National

‘Vulnerable’ man jailed for ATO tax fraud

By AAP Newswire

When recovering drug addict Aaron Leo Paul was in a struggling rehab centre set to close, he turned to a wealthy high school friend for help to keep the facility open.

But instead, he was allegedly recruited into Australia's largest tax fraud scheme, and will now spend at least two years behind bars.

Paul, 37, pleaded guilty in the NSW District Court to money laundering, with Judge Sophia Beckett on Friday jailing him for three years and four months with a non-parole period of two years.

The alleged tax fraud syndicate was set up to provide payroll services to legitimate clients, according to the agreed facts.

But their payments were transferred to subcontractors controlled by syndicate members who pocketed the money instead of sending it to the Australian Taxation Office.

More than 10 people have been charged over the conspiracy, allegedly led by Adam Cranston, the son of a former ATO deputy commissioner.

Judge Beckett said Cranston allegedly hired Paul, who was fresh out of rehab, to become his personal assistant, then to recruit straw directors for the syndicate.

Paul was not charged with being a part of the conspiracy but has admitted he knew the money he was being paid was "tainted".

He pocketed more than $210,000 from the $100 million-plus scheme in cash and goods, the facts said.

The judge noted Paul had made a serious commitment to change his life and that his offending was not driven by a desire for a lavish lifestyle.

"He was motivated not by greed ... but by a misguided belief that involving himself with Cranston was the best way to get his life in order," she said.

She said Paul was desperate when Cranston hired him.

With his rehab facility foreclosing, he knew without a job and a place to live he would end up back in jail.

"Cranston offered him an alternative to returning to custody in circumstances in which he had nowhere else to go," Judge Beckett said.

The boss of the ATO's serious financial crime task force welcomed Friday's sentence.

"These sorts of crimes impact on real people," Will Day said in a statement.

"Tax fraud removes money from the revenue system that could be used by the government to fund essential services and initiatives to benefit the Australian community."