Could your local accountant or tax agent be mixed up in financial crime?
It’s quite possible: many Aussies who ‘enable’ serious financial crime are actually just ordinary accountants and lawyers, a senior tax office official and a criminology expert have revealed.
Serious financial crime, which costs Australia around $47 billion a year, is a “highly complex problem” which is driven by various groups of people with different kinds of motivation, said Australian Institute of Criminology deputy director Dr Rick Brown.
One of these groups are what’s described as “enablers” who assist “hardcore criminals” in making money by rorting the system, said Brown – but often these ordinary people are just ‘suburban’ lawyers or accountants who don’t even know they’re facilitating crime.
“In some cases, it would be naivety, not being aware that actually they're getting involved in organised crime because perhaps they haven't done their due diligence in terms of knowing your customer and who they're dealing with,” Brown said on the .
However, not all ‘enablers’ fall into this category.
“In other cases, actually it's just greed, that they can make more money this way,” Brown said.
“Perhaps they can charge a greater percentage on the business there. In other cases it could be excitement that they're getting involved with stuff that's a bit edgy. In other cases actually there's a business imperative.”
Business might not be going well, which may tempt some business operators to take risks to turn things around that they usually might not have, Brown said.
“So there's a whole range of different reasons why your suburban lawyer or accountant could get involved in this kind of activity.”
The good news is, most professionals do the right thing, and the Australian Taxation Office (ATO) keeps in touch with industry associations and organisations like the Tax Practitioners Board to “weed out those few bad apples”, said ATO deputy commissioner Will Day.
“But we also know ... it's relatively easy to be infiltrated,” Day said.
“It can start off quite innocuous. It might be through a social connection, it might be through just being asked to help facilitate something that doesn't look quite right, and from there you get dragged pretty quickly into having to facilitate more bad behaviour.”
From there, criminals will attempt to give their “ill-gotten gains” a veneer of legitimacy, he said, which is where you see money laundering through casinos, poker machines or offshore entities.
But this usually leaves traces that the ATO will catch wind of, Day warned.
“There's always a chink in the armour, there's always a clue, whether that's the money going offshore or the money coming back in or the way we work with jurisdictions offshore to look at those international transfers. There's always a chink that we can trace it back to.”