Two targets of a Wickenby tax operation have walked away from prosecution after it was found their trial had been mishandled by authorities.
It’s an unusual turn for the multi-agency Wickenby tax taskforce, which is usually successful in finding and prosecuting tax evaders. The probe has been given additional hundreds of millions in funding over the past two years to help track down evaders and recover over $1 billion in lost revenue.
Former Gadens Lawyers employees Ross Edward Seller and Patrick David McCarthy were charged in March this year over ties to an alleged tax fraud, which involved a whisky company and links to the Swiss firm, Strachans.
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The pair set up a plan to invest in making whisky in Scotland in the late 1990s and attracted some wealthy investors, who put in about $90 million. But these investors are alleged to have been lent the money from offshore entities and escaped tax charges in the process.
Seller and McCarthy were charged for actions taken between May 2001 and December 2002. But the problem came when the Australian Crime Commission shared evidence with the Commonwealth Department of Public Prosecution – an act that wasn’t authorised.
Justice Peter Garling of the New South Wales Supreme Court found on Friday the ”conduct of the Crime Commission, in conjunction with the Commonwealth Director of Public Prosecutions, has deprived them of the protection which the law ensured. Any trial would not be fair.”
He also said it would offend the “administration of justice for the applicants to be confronted by prosecution authorities who have had access to material ordinarily caught by the privilege against self-incrimination, but which has been compulsorily obtained”.
Garling said this was no mere “administrative oversight”, and that due to the relationship between the two bodies, “an early and intentional decision was made to share all available information”.
Counsel for the accused suggested other cases may have been subject to the same errors.
The Tax Office was contacted this morning, but a reply was not available prior to publication. It has been pushing the Wickenby operation fully this year, prosecuting several cases against entrepreneurs and business owners.