Panama Papers: Fraudsters, former tax officials among Australians identified in Mossack Fonseca leak

Updated

Convicted fraudsters, directors banned by the corporate regulator and former Australian Tax Office (ATO) officials are among hundreds of Australians linked to companies incorporated by Panamanian law firm Mossack Fonseca.

They appear in the largest data leak ever analysed by journalists, with more than 11 million documents including emails, company registers and client files revealing the inner workings of Mossack Fonseca.

Analysis by the ABC reveals the full extent to which Australians are using a range of financial services offered by the firm.

The leak shows several Australians directly approaching Mossack Fonseca asking for help to hide their identities and avoid paying tax.

Key figures: 77 Australian clients or intermediaries working with Mossack Fonseca

More than 732 Australian shareholders

418 Australian passports listed in leak

More than 1,092 Australian-linked companies identified

800 individuals identified by ATO

In June last year, an electrician from Perth emailed Mossack Fonseca asking what he could do to "reduce or zero my tax".

Within 24 hours Mossack Fonseca replied with a range of options for their prospective Australian client.

Another Australian called "Kriz", writing from a Yahoo email account, asked directly for tax haven options that would provide "complete privacy and secrecy".

While it is not unlawful for Australians to set up and own offshore companies, it can be an offence to fail to disclose those assets to the Australian Tax Office.

Deputy tax commissioner Mark Konza said the ATO had obtained part of the leak, and investigations had shown "a number of people who are either in our Wickenby or our wealthy Australians investigation programs" in the data.

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Since 2006 tax fraud taskforce Operation Wickenby has charged 76 individuals and sent 46 people to prison.

Accompanying the hundreds of Australian shareholders, owners and directors named in the leak are dozens of Australian lawyers and accounting firms who act as "intermediaries" and use Mossack Fonseca to set up companies in tax havens for Australian individuals and companies.

Former opal miner Maxwell John Reid

Only weeks after completing a prison sentence for 66 fraud-related charges, Maxwell Reid emailed Mossack Fonseca requesting an escrow account to move $100 million.

Escrow services are a type of pass-through account in which a customer deposits money into Mossack Fonseca's escrow account before the law firm sends that money on as if it were its own money.

In an application form, the former Coober Pedy opal miner said the millions he wanted to transfer were earned from investors and mining operations and described his role as a "paymaster" who received a "percentage" for his services, which appeared to be investing money for clients.

The ABC contacted Mr Reid who confirmed he requested escrow services, but when asked if he had a current account with Mossack Fonseca he said: "Never ever."

Fine Cotton fraudster, John Patrick Gillespie

Documents reveal the mastermind behind Australia's most infamous racing scandal became a director of a company named International Millionaire's Club after he was released from jail in the early 1990s.

John Patrick Gillespie was convicted over his role in the infamous 1984 "Fine Cotton ring-in" in which another horse, Bold Personality, was painted and substituted for Fine Cotton in a race at Brisbane's Eagle Farm racecourse and won.

Mr Gillespie already had an extensive criminal history when, in 1992, he became a founding director of International Millionaire's Club and another company called International Horseowners Club, both incorporated in the British Virgin Islands and the Bahamas by Mossack Fonseca.

Both companies were struck off the registries by 1995, but Mr Gillespie continued to be investigated for multiple scams allegedly involving race horses, anti-wrinkle cream and a multi-million-dollar collection of famous artworks which allegedly left investors high and dry.

Mr Gillespie was unable to be reached for comment.

Former ATO employee, Warren Black

Having an offshore company is not illegal for the law abiding.

Warren Black, a Perth-based accountant and former ATO employee who runs a company called Wealth Safe, also appears in the leak as a director and shareholder of a Mossack Fonseca-managed company called Wealth Grow International Limited, which was incorporated in the Seychelles in March 2015.

Mr Black's website states his "life passion" is legally "getting people out of paying tax" and that he is known for his "ability to create out-of-the-box solutions to minimise tax" and wants to make "the complex tax and asset protection secrets of the rich easily understood by the average person".

On the day the company was incorporated, Mr Black's signature appears on a document declaring accounting records and registers are up to date and available to Seychelles authorities on request.

The ABC is not suggesting any illegal behaviour or wrongdoing by Mr Black.

Mr Black told the ABC he was surprised to hear about the leak but was not worried because his offshore company was completely legal.

"I've always been a big believer of minimising taxes as much as you absolutely can, provided you stay within the law," he said.

"I've been audited myself a couple of times in the past and it's come out very clean, so I always make sure I do things cleanly.

"I think that everyone has got to ultimately look after what is [in] their best interests within the law."

Mr Black notes on his website that he is a "gifted musician" and uses his unique piano-playing skills in his YouTube video series entitled Global Sovereignty — Free Yourself From Unjust Taxes.

Murray Priestley, ASIC-banned stock trader

Former Queensland-based Lifestyle trader chief executive Murray Priestley relocated to Singapore after the Australian Securities and Investments Commission (ASIC) found he engaged in "deceptive conduct" and offered clients "misleading advice".

In June 2013, ASIC banned Mr Priestley from providing financial services for three years.

At the time, Mr Priestley was a director of a company registered by Mossack Fonseca.

After Mossack Fonseca became aware of Mr Priestley's ban, the firm sought additional due diligence information but it appears requests went unanswered.

Despite the ban, Mr Priestley and his company Alpha Holdings Management remain active, according to the leaked documents.

Mr Priestly was unable to be reached for comment.

Warwick Farm Grandstand Motel

While there are hundreds of Australians named in the database, documents also reveal there are 77 Australian intermediaries or clients of Mossack Fonseca.

These clients help Mossack Fonseca incorporate companies in tax havens.

The Australian clients include accountants and law firms as well as an obscure motel in West of Sydney.

The run-down Warwick Farm Grandstand Motel charges by the half day, and has been the centre of multiple violent disturbances.

It is also listed as a client of Mossack Fonseca and has set up an offshore company called "K.D.S Incorporated".

Emails between Mossack Fonseca and the Warwick Farm Grandstand Motel show they never produced due diligence documentation despite dozens of requests dating back to 2011.

A warning on the client file says: "PLEASE DO NOT PROCESS ANY FUTURE PAYMENT UNTIL THE CLIENT COMPLIES WITH THE DUE DILIGENCE DOCUMENTATION."

However, both Warwick Farm Grandstand Motel and the company it registered, K.D.S Incorporated, remain active in Mossack Fonseca's internal documents.

The motel's holding company was also the subject of a wind-up action by the ATO last year, which was later dismissed.

Neighbours to the property described the motel as "feral, dodgy and full of drug users and prostitutes".

The Warwick Farm Grandstand Motel has a TripAdvisor rating of 1.1 star.

One unimpressed user "Mark J" said the place looked like "a drug deal gone wrong, stains, burns and crack pipes", while another reviewer "Alex P" said it was "a good place to take a prostitute".

When the ABC called the motel the company's directors were unavailable, however a receptionist advised the motel charged $80 a night and $49 for a half-day.

Read Mossack Fonseca's full response to the ICIJ investigation.

Topics: business-economics-and-finance, tax, law-crime-and-justice, corruption, government-and-politics, australia, panama

First posted