29 March 2018

Serious financial crime taskforce smashes Australia’s biggest ever tax fraud


Joint media release with
The Hon. Angus Taylor MP
Minister for Law Enforcement and Cyber Security

Australia's biggest tax fraud was brought to an end today following the hard work of the Turnbull Government's Serious Financial Crime Taskforce (SFCT).

The Supreme Court of NSW sentenced Michael Issakidis to 10 years and 3 months jail, with a non-parole period of 7 years and 6 months, for his involvement in the largest ever successfully prosecuted tax fraud case in Australia's history. He and co-conspirator Anthony Dickson deliberately absorbed $450 million of otherwise assessable income through falsely created losses in order to evade $135 million in tax through the use of tax havens and complex international trust structures.

Today's result follows the landmark sentencing of co-accused Dickson who in 2015 was sentenced to 11 years' jail, which was later increased to 14 years on appeal. Dickson's sentence marked the longest jail sentence ever handed down for tax fraud and money-laundering.

Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, said the significant penalties handed down to both Issakidis and Dickson demonstrate the success and important work of the SFCT.

"This was the largest and one of the most complex investigations into tax fraud in Australia's history," Minister O'Dwyer said.

"The Turnbull Government's Serious Financial Crime Taskforce brings together the intelligence, capacity and capability of our regulators and law enforcement agencies to identify and combat serious financial crime.

"The sheer size of the fraud and significant penalties imposed by the judge shows that this type of behaviour will not be tolerated, and the SFCT will bring those involved in such activities to justice.

"The Turnbull Government is committed to ensuring the integrity of Australia's tax systems by bringing to justice those that deliberately defraud the Commonwealth."

Both Issakidis and Dickson, as directors of NeuMedix Health Australasia Pty Ltd, were found to have participated in a scheme from 2007 to 2010 to fraudulently claim depreciation expenses relating to offshore purchases of intellectual property and dealing in the proceeds of crime. NeuMedix purportedly acquired the intellectual property from a Cayman Islands company, partly funded by a Samoan financier, and valued by an ostensible international valuer. The court found all of these entities were set up and controlled by Dickson and Issakidis.

The pair created a web of false identities to aid their deception and siphoned money through the UK, Hong Kong and the UAE via fake domestic and international companies to fund their lavish lifestyles, netting themselves approximately $63 million. The AFP-led Criminal Assets Confiscation Taskforce restrained approximately $55 million in assets from the pair under Commonwealth Proceeds of Crime Legislation, including property, a number of Rolls Royces, a Lamborghini, an Aston Martin, a Mercedes, a BMW and yachts.

Minister for Law Enforcement and Cybersecurity, the Hon Angus Taylor MP, said the investigation demonstrated the importance of the collaboration of the SFCT, particularly between the lead agencies the Australian Tax Office, the Australian Federal Police, and Commonwealth Director of Public Prosecutions.

"The success of this operation to bring Issakidis and Dickson to justice is a testament to the power of the combined specialist agencies," Minister Taylor said.

"The increasing sophistication of financial crime means we need to be more sophisticated and global in the way we dismantle these individuals and their networks.

"Those who seek to exploit public funds for their private gains should be warned that the AFP and its partners in the Serious Financial Crime Taskforce will discover your crimes and shut you down."

Since the establishment of the SFCT in 2015, 740 reviews and audits have been completed, and liabilities have been raised in excess of $562 million. Five people (including Issakidis and Dickson) have received custodial sentences following prosecution and there are currently 30 criminal, civil and intelligence matters in progress.

Agencies forming the SFCT include the ATO, AFP, CDPP, Australian Criminal Intelligence Commission, Attorney-General's Department, Australian Transaction Reports and Analysis Centre (AUSTRAC), Australian Securities and Investments Commission and Australian Border Force.