DON’T GET SCAMMED
The accountant-lawyer at the centre of the $105 million Plutus Payroll tax scam has been sentenced to 14 years jail following a guilty verdict in March.
Dev Menon, the man described as “pivotal” to an operation which siphoned off millions owed to the ATO, had “abused his position” as a solicitor for the benefit of criminals, Justice Anthony Payne told NSW Supreme Court.
“He was involved for long hours and exercised his legal skills to give effect to the conspiracies,” Justice Payne said.
“His behaviour in accepting funds … which should have been paid to the ATO is thoroughly discreditable conduct for a solicitor to engage in.”
The Plutus Payroll scam began with five conspirators in 2014 and attracted legitimate clients with a fee-free service.
Money meant for the ATO – including PAYG and superannuation funds – was then laundered through second-tier companies run by straw directors who were “vulnerable” and drug-affected.
Justice Payne found Menon became a knowing participant in the scheme from June 2015.
Menon’s role “varied and increased dramatically” over time but it included setting up a “potential safe harbour” by suggesting Plutus pay more tax to avoid detection, managing the straw directors and having them sign documentation knowing it would expose them to risk, and participating in meetings where the conspiracy was discussed.
He also told co-conspirators to add him to discussions so they could use legal professional privilege to conceal information, gave out advice about avoiding payroll detection, drafted legal documents to facilitate key transactions, and assisted with the destruction of evidence.
When one of the original co-conspirators, Peter Larcombe, was found dead in Los Angeles, Menon was captured on a police recording suggesting to Adam and Lauren Cranston – the children of then-ATO deputy commissioner Michael Cranston, who was not alleged to be involved in the scam – to blame everything on Mr Larcombe.
“While not an architect of the scheme, he was a very close and trusted adviser,” Justice Payne found. “As the scheme progressed over time and particularly as the scheme threatened to unravel … Menon’s role became pivotal.”
In Februrary 2017, Comanchero-associate Daniel Rostankovski, who was brought in to recruit the straw directors, turned on the conspirators.
Mr Rostankovski threatened violence and to expose the scheme unless the co-conspirators handed over $5 million. After he received this, he then demanded a further $20 million.
The conspirators paid the money into a trust account operated by Eddie Obeid’s lawyer Sevag Chalabian, who was sentenced to 12 years’ imprisonment last year for his part in facilitating the blackmail.
Justice Payne said while Menon was fearful of the threats of violence, he used the blackmail to his advantage to keep the crimes concealed.
“The payment was not made under duress (but was) principally to avoid detection of the crimes of Menon and the co-conspirators,” he said.
Menon regularly advised the co-conspirators on ways to keep their scam secret, including introducing hackers into the system to “crash the whole thing”, erasing messages and emails, and suggesting possible defences if they were charged with a crime.
Menon was “not principally operated by greed” but had been set to receive $248,000 in shares prior to his arrest in May 2017.
The court heard while Menon may be able to return to an accountancy role, his job in the legal profession is over. His non-parole period is set at nine years.
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