessment to the man. The ATO issued a garnishee notice and collected the total amount payable, $148,960 from the QPS. The ATO’s message is clear to those who evade or cheat the tax system: there is no place to hide. Australia will not tolerate this behaviour.

More than $75,000 collected from suspected drug trafficker

In November 2018, the Queensland Police Service (QPS) executed a drug premises search warrant at a property in Ipswich, Queensland. The male person of interest was alleged to have been involved in drug trafficking and had criminal links to outlaw motorcycle gang members.

The ATO conducted an audit of the suspected drug trafficker, who had not lodged a tax return since 2004. The audit found the man had failed to report his income and had instead been claiming a disability pension since 2012, receiving a pension of $20,000 in 2018. The man had a 2013 Toyota Hilux dual cab ute registered in his name and 2 trailers, which didn’t correspond with his pension. He was also suspected of owning 2 Harley Davidson motorcycles, but these were not registered in his name.

The ATO issued assessments to the man for the period from 2013 to 2019, estimating his total undisclosed income tax amount to be $78,996.03. A garnishee notice was issued and $76,497.90 was collected in May 2019.

The ATO works with partner agencies, such as the QPS, to deter, detect, disrupt and deal with tax crime.

Almost $750,000 seized from drug dealer

In 2018, the ATO received a referral from a law enforcement agency and started an audit of a male person of interest for failing to report his income. The man had not lodged a tax return for over 20 years, despite allegedly running numerous small businesses and earning income. He was also involved in selling illicit drugs for cash.

The man used the earnings from the illegal activities to fund his extravagant lifestyle. He neglected his tax obligations and in doing so deprived the community of funds that could have been used for essential services.

The Commissioner issued assessments for the 2013 to 2016 income years and the total amount payable was $1.8 million.

In 2016, the New South Wales Police issued a search warrant on the man and seized $748,775 thought to be the proceeds of his illicit activity. The ATO issued a garnishee notice to collect part of the outstanding debt and $748,775 was applied against it.

Organised crime is estimated to cost the community up to $47 billion each year. These criminal activities – which may involve drug dealing, firearms and money laundering – cause extensive harm to our communities.

By removing cash from organised criminals such as this man, the ATO is helping disrupt organised crime and putting money back into the Australian economy where it belongs.

Illegal alcohol is a whiskey business

Although beer and wine can be made legally at home for personal consumption, a licence is required to make spirits, even if they are intended for personal use.

On 10 April 2019, the ATO executed search warrants at an address in Riverglades, South Australia, and exposed an illegal alcohol operation.

The operation is alleged to have involved the manufacture and sale of illicit alcohol from the premises for approximately 4 to 5 years.

Following information provided to Crime Stoppers, the ATO worked with the South Australian Police Licencing Enforcement Branch to uncover equipment and ingredients used in the manufacturing of illicit alcohol along with 21 bottles of suspected illicit alcohol.

Illicit alcohol is extremely dangerous to consume due to the volatility of the distillation process. Spirits brewed illegally at home may cause blindness, brain damage or death from methanol poisoning. Methanol is a harmful compound that has been significantly reduced or removed entirely from commercially produced alcohol.

The outcome of this case shows the important role the wider public plays in helping to sink the illegal alcohol trade.

Watch:

Slamming the brakes on organised crime

In May 2017, as part of an Australia-wide week of action, the ATO worked with state and federal police to target a number of bikie gang members for tax evasion.

The ATO served lodgment demand notices, debt collection notices and court attendance notices to approximately 200 outlaw motorcycle gang (OMCG) members. The tax records of associated professional enablers, namely lawyers and accountants, were also scrutinised.

This effort was part of Operation Morpheus – a joint-agency taskforce that falls under the AFP-led National Anti-Gangs Squad (NAGS). The objective of the taskforce is to disrupt individuals who may be deriving wealth from serious and organised criminal activities.

Throughout the 2015–16 financial year, 688 taxpayers were targeted under Operation Morpheus. This resulted in $5.9 million collected and 25 people prosecuted for non-lodgment.

While the majority of taxpayers do the right thing, those who choose to engage in illegal activity can expect to face the full force of the law.

For more information see:

• Organised crime