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An accounting firm at the centre of a massive tax avoidance scheme which exploited homeless and drug-addicted people has had its registration cancelled in the wake of an ABC investigation.
Key points:
- A group of accountants linked to a "dummy director" scam have had their tax practitioner registrations cancelled
- The tax avoidance scheme was uncovered by an ABC investigation
- The scheme exploited the homeless and people addicted to drugs and alcohol and turned them into company directors
Last month the ABC revealed a group of Victorian accountants were using people addicted to drugs and alcohol, the homeless and other vulnerable Australians as "dummy directors" of companies in order to shield the real directors from the tax office and other creditors.
One man, Rodney Jackson, was the director of 26 companies despite living in a housing commission flat in Melbourne's inner suburbs.
He was unaware of his directorships until he was informed by the ABC.
The accounting firm, Brown Baldwin, had offices in Shepparton and the Melbourne suburb of Northcote.
After the tax office carried out raids on a number of properties linked to Brown Baldwin in 2018, the accounting firm shut down and rebadged as Auswide Tax and Accounting in the nearby suburb of Fairfield.
Both Brown Baldwin and Auswide Tax and Accounting were linked to a parent company called The Associates Vic Pty Ltd.
Following the ABC's story last month, the Tax Practitioners Board (TPB) cancelled the registration of The Associates Vic Pty Ltd and a number of individual accountants linked to the firm who had worked at Brown Baldwin.
Accountants failed to 'act honestly with integrity'
The TPB cited a number of breaches of duties in its code of professional conduct, including obligations to "act honestly with integrity", "comply with taxation laws in conduct of personal affairs", act in "the best interests of your client", ensure that the "tax agent service is provided competently" and "not knowingly obstruct proper administration of taxation laws".
The TPB also cancelled the tax practitioner registrations of Andrew Locantro, Biren Shah and Rajinder Narula, all of whom were accountants at Brown Baldwin.
Mr Locantro is also the son-in-law of Brown Baldwin's founder, Christopher James Baldwin.
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Another Brown Baldwin employee who was directly responsible for recruiting a number of dummy directors, Jesus Hidalgo, was never registered as a tax practitioner.
The tax evasion scheme uncovered by the ABC was relatively simple but effective, and had been carried out for more than a decade and a half.
It revolved around the installation of people such as Mr Jackson and others like him as dummy directors of companies that Brown Baldwin supplied to its clients.
When those companies racked up significant debts to the tax office and other creditors, they would be shut down with the assistance of a "friendly" liquidator, and the dummy directors would be left responsible for the debts.
Some directors, such as Mr Jackson, were bankrupted by the Australian Tax Office as a result.
Topics: tax, law-crime-and-justice, fraud-and-corporate-crime, tax-evasion, melbourne-3000, australia, shepparton-3630