RR Phantom
Location : Wasted Space
Job/hobbies : Cayman Islands Actuary
 |  Subject: OZschwitz: Vanuatu connection in arrest over tax evasion  Wed Sep 29, 2010 2:50 am | |
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Police allege Charles Pratten was in contact with the PKF Vanuatu boss, Robert Agius, writes Vanda Carson.
At 10.30am last Wednesday Australian Federal Police officers turned up at a nondescript office tower on Walker Street, North Sydney. They took the lift to the 14th floor, the office of Rural & General Insurance Broking.
Charles Pratten, 50, an executive who specialised in broking marine and aircraft insurance, had just begun his day's work. He was unceremoniously arrested, taken downstairs to a waiting police car and to Surry Hills police station.
His arrest and subsequent court appearance were the culmination of a two-year investigation by police as part of Operation Wickenby, the investigation into international tax evasion.
The divorced father-of-two's mobile phone had been tapped, his homes and offices had been raided and searched. In a summary tendered to Central Local Court police also said they had even tracked down his former girlfriend and his former office secretary to give statements about what they knew. They also spoke to the bursars of his daughters' private schools, and questioned a security guard who was renting a building Pratten owned about whether the guard owned a gun.
At Surry Hills station Pratten was charged with seven counts of tax evasion and with threatening to harm a Commonwealth public official. The latter charge arose from a search of one of his offices in Woolloomooloo. Police asked him if he would answer some routine questions, but he formally declined to speak to them. To avoid a night in jail, he was rushed into a late afternoon court hearing on Wednesday afternoon and granted $500,000 bail. He has not entered a plea.
Now he must endure the ignominy of reporting to Kings Cross police station every Monday, Wednesday and Friday - and he cannot leave the country.
But how did it come to this? Details police put before the court tell the tale. From the outside, Mr Pratten lived a rarefied life.
His house in Darling Point is virtually on the waterfront with uninterrupted views of the city skyline. He had two daughters at eastern suburbs private schools. In his spare time he flew his own helicopter and took his 45-foot game fishing boat, Los Lobos, out on the water. He also had a farm just north of the Hunter Valley where he bred Charolais cattle.
But according to his tax returns, Mr Pratten was earning a modest salary. Between 2004 and 2008, the court was told, he said on his tax returns that his income was between $60,000 and $80,000.
Only in 2003 and 2009 did his income creep into six figures. He is alleged to have categorically stated to tax authorities that he had no overseas-sourced income, and no companies abroad.
He did not own the house at Darling Point, the farm or the boat. Police say the house at Darling Point was rented for $7600 a month, the farm was held in the name of a Vanuatu-registered company they allege Mr Pratten owns, the boat was owned by a company owned by his accountant and the helicopter was owned by the Pratten Family Trust.
According to documents filed with the court, police allege his lavish lifestyle was financed with money that he had sent to Vanuatu from his Australian insurance broking company between 2003 and 2009.
The funds were marked as ''insurance premiums'', but police allege most were swiftly repatriated back home. They were allegedly either returned to his Australian bank account or to a New Zealand bank account set up by accountancy firm PKF used to pay the bills. PKF's New Zealand company bought cattle for his farm, paid his daughters' school fees, bought an investment property and funded the upkeep of Pratten's helicopter and his boat.
All up Mr Pratten is alleged to have received $5 million in undeclared income between 2003 and 2009. Of this he got $2.9 million in cash into his Australian bank account and a further $2 million went to pay bills.
Police are anticipating Mr Pratten will plead not guilty and fight the tax evasion charges. Police said in court that the money was income, not a tax-free loan, by using documents they seized in their raids of his house and office.
Police told the court they had taken a statement from his personal assistant, Candice Barcham, and from his former girlfriend Sarah Fairhurst. Ms Barcham allegedly said Mr Pratten directed her to send all large personal bills to his personal email account so he could pay them through Vanuatu.
He was a client of the accountancy firm BDO Vanuatu and later switched to PKF Vanuatu. The boss of PKF Vanuatu is Robert Agius, the alleged kingpin of the tax evasion conspiracy who was arrested by police on April 29, 2008.
Eight months after Mr Agius's face was splashed across the newspapers, Mr Pratten would have known the heat was on him when his house and office were simultaneously raided by the Federal Police, as was his accountant, the firm Griffiths Forrest & Greer.
The raids netted police dozens of emails and faxes in which Mr Pratten allegedly instructed PKF accountants in Vanuatu to pay school fees at Reddam House and Kambala, to buy a bull for his farm or pay for the refurbishment of his helicopter using funds in an account in the name of a Vanuatu company.
Police allege they found an email in which Mr Pratten admitted he had a beneficial interest in a Vanuatu-registered insurance company, a claim that contradicts what he told the Tax Office in his tax returns.
Police told the court they also relied on phone taps that showed Mr Pratten was rattled by the raids on his house and office.
On the day of the raids and in the days following, he was allegedly recorded calling Mr Agius and his other PKF accountants. He knew his business affairs were in the spotlight and that the Tax Office was auditing him.
But by February this year he appeared confident he would not be charged with any criminal offences.
He was recorded in a phone intercept telling Mr Agius he was sure the police could not get him, the police summary said.
''They don't know what they are looking for,'' Mr Pratten allegedly told Mr Agius around breakfast time on February 5.
''You have to remember the type of people that go into the federal police are generally leftovers from anything else.''
He allegedly told Mr Agius: ''I assume my calls are monitored but so what? I am allowed to speak freely.''
Police told the court that Mr Pratten went on to threaten Detective Sergeant Gerard Fletcher. ''He's going to cop a hiding, a thorough hiding for speaking like that.''
Mr Pratten has been charged with threatening to harm a Commonwealth public official.
In the same conversation Mr Pratten allegedly referred to his tenant, a former Kings Cross security company owner, Alan Kilgour. Pratten said Kilgour was carrying a gun when police raided an office Pratten owned in Bourke Street, Woolloomooloo.
''You should have seen the look on their [police] faces when they saw Alan's Glock which was bigger than their Glock.''
The court heard he then said it was easy to steal a police-issue pistol and he was planning to track down the address of Detective Sergeant Fletcher.
''It's easy to go and get yourself the latest Glock [pistol] you go up and smash a female police officer in the [inaudible], give her a kick in the guts and walk off in the [inaudible] and that's all you got to do and that's how criminals get their guns.''
ANCAPS: ANARCHO-CAPITALISTS |
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