Tax officers and federal police have raided a dozen locations across Australia in the past three days as part of an investigation into a billion-dollar tax scam that has gone viral on social media.
The number of people participating in the fraud has grown rapidly. When Operation Protego was launched early last month, the Australian Taxation Office (ATO) said it was investigating $850m in payments to 40,000 people.
The number of people involved now is about 70,000 and the ATO claims it has stopped a further $1.1bn in attempted fraudulent refunds. The fraud has occurred using a method spread on Facebook and TikTok.
Six people were arrested in May on suspicion of GST fraud. The raids this week targeted 19 people at locations in New South Wales, Victoria, Tasmania, South Australia, Western Australia and Queensland.
Will Day, an ATO deputy commissioner and chair of the taskforce, said the huge number of people attempting to use the same method was unusual. He urged anyone who may have participated to come forward rather than wait to be caught.
“It is completely unique, in my extensive experience in dealing with tax crime, that we could have such a large number,” he said.
Participants risk jail by attempting the fraud, which involves applying for an Australian business number and submitting a business activity statement to the ATO seeking a refund of goods and services tax that was never paid.
On average, participants in the fraudulent scheme claim a refund of about $20,000.
“You can be looking at jail for one to two years quite easily – and more, depending on the amount,” Day said.
He said the ATO had been working with social media platforms in an attempt to remove content promoting the fraud.
“Certainly the use of social media to spruik it, but also to just share approaches, is pretty scary,” he said. “That’s why we’ve been taking such strong action and working so closely with the social media platforms.”
Social media content promoting the fraud included people sharing images of their business activity statements, “and otherwise just trying to … celebrate their attempted fraud”, Day said.
He said the production values of content promoting the fraud could be low.
“That’s probably one of the warnings – it’s not always the greatest production values or the most professional looking,” he said.
He said that on TikTok, content included “videos of people showing either a lot of cash … or racing around in a car”.
Related content the ATO is concerned about includes advertisements promoting loans from the ATO and asking people to provide details of their myGov logins. The ATO does not give out loans and has urged people not to share their login details online.
“We’ve had a range of intelligence from both banks and financial institutions and our own sophisticated risk models that really started to see an increase in these sorts of fraudulent claims earlier this calendar year,” Day said.
“As we saw that rapidly grow over those months, that’s why we went out just over a month ago with that warning to the community and put in a lot of additional steps in order to prevent those claims being made into the future.”
The investigation is unusual because it does not involve the sophisticated actors such as organised criminals who the taskforce usually investigates. Instead, the specialist investigators are involved due to the sheer scale of the attempts to make fraudulent claims.
Day said criminal investigations were ongoing and at the same time the ATO would audit the affairs of those it suspected were engaging in the fraud.
“Then we’ll start to turn our intelligence and our criminal investigation efforts towards those who might be facilitating some of this spruiking of these false, fraudulent ATO loans and so on,” he said.
