https://thenewdaily.com.au/finance/2020/01/24/ato-raids-australians-global-money-laundering/

Hundreds of Australian tax avoiders using a dodgy bank in Central America could face civil or criminal charges after a global investigation into money laundering and tax evasion.

Tax agencies from the United States, Britain, Canada, Australia and the Netherlands targeted a financial institution operating in multiple countries that allegedly uses a sophisticated system to conceal and transfer wealth anonymously to launder the proceeds of crime.

The Australian Taxation Office (ATO) is now investigating potentially hundreds of Australian-based clients of the yet-to-be-named institution who are suspected to have channelled undeclared income through the scheme.

ATO assistant commissioner Brett Martin told the ABC’s “AM” program on Friday that investigations over the past 24 hours uncovered evidence relating to individuals rather than corporations or multinationals.

“We have concerns that hundreds of Australians may have participated in these arrangements and we have enough information to proceed with a small number of those at the moment,” Mr Martin said.

“Our focus is on looking at the enablers of these arrangements focused on the financial institution in Central America in relation to suspected tax evasion and money laundering.”

In a coordinated action, the Joint Chiefs of Global Tax Enforcement known as the J5 used search warrants, subpoenas and interviews to obtain “significant information” that could result in criminal, civil or regulatory action.

The ATO is also working with the Australian Criminal Intelligence Commission (ACIC), which is helping investigators with leads that could uncover more of the institution’s clients.

Mr Martin, who is the J5 deputy chief in Australia, would not name the financial institution and refused to specify its location in Central America.

“We’re holding the line on that one at this point,” Mr Martin said.

“But we are expecting civil, criminal and regulatory responses to be offered in this matter across a variety of jurisdictions.”

Global cooperation

In recent years, global tax agencies have targeted institutions including banks and law firms in Central America after criminal activity exposed in the Panama Papers and Paradise Papers.

Mr Martin said there was no link but warned tax evaders in Australia they faced more scrutiny than ever as a result of the coordinated action.

“We’ve learnt from those instances, Panama and Paradise, so if people are thinking of evading tax by using offshore structures or offshore financial institutions they’d better think again”.

The J5 consortium was created in 2018 because of mounting concerns that tax avoidance, cybercrime and cryptocurrency schemes were accelerating as criminals exploit gaps between national tax laws.

The J5’s international investigation was sparked by information obtained in the Netherlands that uncovered “professional enablers” that facilitate offshore tax crime.