The Australian Criminal Intelligence Commission (ACIC) is a member of the Serious Financial Crime Taskforce (SFCT), led by the Australian Taxation Office (ATO). As part of the SFCT, we have recently produced the classified Serious Financial Crime Threat Assessment 2024: Enablers of Tax Crimes in Australia.
Drawn from the work of the SFCT, the Phoenix Taskforce, and other law enforcement and regulatory actions, the threat assessment supports SFCT forward planning and prioritisation. It outlines the significant enablers of serious and organised tax crime in Australia, identifies emerging criminal tactics and methodologies and explores opportunities to further harden Australia’s financial system.
The threat assessment found serious and organised crime (SOC) groups continue using a wide range of tools and methods to commit serious tax crimes and fraud to mask – and even grow – their illicit wealth. Professional facilitators and evolving technologies also greatly enhance the sophistication and capability of SOC groups committing tax crimes.
ACIC acting Executive Director Covert Collections and Insights, Dr Katie Willis, explains how SOC groups use professional facilitators who possess specialised knowledge and access to Australia’s tax system. These facilitators exploit legislative loopholes and implement strategies to mask income from the ATO and other regulators.
“Some professional facilitators are unaware of their involvement, having been recruited by colleagues and business associates to better obscure the origins of funds obtained through tax crime, and to launder money,” Dr Willis said.
Illegal phoenix activity – where bankrupted or vacated companies are rebirthed without need to acquit outstanding debts – is not only difficult to target and disrupt, but also difficult to prosecute. In 2023, the Federal Court of Australia dismissed an Australian Securities and Investments Commission (ASIC) case against a liquidator, citing the lack of a definition of illegal phoenix activity. ASIC investigated the liquidation of the Members Alliance Group, which owed $17 million to the ATO, and alleged that the liquidator attended meetings where tactics to avoid creditors by transferring company assets and redirecting streams of income to new entities were developed. In dismissing ASIC’s case, the Federal Court noted that, “There is no such thing, per se, as ‘illegal phoenix activity’.” The absence of a single accepted definition or offence of illegal phoenix activity presents vulnerabilities in targeting and disrupting phoenix operators.
The ACIC will continue to work closely with the SFCT and other partners to combat serious financial crime impacting Australia.