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ATO boss's son lavished former lover with luxury gifts

Ms Brady says her rent was even paid.
Ms Brady says her rent was even paid. Supplied

THE former lover of the ATO deputy commissioner's son, Adam Cranston, has revealed how she was lavished with luxury clothes, jewellery, cars and surgery by her lover who is now accused of a multi-million dollar tax fraud.

Toni Brady, 24, told the Herald Sun she was swept off her feet by Adam Cranston, 30.

"It felt like a Pretty Woman situation," she said.

"He bought me jewellery. Diamond earrings, Hermes bracelets, handbags. My favourite are Dolce and Gabbana."

Ms Brady said she met her former lover through mutual friends and the pair enjoyed the high life together, with him paying for her rent, overseas travel, designer labels and "liposculpture" on her bottom before they split.

She claims to have had no idea he was allegedly involved in the fraud ring and her bank accounts have now been frozen amid the police operation that could become one of the largest white-collar crime cases in Australian history.

Toni Brady and Adam Cranston in Dubai.
Toni Brady and Adam Cranston in Dubai. Supplied

On Thursday, nine people were arrested over the "unprecedented" fraud that is estimated to have cost Australian taxpayers $165 million.

It indirectly involved Australian Taxation Office deputy leader Michael Cranston, who was issued a court notice for allegedly abusing his position as a public official.

Adam Cranston leaves Sydney Police Centre in Surry Hills after being released on bail yesterday.
Adam Cranston leaves Sydney Police Centre in Surry Hills after being released on bail yesterday. Dylan Robinson

AFP deputy commissioner Leanne Close said police don't believe Michael Cranston was aware of his son's activities, but allege the organised syndicate led a "significant" operation.

"The scale of this alleged fraud is unprecedented for the AFP; the response from our members yesterday is a direct response to the level of offending that we have identified during this operation," she said.

Ms Brady said her bank accounts were frozen in relation to the investigation with a letter explaining the process ironically bearing Michael Cranston's name.

Toni Brady and Adam Cranston, together in Dubai.
Toni Brady and Adam Cranston, together in Dubai. Supplied

Meanwhile, other members of the alleged scheme have been named as a former crime reporter, a tradie and an unemployed plumber whose mother said he didn't have "two cents" to rub together.

Toni Brady and Adam Cranston together.
Toni Brady and Adam Cranston together. Supplied

Nearly 300 police took part in 28 raids across NSW on Wednesday following a complex investigation based around a payroll scheme with "straw directors".

"It will be alleged in court that the fraud involved a company established by the syndicate to provide payroll services to legitimate clients," the AFP said.

"The money received from these companies was transferred to subcontracted companies - allegedly controlled by syndicate members - to process payroll. While processing these payments, funds paid by legitimate clients to service tax obligations were allegedly diverted by the syndicate for their own personal gain."

Luxury cars were among 25 vehicles seized under proceeds of crime, as were two planes, artworks, jewellery, wine and $1 million in cash.

HOW DID IT ALLEGEDLY WORK?

• Police allege the conspirators ran a legitimate payroll company called Plutus and accepted money from clients to process payroll on their behalf.

• Money was transferred to subcontracted or second-tier companies which made the payroll payments. That was legal but police allege what happened next was not.

• The subcontracted companies were allegedly fronts controlled by the syndicate and failed to pass on complete PAYG contributions to the tax office.

• The money was transferred to the alleged conspirators through a series of companies and trusts and used to fund lavish lifestyles.

DOES THE ATO MONITOR THIS SYSTEM?

• The ATO doesn't have the capacity to audit every single small business or taxpayer so some discrepancies will go unnoticed, University of Sydney tax law expert Micah Burch told AAP.

"The audit rate for small businesses is quite low ... in some ways the system relies on the honesty of taxpayers."

• Each employee pays different taxes so employers who withhold PAYG commitments can fly under the radar because there's no set payment amount.

• The alleged scheme was not particularly sophisticated, Burch believes. "Everyone knows the ATO can't audit everyone. It just seems to rely on the fact that stuff like this will get lost in the sea of transactions."

DOES THE ATO NEED MORE RESOURCES?

• Burch says ATO resources have been cut drastically over the past decade.

"Those kinds of cuts can't not have an affect on enforcement and compliance. The more ATO agents they have the more they can expose crimes like these."

Topics:  ato editors picks scam

News Corp Australia

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