Tax

Alleged fraudster’s business partners “gobsmacked” at extent of $63 million tax racket

Cara Waters /

Michael Issakidis’ business partners were completely unaware of the $63 million in tax evasion and money laundering claims against him until their homes and businesses were raided by the Australian Federal Police last week.

The 67-year-old’s business partner at health group NeuMedix, Professor Max Reynolds, and Griffith University Professor Cordia Chu are among those picking up the pieces after the AFP charged Issakidis with tax fraud and conspiring to deal in the proceeds of crime.

More than $40 million of Issakidis’ luxury assets were 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.

Reynolds is a director and owner of NeuMedix alongside Issakidis and Anthony Dickson who is also wanted for questioning by the police.

However, Reynolds told SmartCompany he was unaware of the claims made against Issakidis and Reynolds until the AFP turned up to raid his house and business.

“About 30 police arrived and raided two of the staff’s homes, our main office in Brisbane, then my home and the factories where we manufacture,” says Reynolds.

“I was informed about the circumstances and allegations and I must admit I was somewhat gobsmacked as I knew nothing about his personal business and the other businesses he works in beyond his role as a director of Neumedix Global.

“The Federal police told me when they came in I was not included in their list of suspects, as we were simply in the wrong place at the wrong time.

“The scale of it just beggars my mind. I still can’t get my head around exactly what they did or how they laundered the money.”

Reynolds says the raid was a traumatic experience with his wife in particular receiving a “big shock” when police turned up at their home.

The AFP and Australian Tax Office 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.

Reynolds says he does not know whether any NeuMedix patents were involved in the alleged scam.

“Because of his legal background [Issakidis] put together all the paper work needed to set the company up to market the product as we got to the point of production.

“I am a scientist not a businessman and our function is to do clinical trials.

“[Griffith] University was assisting us to make the right contacts and Michael’s role was to look after the administration of the legal requirements of the company.”

Reynolds says he does not believe the allegations against Issakidis will jeopardise the scientific work NeuMedix is undertaking.

“No, not at all as they are two separate entities completely, we are currently doing stage three trials into Dengue fever in Indonesia and as far as I am concerned it will not interfere with our work.

“We have nothing to hide and I was equally shocked as everyone else by this whole thing … I am still recovering from it.

“It was something I never expected would happen and I had no knowledge of the alleged illegal activity.”

Through Reynolds, Issakidis’ influence has also spread to the Australasia Botanical Medicine for Population Health Program at Griffith University.

The program pursues and promote international collaborations in research and development of herbal medicine for global health and is currently focused on the application of melaleuca, a herbal product that researchers believe may be able to treat rare diseases.

Professor Cordia Chu heads the team at Griffith University and she told SmartCompany she was “totally shocked” to hear of the allegations against Issakidis.

Chu was quick to distance herself and the university from Issakidis claiming that her involvement with him was limited to that of a “matchmaker”.

“I have only had a couple of casual meetings with Michael and I have nothing to do with him”, says Chu.

“Our university’s only involvement was to introduce [NeuMedix] to an Indonesian university which is researching the impact of melaleuca on Dengue fever.

“So we have no particular dealing with Michael, we just introduced them for this public health issue.”

Chu says she does not know if any of Griffith University’s research is at risk as a result of the alleged transfer of Australian patents offshore and the over inflation of the patents.

“I hope it won’t because the university is looking for a cure for something that is really a tremendous challenge for the world and large populations are at risk,” says Chu.

“I like to stay clear from the commercial side of any venture.”

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Cara Waters

Cara Waters is the former editor of SmartCompany. Previously, Cara was a senior reporter at the Financial Times website FT Adviser in London and she also worked for The Sunday Times in London.

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