‘F***ing brilliant’ tax fraud scheme backfires

A CENTRAL figure in Australia’s largest-ever alleged tax fraud once boasted of the brilliance of the scheme that has landed him in court.

John Meredith Kitson was the general manager of Plutus Payroll, the company behind a conspiracy alleged to have defrauded the Australian Taxation Office of more than $105 million in three years.

The 37-year-old pleaded guilty in November to conspiring to cause loss to the Commonwealth.

Crown prosecutor Peter Neil SC on Tuesday told Kitson’s sentence hearing in the NSW Supreme Court that without him “it is difficult to see that this scheme could have operated”.

Plutus Payroll was a company that operated under the guise of a payroll business but was instead allegedly focused on fleecing the ATO of the pay-as-you-go tax and GST it was owed, the agreed facts state.

The company’s clients – including the NSW Department of Education and the Department of Social Services – would transfer to Plutus their gross payroll monies, believing the company would pay employees their wages and superannuation and the tax office what it was owed.

Instead, Plutus would transfer that money to a complex web of companies it subcontracted the work to, paying employees their wages but keeping a large portion of the money meant for the tax office.

The money meant for the tax office was then allegedly paid back to the players in the scheme.

Fourteen people were charged over their alleged roles in the conspiracy.

Agreed facts state that Kitson’s role in the scheme was as a frontman for Plutus and began in early 2014. He effectively acted as a “‘mole”‘ or “‘plant” in Plutus for the remaining conspirators.

Kitson brought clients into the business and managed its employed staff – all of whom were ignorant as to what was going on.

Plutus itself was managed to appear “squeaky clean” and lured its clients in by charging no service fees.

When what they questioned what appeared “too good to be true” clients were told Plutus could afford to charge zero fees because it made money through other arms of the business.

In fact, Plutus could afford to do this because it was ripping off the tax office.

In discussions with his alleged co-conspirators over Skype, WhatsApp and text Kitson described the scheme as “f***ing brilliant”.

The scheme no longer appeared so brilliant on Tuesday, as Justice Anthony Payne prepared to sentence him for his crime.

“This was a gravely serious conspiracy,” Mr Neil told the court.

“We submit that the offender’s role was at a high level … this was a very complex, carefully planned, prepared and executed scheme.

“(Kitson) was knowing and willing and he stood to gain substantial remuneration.”

By early 2017, Kitson and his alleged co-conspirators had decided their Plutus scheme needed to be shut down and he played a “key role” in attempting to conceal the conspiracy and destroy business records.

As the Office of State Revenue began investigating some of Plutus’ subcontractors Kitson worried things could unravel.

But he was ultimately confident the scheme was too hard for the tax office to work out and threw investigators off the scent by suggesting the best person to contact was a man he already knew was dead.

“Look if they do figure this thing out, they’ll deserve it … they’ll need rooms of the c***s working for them,” he was recorded as saying.

Before his arrest, Kitson received more than $1 million through the scheme.