Australia – Number of contractors caught in payroll fraud grows

The Department of the Prime Minister and Cabinet has more than doubled its estimate of contractors who used Plutus Payroll at the centre of the Australian Taxation Office fraud scandal for payroll services, reports the Canberra Times.

The scandal was described as the largest suspected white collar fraud racket in Australia’s history. Plutus had allegedly been funnelling wage payments through several sub-contracted ‘second-tier’ companies. These companies were effectively operated by a crime syndicate that only paid a fraction of the required income tax according to Australian Federal Police (AFP). This adversely impacted a number of labour hire firms (the Australian term for staffing companies) that outsourced their payroll operations to Plutus.

The department told senators it engaged 23 contractors who used Plutus Payroll for payment while doing government work, an increase on the department’s initial estimate of nine. The department told senators it engaged the contractors who used Plutus through six labour hire companies: Programmed Professionals, First People Recruitment Solutions, Dynamo IT, Hays Recruitment, Clicks & Programmed, and Horizon One.

Meanwhile, a Queensland warehouse complex run by Metcash, an Australian grocery company, has been drawn into the Plutus Payroll scandal, reports the Australian. It comes amid a Taxation Office probe of labour hire companies at the site and fears workers have been underpaid.

The Australian obtained documents that show pay slips received by workers at the Crestmead site in Queensland were issued by companies linked to people who Federal Police claim were “straw directors” used in the Plutus Payroll scam.

The Rush Corporation, a recruitment group that Metcash uses to hire labour at Crestmead, has told workers it has no access to old pay slips issued by the outsourcing companies.

The National Union of Workers has said that up to 200 workers may have been underpaid and have added that the entire affair has added weight to the union’s call to licence labour hire firms. Metcash has stated that they “expect any labour hire providers we engage to comply with their legal obligations.”

Source: Australia – Number of contractors caught in payroll fraud grows