Five face possible tax fraud charges and 40,000 under investigation | 7NEWS

Five suspected Sydney fraudsters could now face charges, and another 40,000 individuals are under investigation, suspected of inventing fake businesses to claim false refunds.

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The ATO launched raids this week with support of the Australian Federal Police, building on last month’s effort which targeted 19 individuals suspected of GST fraud involvement.

The national crackdown is part of a major investigation by the ATO-led Serious Financial Crime Taskforce pursuing individuals “suspected of inventing fake businesses to claim false refunds,” SFCT chief Will Day said on Friday.

This week’s raids targeted five Sydney-based individuals, after the ATO last week warned offending Aussies to “come forward or face severe consequences”.

Last month at least six arrests were made in Victoria in connection to fraud.

Now Day, who is also ATO deputy commissioner, has another warning for fraudsters: “If you think you won’t be caught, think again … there is no place to hide.”

“Your name could be next on our list, and you could face severe consequences, including jail.”

Another 40,000 individuals are currently under investigation, suspected of being involved in major GST fraud.

Warrants have already been executed in locations across NSW, Victoria, Tasmania, South Australia, Western Australia, and Queensland.

AFP commander of economic and corporate crime and corruption Christopher Woods said: “Every dollar fraudulently obtained represents lost funds that could have been used to benefit everyday Australians in our community.”

The average amount being fraudulently claimed is about $20,000.

GST fraud involves the invention of fake businesses and Australian Business Number (ABN) applications, and submitting fictional business activity statements in an attempt to be paid a false GST refund.

The ATO launched Operation Protego in May and has since then stopped “over $1 billion in fraudulent claims” from being issued.

Social media platforms have played “a key role in promoting this type of GST fraud” according to Day, who added that the taskforce has information sharing agreements in place and is working with social media platforms.

“We’ve also had reports of people offering to buy and sell myGov details in order to access these refunds,” he said.

SFCT has shared the information of about 29,000 individuals suspected of committing fraud to the the Australian Criminal Intelligence Commission.