The Australian Federal Police have charged Michael Issakidis with tax fraud and conspiring to deal in the proceeds of crime after dismantling what it claims is a multi-million dollar tax evasion and money laundering scheme.
The 67-year-old company director and property developer came to public attention last year when he sued game show legend “Baby” John Burgess for rent he claimed Burgess owed him for living in his Gold Coast penthouse.
Issakidis was arrested on Tuesday following a seven month joint investigation between the AFP and Australian Tax Office under Project Wickenby in the largest tax fraud investigation identified since it was launched in 2006.
More than $40 million of Issakidis’ luxury assets have been seized under Commonwealth proceeds of crime legislation including a number of Rolls Royces, a Lamborghini, an Aston Martin, a Mercedes, a BMW, a number of yachts and “prime real estate” in Sydney and on the Gold Coast.
Issakidis is a former lawyer and listed as the managing director of Queensland-based NeuMedix Health Group, a group of 16 investment and technology companies.
The NeuMedix website describes Issakidis’ role as “work[ing] closely with the scientists and inventors to ensure the integrity of the technology is not compromised”.
“Through his network of professionals and colleagues he provides unprecedented exposure for our innovators to meet industry leaders and influencers.”
The AFP and ATO claim Issakidis used a complex unit trust structure to over inflate the prices of Australian patents once transferred offshore, claiming corresponding depreciation expenses to amass $63 million over a three year period.
The AFP and ATO allege these funds were then laundered through an account in the UK and numerous accounts in Hong Kong before being transferred back into Australia.
NeuMedix was contacted by SmartCompany for comment but did not respond prior to publication.
ATO Commissioner Michael D’Ascenzo says the operation uncovered a serious abuse of the integrity of the tax system.
“Parties who rely on tax driven deals to justify the commercial viability of business transactions are on notice that we will use our anti-avoidance rules to deal with such schemes,” D’Ascenzo says.
“The ATO will pursue all means available, including partnering with other law enforcement agencies, to respond firmly to these tax avoidance and evasion behaviours and protect the public revenue.”
AFP Commissioner Tony Negus says the charges demonstrated the ongoing commitment by the police to disrupt serious criminal activity.
“Taking the profit out of crime is the aim of the Criminal Assets Confiscation Taskforce which is targeting organised crime’s deep pockets,” Commissioner Negus says.
The Federal Government congratulated the AFP on the seizure and Minister for Home Affairs and Minister for Justice Jason Clare says the key was that organised crime is driven by money.
“Take away their money and assets and it reduces the incentive to commit crimes,” Clare says.
“Just like with Al Capone – you can catch criminals by following the money.”