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Gold bullion fraud probe ramping up

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Documents filed in two civil lawsuits in Queensland’s Supreme Court have identified individuals believed to have participated in one of Australia’s largest organised tax frauds, involving millions in illegal gold bullion sales.

On October 30, 2013, the Australian Federal Police reported that the Australian Taxation Office (ATO), Australian Crime Commission and the Australian Federal Police had executed search warrants on premises associated with companies operating in the gold bullion and precious metals industries.

Federal investigators said the scam involved altering or mislabeling pure gold bullion bars and coins — which are legally not taxed — as lesser-quality or scrap gold, which is taxed at 10%, to claim at fake Good and Service Tax (GST) tax credit, the Sydney Morning Herald reported.

The investigation was part of the work undertaken by the joint-agency Criminal Asset Confiscation Taskforce (CACT). As a result of the investigation, the ATO has issued garnishee notices and GST amended assessments with liabilities of more than A$130 million.

“The sheer amount of money involved in this matter and the activity undertaken to disguise its movement means we are treating this as an organised criminal activity,” AFP manager criminal assets commander Matt Rippon said .

However, the ATO has refused to disclose the identity of companies and individuals facing criminal investigations and tax audits. 

“We have not recovered all of the $65 million and continue to work for the remainder,” a spokesman told the SMH.

The newspaper reported more than a dozen raids have taken place in two states. The ATO has publicly estimated the scam cost taxpayers more than A$65 million, “but industry sources have put the final costs at potentially more than $200 million in faked and misappropriated GST payments,” said the newspaper.

In an affidavit filed with Queensland’s Supreme Court, Brisbane Gold Trader Robert Bourke claimed to be a middleman in a network of gold suppliers, the Sydney Morning Herald reported. 

Bourke said his involvement began after he started doing business with MAK Precious Metals of Melbourne. Bourke alleged he sourced and transported dozens — sometimes hundreds — of kilos of gold weekly.

MAK also reportedly bought gold from other sources including bullion gold dealer Rocco De Gonza.

Bourke claimed that MAK founder Michael Kukula told Bourke that his industry buyer of the bullion was New South Wales precious metals refinery EBS & Associates. EBS is an official refiner for the Royal Australian Mint and a manufacturer of investment grade gold products.

In late 2013, Bourke’s ability to buy gold faltered as his company began defaulting on bills for gold bought on credit, court documents stated. 

Queensland’s Ainslie Bullion Company sold Bourke $10.1 million in gold, but received only $1.2 million in payment. The bullion company filed a lawsuit seeking a freezing against Bourke, MAK and EBS.

In turn, Bourke sued MAK claiming he was owed more than $11.3 million. Bourke’s gold trading business collapsed in April, with suppliers and investors owed $20 million in gold and cash, said the newspaper.

The lawsuits filed by Bourke and Ainslie Bullion Company have been dismissed on technicalities.

This article appears courtesy of Mine Web. To read more daily international and mining finance news click here.

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