What we know about Plutus Payroll, the company allegedly at the centre of Australia’s biggest white collar fraud case

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At the centre of what has been described as the biggest white
collar fraud case in Australian history is a startup called
Plutus Payroll.

Australian Federal Police allege it is this company from which
$165 million in tax dollars were siphoned, ending up in the
pockets of a criminal syndicate.


The case has drawn in a senior tax official
and his son and
daughter and resulted in a series of arrests and the seizure of a
long list of luxury goods, including sports cars and light
planes.

Police today described Plutus as a “legitimate payroll company”,
but being controlled by members of the alleged crime syndicate.

Here’s how the alleged fraud worked:

Plutus accepted money from legitimate clients to process payroll
on their behalf.

This money was transferred to seven sub-contracted companies
known as “Tier 2” companies, which then made payroll payments to
individual workers of clients.

The directors of these Tier 2 companies are what are known as
straw directors, or people recruited to appear to be running the
companies, but who in reality know nothing or little about
operations. The crime syndicate members were in effective
control.

As part of their contractual obligations to the legitimate
payroll company’s clients, the Tier 2 companies are required to
remit pay as you go (PAYG) withholding tax payments to the ATO
(Australian Tax Office) on behalf of the clients.

However, investigators found that only part of these tax
obligations were paid.

The remaining money was allegedly siphoned off by the syndicate
members and channelled through a complex series of companies and
trusts for their own personal gain.

Plutus Payroll, well know among IT contractors, had trouble early
this month when
the ATO froze its accounts
, meaning thousands of people
didn’t get paid.

Whirlpool forums at the start of May had technology workers
complaining about missing pay managed by Plutus, as well as a
lack of response from the company to enquiries.

“I switched contracts and ended up with this mob as suggested by
the agents. Not looking good at the moment — a month of pay
including super is what I am worried about,” said one post.

The website for Plutus Payroll Australia had all content removed,
replaced by a single message remaining that the company is
suspending its business “due to a commercial dispute”.

“For our valued contractors whose pay has been affected on 27 or
28 April, 1 or 2 May, please contact us,” the company stated,
referring to a contact form and a telephone number.

A week later it emerged that the ATO had
frozen the company’s bank accounts
. “Acting in a draconian
and unfair manner, the ATO froze Plutus’ bank accounts on 27
April without prior warning or any consultation,” the company
said.

And later the company said: “Plutus Payroll is very pleased to
advise that the ATO has agreed to allow the release of the wages
owed to our contractors. For more information please click.”

Today the website only contains a contact form.

Private equity firm SYNEP recently listed Plutus as a part of its
portfolio. However, the page on its website for its portfolio is
empty now.

Adam Cranston, the son of Michael Cranston, a deputy commissioner
at the ATO, who was arrested and charged as part of the tax fraud
case, is
listed as the co chair and managing director of SYNEP
.

The previous content confirming SYNEP as an
investor in Plutus can be seen using webarchive.org.

The SYNEP portfolio page, now deleted, said: “Plutus Payroll
offers contractors a zero-fee, fully automated, all-inclusive
contractor payroll management service. Employers can take
advantage of the fully automated cloud platform to manage
payroll.”

Business Insider has contacted SYNEP seeking comment.

According to the LinkedIn profile of Tim Munk, a
former general manager who worked for two years at Plutus until
April, a number of executives left the company when it changed
ownership.

“Sadly, following a change in ownership and subsequent
restructuring, Tim Munk parted ways with Plutus Payroll along
with Tim Fox and Chris Long to start work on their own business
venture — more in-line with the ethos of a better customer
experience,” Munk says on LinkedIn.

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