(THEME MUSIC PLAYS)
PAUL FARRELL: Inside a well-known Sydney strip club
PAUL FARRELL: a plan is about to be hatched.
SONG: # Oh, na, na, na
# Oh, na, na, na
Oh, na, na, na
# I got the rock # I got the rock
# I got the sauce # I got that sauce
# I got that drip... #
CLINTON FREE: It starts with a meeting of five men
at Men's Gallery, a strip joint in Pitt Street in Sydney.
# Stayin' lit # Stayin' lit
# Yeah, till I drop # Drop, drop... #
# Yeah, till I drop They're plotting a new business
that's going to make them They're plotting a new business
that's going to make them more than $100 million.
That business is a scam to rip off the Australian Taxation Office.
They name it after the Greek god of wealth, Plutus.
There were Porsches, there were BMWs, there was an aircraft.
This was a massive amount of money flowing around.
Plutus will become the biggest tax fraud in Australia's history.
It's easy to say ripping off the tax system,
but they're ripping off everyday Australians.
With 28,000 pages of evidence
and 70 hours of police surveillance recordings
never before heard outside a courtroom,
Four Corners brings you the story of how they did it...
..and how it was brought down.
SONG: # Shake that Shake that ass for some paper
# For some paper, paper
# Make that, make that cash... #
It's 2014 and it's lunchtime at the Men's Gallery.
# I'm gonna get that bag either way... #
From the outset their intent is clear.
One of the men hands out new phones they'll use to cover their tracks.
JOHN COYNE: So, phones that are not linked to them,
JOHN COYNE: So, phones with all new numbers.
It's an old form with all new numbers.
It's an old form of trying to evade detection.
It really goes to the heart of their criminal enterprise.
It shows that they most definitely It really goes to the heart of their criminal enterprise.
It shows that they most definitely
knew that they were going to
undertake a criminal activity.
This man is Adam Cranston,
a 27-year-old corporate player
experienced a 27-year-old corporate player
experienced in cleaning up broken businesses.
He also has a love of fast cars and a surprising family connection.
So, Adam Cranston was raised in the Sutherland Shire
So, Adam Cranston was raised in a fairly privileged family.
And then entered the work force
working as a consultant to insolvent companies.
Notably, he was the son of Michael Cranston,
the Deputy Commissioner of the ATO.
Also present at the meeting that day is Jay Onley,
a former pro snowboarder
and a risk-taker who's an expert in business turnaround.
Then there's Simon Anquetil,
an entrepreneur who brings the building blocks of the scheme.
And IT recruiter Josh Kitson,
who will soon be installed as the front man,
the company's general manager.
Simon Anquetil is a tech entrepreneur
and someone who was deeply interested in startups.
He was previously the managing director of a company
He was previously that had gone into liquidation,
and it appears a strong patron that had gone into liquidation,
and it appears a strong patron of gentleman's clubs.
Josh Kitson was one of Simon Anquetil's best friends
and he was very effective in recruiting clients into the business
and he was very effective in and was effectively running it.
Their plan is to set up a payroll company
that processes wages on behalf of other businesses.
They'll rake in clients' money,
but instead of paying the tax they owe to the government
they'll just keep it.
The Men's Gallery meeting ends
and, afterwards, Anquetil and Kitson exchange a flurry of texts.
It's the bare bones of a scheme
that will soon morph into something much bigger.
So, Plutus was itself set up to be a squeaky-clean company.
So, Plutus was itself set up Its employees weren't aware
of what was going on underneath the business,
and it certainly was operating
for all intents and purposes in a legitimate way.
They set up shop in the elite harbourside suburb of Double Bay.
Plutus Payroll aggressively targets big corporate and government clients
that contract Plutus to manage their staff's wages.
Plutus billed itself
as Australia's only zero-fee outsourced payroll service.
So, it really undercut the market quite heavily
and it was quite successful in its little niche around IT contractors.
Within a year the syndicate steals more than $4 million.
This is how the scam works -
Plutus processes the gross wages This is how the scam works -
Plutus processes the gross wages from legitimate clients
Plutus processes the gross wages through a layer of companies
that sit beneath it.
On paper they appear to be run that sit beneath it.
On paper they appear to be run by a series of front people,
On paper they appear to be run or dummy directors,
but in reality the syndicate is in control.
While these second-tier companies do pay wages,
they only pay a small portion of the tax they owe.
The syndicate steals the rest of the money.
Periodically they dump these companies, dodging the tax debts,
Periodically they dump these and start again with new companies.
MICHAEL HAYTER: Australian Taxation Office
takes a number of months or sometimes years
to catch onto the fact that the tax hasn't been paid,
to catch onto the fact so, they have some breathing space.
So, they used that breathing space to take the monies so, they have some breathing space.
So, they used that breathing space to take the monies
which the Australian Taxation Office would've been entitled
and redirect them into various other companies.
So, by the time the Australian Taxation Office
So, by the time chases them for the monies,
the monies have already gone,
and then they've moved on to another company
and then they've moved on to implement the same scheme.
And they started just moving these amounts of money to implement the same scheme.
And they started just moving these amounts of money
And they started in broken-up amounts
into these different companies
and then into various bank accounts.
And it just kept going through this really complex path
of going from company to bank account to company
and then eventually back into the bank accounts
and then eventually of the people involved.
Simon Anquetil has experience running a scheme very similar to this
on a much smaller scale.
MICHAEL HAYTER: on a much smaller scale.
MICHAEL HAYTER: These people don't overnight
decide to do a hundred-million-dollar fraud.
Their conduct prior to that is on the dark side.
And Simon Anquetil was on the dark side?
He was on the dark side, yeah. Yeah, yeah.
Lawyer Michael Hayter examined Anquetil
Lawyer Michael Hayter over suspected credit card fraud
during liquidation proceedings over suspected credit card fraud
during liquidation proceedings in 2012.
A small company called eStrategy Group had gone bust,
owing more than $100,000 in tax to the ATO.
He would use these credit cards
to go to the strip clubs for so-called business expenses.
to go to the strip clubs When I cross examined him about it
he said he was taking prospective When I cross examined him about it
he said he was taking prospective clients to those strip clubs.
Sometimes he was spending $8,000 to $12,000 a day at those strip clubs
and sometimes on consecutive days.
That doesn't sound like a legitimate business expense.
(LAUGHS) No. No, it doesn't. It doesn't. And it's not.
Liquidator Bruce Gleeson
believes Anquetil had installed a dummy director at eStrategy Group
and was the true mastermind of the company.
Gleeson submitted a report to the corporate regulator, ASIC,
but no further action was taken.
The difficulty always is that,
when something like eStrategy happens The difficulty always is that,
when something like eStrategy happens
and then they can see that the consequence is not...
..significant,
then it's...it's...
..particularly to unscrupulous business operators,
there's then the ability for them to say,
there's then the ability "How can we take advantage of this?"
I think what we've seen, regrettably, in the Plutus matter
is that ...
..almost you could say
eStrategy Group was a trial run for a bigger event,
eStrategy Group was a trial run and a much bigger event at that.
If the punishment for getting caught and a much bigger event at that.
If the punishment for getting caught
isn't significant,
they get a feeling, a sense of ego
that, "OK, I've learned
"from this experience.
"Next time I do this I'm going to be better at it."
As their confidence grows
so does the Plutus scheme.
By the end of 2015
Adam Cranston and his business partners
are living large and spending big.
There were Porsches, there were BMWs, there was an aircraft.
Some of it just went into their bank accounts,
Some of it padded their bank accounts.
Real estate. padded their bank accounts.
Real estate. Real estate was a big one.
Flashy assets - cars, planes, houses.
Flashy assets - He was living far beyond his means,
and that is a very common indicator
that somebody is involved in something that is illicit, illegal.
By May 2016 they've embezzled almost $50 million from the Tax Office.
And all that cash begins to attract attention.
JOHN COYNE: In many cases
people who have successful JOHN COYNE: In many cases
people who have successful criminal enterprises
can't help themselves but share that information with others.
And over time there's a degree of arrogance with that.
And once that knowledge gets out there
it spreads relatively quickly.
At this point the AFP, acting on a tip-off,
launches a large-scale covert surveillance operation
involving up to 20 police investigators.
This is one of their early recorded phone conversations.
(PHONE LINE RINGS) This is one of their early recorded phone conversations.
(PHONE LINE RINGS)
It's October, just after Adam Cranston's wedding,
and he has no idea the police are listening to every word.
RECORDING: Yeah, no, it was good. That was epic. And it was Jay...
By now the syndicate has pocketed around $70 million in unpaid tax,
and the conversation reveals that there is much more going on.
It's one of more than 450 recordings
later used as evidence against them in court.
RECORDING: My thoughts are we keep what he does external for this...
JOHN COYNE: Look, they must have had something very, very significant
in terms of initiating the investigation
and through the quick assessment process
in order to get telephone intercepts so early in the process
in order to get telephone intercepts or so early in the investigation.
So, it sends a clear message
that, from the very start,
the officers involved, the investigators and AFP,
corporately saw that this investigation
corporately saw had significant dimensions to it.
Now, at that time, it could be significant
in terms of the linkages it has to other organised crime,
in terms of the linkages the amount of money involved,
the sophistication of the operation.
By November 2016
Adam has bought himself By November 2016
Adam has bought himself a new holiday house
and a third car, his second Porsche.
The business is humming along,
but beneath the surface tensions are brewing.
Jay Onley feels like he isn't getting a decent cut of the cash.
In late November Adam and Jay put on an event
at this exclusive private racetrack on the New South Wales Central Coast
with associates of one of their companies, Synep.
(ENGINE WHIZZES)
(ENGINES ROAR)
(INDISTINCT CHATTER)
Any final words, (INDISTINCT CHATTER)
Any final words, in the passenger seat?
No. Good luck.
I got my lap dance. (LAUGHS)
(LAUGHTER) Now squat!
(LAUGHTER) (LAUGHTER)
Oh, no.
Argh!
(SCREAMS)
Adam recounts a conversation with an acquaintance,
who clocks their lavish spending.
Unexplained wealth
is when people, essentially, Unexplained wealth
is when people, essentially, are living beyond their means.
So, someone working for a payroll company is when people, essentially, are living beyond their means.
So, someone working for a payroll company
So, someone probably isn't making, you know,
$100 million a year
and able to buy things like multi-million-dollar homes
and fancy vehicles and aeroplanes and boats.
So, to break down the word, it IS unexplained wealth -
"Where did this money come from? How did this person get the money?"
To keep the scam going
they're relying on a network of professional facilitators.
The court will ultimately hear
the syndicate used so-called 'friendly liquidators'
the syndicate used to keep the scheme under the radar.
Liquidators have a very significant position of trust in the economy.
Their role is quasi-judicial in some ways
and they are empowered to make very significant decisions.
and they are empowered So, for example, they can decide
whether or not a debt is legitimate or not.
A friendly liquidator, in their description,
is somebody who will either look the other way
or facilitate the process that goes on.
If either of those things are occurring,
it should be pretty evident to the regulator what's actually happening.
This is all about vulnerabilities. it should be pretty evident to the regulator what's actually happening.
This is all about vulnerabilities.
It's about criminal groups This is all about vulnerabilities.
It's about criminal groups trying to exploit
real and what they perceive as vulnerabilities in the systems
to make money and to avoid detection.
Police will later intercept a meeting
where Menon, Onley and Adam Cranston
are discussing the liquidation
of another of their associated companies.
The conversation turns to how they will pay the liquidator.
If there's cash payments being given to a dodgy liquidator,
that's about as egregious as it gets in this profession.
that's about as egregious They certainly shouldn't be allowed
to continue operating in this marketplace.
And it defies explanation in my mind
as to how that person hasn't been tracked down and held to account.
John Winter runs Australia's peak body for insolvency experts,
and believes the corporate regulator, ASIC, hasn't looked hard enough
at the liquidation of Plutus Payroll's second-tier companies.
The evidence has been given
that there were friendly liquidators The evidence has been given
that there were friendly liquidators attached to it.
that there were friendly liquidators It's not that hard for the regulator
to line up who was doing the work
and start a proper investigation to line up who was doing the work
and start a proper investigation into those.
We've seen no evidence of that happening.
ASIC told Four Corners
that it engaged with and assisted the AFP with its investigation.
It did not answer our specific questions
about friendly liquidators linked to the scam,
but conceded that it can only undertake a fraction
of the potential regulatory and enforcement action it identifies.
Police know they need to gather more evidence.
They need more than just phone intercepts.
To capture the inner workings of the operation
they need to bug their offices.
So, putting a listening device inside a car, inside a house,
inside a public place, as an example,
inside a public place, are incredibly difficult activities
with high risk, are incredibly difficult activities
with high risk, high likelihood of detection.
At any stage, so, had those listening devices
At any stage, been detected at an early stage
it could have imperilled been detected at an early stage
it could have imperilled the investigation itself.
An AFP team covertly installs a secret camera
in Plutus Payroll's back office in the South Sydney suburb of Miranda.
Now they have a totally new perspective of Plutus's operations.
Working the back office is Lauren Cranston, Adam's sister.
CLINTON FREE: Lauren Cranston's involvement in the Plutus tax fraud
CLINTON FREE: Lauren Cranston's really was an artefact
of the fact that she was the sister of Adam Cranston.
She'd been really brought in of the fact that she was the sister of Adam Cranston.
She'd been really brought in
on the basis that Adam was right at the heart of this.
on the basis that Adam Her role in this
was organising a lot of the transactions
which occurred around the second-tier organisations.
Federal agents are watching on here in January 2017
to piece together how this group is moving money around.
They've now taken almost $100 million.
Soon cracks start to emerge.
They underestimate one of their dummy directors,
who goes rogue and starts withdrawing cash from some of the accounts.
The woman takes out $25,000 in two days,
The woman takes out $25,000 and they fear she'll take more.
The dummy directors recruited by the syndicate in return for cash payments
are, by design, drug-dependent and destitute people.
They have little to no understanding of the scheme, and no assets.
It's an appallingly criminal act.
These people have been exploited,
selected purely on the basis These people have been exploited,
selected purely on the basis that they were vulnerable
selected purely on the basis and in need of money and desperate.
And they had no knowledge of what they were signing themselves up to.
And they represented easy fall guys for the conspirators.
That's a common tactic these fraudsters use. And they represented easy fall guys for the conspirators.
That's a common tactic these fraudsters use.
They destroy the company records,
they put someone in who's a target, who has no assets.
A liquidator comes in, there's no funds.
The liquidator will then ask
the Australian Taxation Office for funds, or ASIC,
the Australian Taxation Office won't get the funds
and is left with their hands tied won't get the funds
and is left with their hands tied as to what action they can take.
One of the men they rely on
to do the dirty work of recruiting dummy, or straw, directors
is Daniel Rostankovski, also known as 'Big D'.
He's known by the conspirators as an associate of the Comancheros.
So, Daniel Rostankovski is, I guess, a known standover figure,
who was involved in the recruitment of a lot of the straw directors
who ran that second set of second-tier companies
which were involved in the fraud.
(INDISTINCT CHATTER)
In the heart of Sydney
Big D has just walked into the office of the syndicate's lawyer, Dev Menon.
They think they can speak freely here,
but Menon's office has now also been bugged by the AFP
with three separate listening devices.
Dev Menon's role in this became increasingly important.
He was advising a lot of the actors in the fraud
about the way in which their organisation could be structured
about the way in which their to best avoid being detected.
MICHAEL HAYTER: to best avoid being detected.
MICHAEL HAYTER: Well, lawyers are seen
as being required to have a higher duty and obligations
as being required to have in their conduct.
They're officers of the court.
So, to have an officer of the court
involved in this sort So, to have an officer of the court
involved in this sort of a criminal activity
involved in this sort in some cases is even much worse
than having the average Joe Blow who's a criminal
involved in this sort of activity.
The ATO has been sending letters to some of the dummy directors,
The ATO has been sending letters demanding they pay back
the tax owed by the companies they're supposedly running.
the tax owed by the companies So far they've been eluding them.
Onley, Menon and Adam Cranston
start talking about covertly paying the directors off
to ensure that they stick to the story.
They consider paying off one particular dummy director
They consider paying off and strategise with Big D
that the man should leave town and strategise with Big D
that the man should leave town to avoid questioning.
They would've thought
that they were pretty crafty, that they were pretty smart,
that they were getting away with it for quite a long time,
when in reality they were being investigated for quite a long time
in order to bring about a really strong case against them.
Now the ATO raises the stakes,
freezing their accounts
to stop the flow of money from the second-tier companies.
Plutus is still safe for now,
but it's a severe blow to their operations.
but it's a severe blow Lauren Cranston calls Dev Menon.
(PHONE LINE RINGS)
With the accounts frozen
they can't pay wages to any of their clients.
they can't pay wages Menon immediately calls Big D.
Menon tells him they need to find a dummy director
Menon tells him to try to unlock the accounts.
Dev Menon is wrong.
It IS the ATO
using what's known as a 'garnishee order'
to directly intervene, seizing the money owed to it.
(PHONE LINE RINGS) to directly intervene, seizing the money owed to it.
(PHONE LINE RINGS)
Federal agents listening in continue to build the case against them.
Federal agents listening in continue In this casual exchange
they capture a brazen admission that the scheme is ripping people off.
Adam Cranston, Dev Menon and Simon Anquetil are in denial.
They're clinging to a belief they can keep Plutus going.
In an attempt to throw the ATO off
they plan to pay just a little more tax.
It's just the arrogance.
You sort of sit there and you listen to that and you go, you know,
"These people are proud of what they're doing."
It's easy to say ripping off the tax system,
but they're ripping off everyday Australians
but they're ripping off with significant amounts of money,
and they're showing an intent to go bigger, go harder in doing so.
Panic sets in and now they're trying desperately to cover their tracks.
Lauren Cranston can be seen here
bundling laptops and documents Lauren Cranston can be seen here
bundling laptops and documents into a bag
to destroy evidence that could incriminate them.
to destroy evidence That needs to go.
The court later heard that Adam Cranston was present
as they lit a bonfire in a skip bin to destroy paperwork.
as they lit a bonfire in a skip bin It also heard there were discussions
about which laptops "needed to go for a swim."
As they try to mount their defences against the ATO,
internally the syndicate is at breaking point.
So, I think it's the case
that if you and I had a profitable company
we'd soon start to receive phone calls
we'd soon from big venture-capital companies.
If we're running a criminal enterprise,
we also get the phone calls,
but those phone calls would be
from the Comancheros but those phone calls would be
from the Comancheros or the Hell's Angels.
Their business partner Big D turns on them
Their business partner Big D with a chilling blackmail demand.
First he threatens violence from the Comancheros,
then he threatens to expose them. from the Comancheros,
then he threatens to expose them.
Big D calls one of his dummy directors...
..who claims he's outside
the Australian Federal Police headquarters
the Australian Federal Police poised to upend the entire scheme.
With the upper hand against his former allies,
Big D demands they pay $5 million in exchange for silence.
Big D later ups the figure to $25 million.
Within three months they've paid it in full.
JOHN COYNE: No honour among thieves.
We really have to avoid feeling any form of sympathy for these people. JOHN COYNE: No honour among thieves.
We really have to avoid feeling any form of sympathy for these people.
They undertook a sophisticated criminal operation,
set it up, gloated about it, manipulated people,
and, so, when they were discovered by other criminal groups,
in some ways they got their just desserts.
Now threats are coming at them from all sides.
A business associate extorts Jay for more money.
On 26 April 2017
the moment the architects of the Plutus Payroll scheme have dreaded
finally arrives.
Investigators are ready to take down the syndicate.
The ATO freezes all the bank accounts operated by Plutus Payroll,
bringing the entire scheme to a shuddering halt.
In a final act of desperation
Adam picks up the phone and calls his father,
Adam picks up the phone a Deputy Commissioner of the ATO,
Michael Cranston.
(PHONE LINE RINGS) Michael Cranston.
(PHONE LINE RINGS)
Recordings of this call would later be used as evidence in Adam's trial.
He gives his father a highly selective version of events,
telling Michael he thinks Plutus's troubles
are linked to a previous business partner.
There is no evidence Michael Cranston is aware of his son's scheme.
Nevertheless, he offers him advice. is aware of his son's scheme.
Nevertheless, he offers him advice.
Michael Cranston would later say
he gave Adam the same general guidance
that he would to any taxpayer.
The average Australian doesn't have the capacity to
contact their father whenever there's a potential issue The average Australian doesn't have the capacity to
contact their father whenever there's a potential issue
contact their father with the ATO.
So, any sort of advice here,
I think, is deeply problematic.
(PHONE LINE RINGS)
Adam's contact with his father, Michael, continued days later.
Michael Cranston later says
that in this conversation he was referring to an incident
where a former business partner of Adam's embezzled funds.
He warns Adam that Plutus might already be on an ATO watchlist.
Michael Cranston never follows through on these inquiries
Michael Cranston never or accesses any tax records.
He then cautions his son
that he needs to be able to account for his assets.
I think this is a realisation from Michael Cranston
that the lifestyle that his son's living
is really out of kilter with perhaps what he's declared.
By the time the Plutus thing has been wrapped up,
Adam has multiple sports cars in his ownership.
In mid-May 2017
federal agents swoop on the syndicate,
executing 36 search warrants and arresting nine people.
Some of the assets and proceeds of crime seized include
at least $15 million in cash,
25 motor vehicles,
18 residential properties,
12 motorbikes,
in excess of 100 bank accounts and share-trading accounts,
two aircraft,
firearms, jewellery, artwork, vintage wines
firearms, jewellery, artwork, and also at least $1 million
that we've located in a safe deposit box.
It's absolutely not victimless.
It feeds other crimes.
It feeds organised crime.
It allows these criminals
to keep operating.
And it really does remove
a huge amount of money And it really does remove
a huge amount of money from public resourcing.
Money then has to go into investigations as a result.
It has to go into legal aid for people that are being investigated.
So, it costs a lot of money.
Financial crime costs a lot and it costs every single one of us.
(CAMERA SHUTTERS CLICK)
Deputy Commissioner Michael Cranston was charged with two counts
of abusing his position as a public official
to obtain a benefit for his son Adam.
Excuse me. Why did you resign from the ATO?
He was never accused of taking part in the tax fraud
and was found not guilty of the charges in 2019.
JOHN WINTER: I guess one of the more shocking aspects
JOHN WINTER: I guess is how closely it was connected
to one of the most senior people in the ATO.
And we understand that the evidence has been brought forward
that he didn't know of the conspiracy that was going on, And we understand that the evidence has been brought forward
that he didn't know of the conspiracy that was going on,
but it certainly raises your eyebrows
when the children of a Deputy Commissioner of the ATO
are the people leading the greatest tax fraud
are the people in the history of Australia.
It was a shocking moment in the history of Australia.
It was a shocking moment for everybody.
An independent review by the Tax Office
found Michael Cranston failed to act with honesty and integrity.
Michael Cranston told Four Corners
he rejects the findings of the ATO review,
that it took the recordings out of context
and that he did not participate in it while his criminal case was ongoing.
and that he did not participate in it (CAMERA SHUTTERS CLICK)
Daniel Rostankovski pleaded guilty
to blackmail, money laundering and fraud,
and was sentenced to 10 years imprisonment.
Simon Anquetil pleaded guilty
to conspiring to dishonestly cause Simon Anquetil pleaded guilty
to conspiring to dishonestly cause a loss to the Australian government
and dealing with the proceeds of crime.
He was sentenced to seven years imprisonment in 2020.
ANTHONY PAYNE: The tax fraud and money-laundering conspiracies
involved a significant level of sophistication, premeditation,
planning and deception
and a high degree of dishonesty and corresponding breach of trust.
and a high degree of dishonesty (CAMERA SHUTTERS CLICK)
Lauren Cranston was found guilty at trial of the same offences.
She was sentenced to eight years imprisonment in March 2023.
ANTHONY PAYNE: I have concluded
that, whilst greed in the receipt of over $181,000
for her involvement in the conspiracies
forms part of the explanation for Ms Cranston's conduct,
her participation was primarily the result
of a misguided sense of loyalty
to the people directing the conspiracies,
particularly her brother, Adam Cranston.
Adam Cranston, Dev Menon and Jay Onley
were also found guilty at trial
and will be sentenced in coming weeks.
Captions by Red Bee Media
Copyright Australian Broadcasting Corporation