In a startling turn of events, the Supreme Court of New South Wales has handed down convictions and prison sentences to two individuals, Cedric Adrian Millner and Jonatan Kelu. The conviction stems from their joint conspiracy to orchestrate a financial loss of approximately $40 million to the Commonwealth, following actions taken by the Australian Taxation Office (ATO).
Both Millner and Kelu were found guilty of two offenses related to conspiring to dishonestly cause a loss to the Commonwealth, as outlined in section 135.4(3) of the Criminal Code Act 1995 (Cth). The court has sentenced each of them to eight years of imprisonment, with a non-parole period of four years and six months. Their charges revolve around their involvement in a gold bullion fraud scheme conducted over a span of two years.
The investigation, led by the ATO under the codename “Operation Nosean,” revealed that the two men engaged in a complex scheme. They purchased GST-free gold bullion, transformed it into scrap, and subsequently sold it, including GST, to a gold refiner. Jonatan Kelu, the sole Director of Investrix Pty Ltd, claimed GST input tax credits in business activity statements. This was achieved by falsely stating that the GST-free gold bullion was acquired inclusive of GST under the GST second-hand dealers rules, leading to a staggering loss of approximately $40 million in revenue.
John Ford, Chief of the Serious Financial Crime Taskforce (SFCT), expressed long-standing concerns about precious metal fraud. He emphasized that the convicted individuals believed they could exploit the system, detrimentally impacting funds that could have otherwise supported crucial services such as health and education.
“This result sends a strong message to the community that we have strong measures in place to combat all types of financial crime, including those involving gold bullion. Mr. Ford said, “Our committed team of experts will hold those who attempt to take advantage of the tax and super system accountable for their actions.”
The SFCT initiated Operation Nosean to combat gold bullion fraud, specifically targeting schemes involving gold recycling arrangements and exploiting GST rules related to precious metals. Identified participants in these fraudulent activities include refiners, bullion dealers, gold kiosks, dealers, and buyers, often with varying degrees of complicity throughout the supply chain.
In response to such fraud, the SFCT issued an Intelligence Bulletin in 2017, reinforcing its commitment to addressing fraud in the precious metals refining industry. Subsequently, new laws came into effect on April 1, 2017, imposing a reverse charge GST on gold supplies to refiners, traders, and businesses purchasing scrap gold, silver, and platinum.
The legal proceedings were handled by the Commonwealth Director of Public Prosecutions, marking a significant step in holding those attempting to exploit the tax system accountable for their actions. The message is clear: there is no refuge for those seeking to evade or cheat the tax system, and such behavior will not be tolerated.
Despite the unfortunate $40 million gold bullion fraud, the convictions of Cedric Adrian Millner and Jonatan Kelu highlight the justice system’s unwavering commitment to combating financial crime. The punishment isn’t just about holding people accountable for trying to cheat on taxes; it also shows how important it is to be honest and fair in money-related things.
The tireless efforts of the Serious Financial Crime Taskforce, particularly Operation Nosean, demonstrate a proactive dedication to addressing fraudulent activities in the precious metals industry. The legal proceedings, expertly handled by the Commonwealth Director of Public Prosecutions, serve as a powerful deterrent, emphasizing that show that cheating on taxes won’t be tolerated and will be strongly discouraged.
Moving forward, the good thing to remember is that everyone is committed to following the rules and keeping the community’s money safe. Even when there are problems like people trying to cheat, the justice system stays strong and makes sure things are fair. This helps people trust that society is fair and honest, creating a positive and clear money system for everyone.
