Veteran Australian journalist allegedly blackmailed tax fraud syndicate

Veteran journalist Steve Barrett.
SAHLAN HAYES/SUPPLIED

Veteran journalist Steve Barrett.

A veteran Sydney journalist allegedly blackmailed members of a A$165 million (NZ$177 million) tax fraud syndicate after conspirators in the group had a falling out, it can be revealed.

Explosive documents tendered in Central Local Court on Thursday state that well-known television journalist and former crime reporter Steve Barrett allegedly blackmailed two members of the syndicate during a meeting at the offices of Clamenz Lawyers on February 1.

Eight people were arrested on Thursday over the alleged tax fraud syndicate including Adam and Laura Cranston, the son and daughter of Australian Taxation Office Deputy Commissioner Michael Cranston.

 

Michael Cranston has also been issued a future court attendance notice for a charge of abusing his position as a public official.

​The police documents reveal that one syndicate member, Daniel Rostankovski, turned on other conspirators and allegedly tried to extort money from them.

AFP handout photo showing the arrest of Adam Cranston outside his Bondi home.
Australian Federal Police

AFP handout photo showing the arrest of Adam Cranston outside his Bondi home.

At the February 1 meeting, Rostankovski and Barrett allegedly threatened to expose the conspiracy in the media if money wasn't handed over.

"Police allege ... Rostankovski and Barrett attempted to blackmail the co-conspirators in relation to their involvement in the conspiracy," the police documents state.

Rostankovski allegedly demanded A$5 million or Barrett would expose the group in the media.

ATO Deputy Commissioner Michael Cranston will be charged over the alleged fraud.
ROB HOMER/SUPPLIED

ATO Deputy Commissioner Michael Cranston will be charged over the alleged fraud.

Rostankovski felt like he had been deceived by the group as other members were receiving more money than him.

The group allegedly agreed to their demands if he didn't go to the media, the police or the ATO. An agreement was signed that outlined such undertakings, the police documents reveal.

Rostankovski, a 28-year-old from Waterloo, was granted strict bail in Central Local Court on Thursday. Barrett has not been charged. He did not return Fairfax Media's calls on Thursday.

Barrett, who previously worked for 60 Minutes, was a long-time employee as a producer in the Channel 7 newsroom but left the network in March 2016, before the alleged blackmail took place.

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Australian Federal Police Deputy Commissioner Leanne Close said the syndicate appeared to use the money to fund a "lavish lifestyle".

Among the items seized under proceeds of crime were 25 motor vehicles, including luxury cars and racing cars, 12 motorbikes, 18 residential properties, two aircraft, A$1 million from a safe deposit box, firearms, jewellery, bottles of Grange wine and artworks.

ATO Second Commissioner Andrew Mills said two other ATO officers were also being investigated internally for potential code of conduct breaches. It's believed they tried to look up information on the ATO's audit at the behest of Michael Cranston.

The announcement came after nearly 300 police officers on Wednesday carried out raids across Sydney, Wollongong and the Southern Highlands, arresting nine people.

Among those who appeared in court on Thursday are Rostankovski, 28, from Waterloo; Jason Cornell Onley, 47, from Vaucluse; Daniel Hausman, 47, from Woollahra; Christopher James Guillan, 46, from Sutherland; Dev Menon, 33, from Wahroonga and Devyn Hammon, 24, from Balgownie. 

Police will allege in court that the syndicate members ran a legitimate payroll company, Plutus Payroll, and 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 or clients," the federal police said in a statement.

Tax office investigators, who helped the federal police during the investigation, estimate the amount of tax obligations not paid to the tax office to be A$165 million.

Mills described Michael Cranston as one of the organisation's "long-serving senior officers" who had "quite an illustrious [career] up until this point".

Mills said he was confident the tax office's systems had not been compromised nor breached and the accused employees were not able to obtain any information.

"The investigation has so far not revealed any evidence of actual intervention or influence on audit cases, or of money being refunded, or of tax liability being changed," Mills said.

"The information I have to date shows no compromise of the operations of our administration. Our systems, controls and procedures worked effectively and we have been able to successfully isolate and protect the investigation, working well with the Australian Federal Police over many months to build a picture of what has been happening."

Australian Prime Minister Malcolm Turnbull congratulated the federal police for the investigation and "taking the action that they have".

 - Sydney Morning Herald

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