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Plutus Payroll co-conspirator told to repay ‘washed’ $11m
Michael Teplitsky helped move hush money paid to keep Australia’s largest corporate tax fraud hidden, a court has found.
Christine Chen
A Sydney property developer has been ordered to pay $11.2 million for his role in “washing” funds connected with the Plutus Payroll tax fraud scheme, the biggest white-collar crime in Australia’s recent history.
On Wednesday (28 August), the NSW Supreme Court found Teplitsky helped breach director duties and entered uncommercial transactions to move money extorted from the fraud syndicate.
The Plutus Payroll scam involved a conspiracy to divert pay-as-you-go withholding tax and GST using Plutus, a start-up payroll company.
Between 2014 and 2017, $105 million was taken from legitimate clients attracted to the fee-free service and then laundered through second-tier companies.
The scheme was uncovered after a joint Australian Taxation Office (ATO) and Australian Federal Police (AFP) investigation known as Operation Elbrus that became a key focus for the Serious Financial Crime Taskforce.
It ended with the arrests of many of the conspirators in May 2017, just under a month after the ATO put a garnishee order on Plutus Payroll’s accounts.
In sentencing him last July, Justice Anthony Payne found he “exercised his legal skills to give effect to the conspiracies”.
“His behaviour in accepting funds … which should have been paid to the ATO is thoroughly discreditable conduct for a solicitor to engage in,” Justice Payne said.
Plutus liquidators Timothy Norman and Salvatore Algeri brought a suit against Teplitsky as an associate of Plutus employee Daniel Rostankovski, who turned on his co-conspirators and demanded millions in return for not exposing the scheme to media or police.
The liquidators alleged Teplitsky helped Rostankovski orchestrate the blackmail plan and laundered funds received.
According to evidence, more than $24 million was transferred from the account of Lands Legal that was held on behalf of Plutus by the now-convicted lawyer Sevag Chalabian as a result of the blackmail.
Teplitsky and his companies then participated in two sham transactions involving Lands Legal.
In the first transaction, $4.3 million was advanced to buy out third-party rights in a Surry Hills property development in which Teplitsky had an interest.
The second transaction involved $6.85 million being used to repay a debt owed by Tepcorp Holdings.
Justice Scott Nixon found Teplitsky “assisted Mr Rostankovski in the implementation of his dishonest and fraudulent design, by negotiating, entering and implementing” the two transactions.
“Those payments were made from the Plutus Funds held in the Lands Legal Trust Account, and Plutus Payroll received nothing in return for those payments,” he said.
“The evidence … establishes that Mr Teplitsky agreed to ‘wash’ the moneys … for the benefit of Mr Rostankovski and his associate, Mr Hausman.”
He said Plutus was entitled to an order against Teplitsky for $11.2 million equitable compensation, being the total amount of the Plutus Funds paid out of the Lands Legal trust account.
