High-Flying Executive Receives 11 Year Jail Sentence For Corporate Tax Fraud
Thursday 26 March 2015 @ 11.36 a.m. | Crime | Taxation
Former Ernst & Young executive Anthony James Dickson has been sentenced to 11 years in jail after being found guilty on two counts relating to a corporate tax fraud scheme carried out by Neumedix Health Australasia Pty Ltd (“NHA”). Mr Dickson was sentenced last week by Justice Beech-Jones of the New South Wales Supreme Court, after a jury trial that concluded last year found him guilty of offences under s 11.5(1) and s 135.4(5) of the Criminal Code Act 1995 (Cth).
Mr Dickson studied accountancy and law at the University of New South Wales, and has worked for Price Waterhouse, St George Bank, Westpac and the National Australia Bank in addition to Ernst & Young.
The Scheme
His Honour summarised the charges at [9] – [10]:
“the offender and his co-conspirator [Mr Issakidis, the co-director of NHA] agreed to cause NHA to make false depreciation claims in its tax returns of many hundreds of millions of dollars. The depreciation claims were in respect of the alleged cost of acquisition by NHA of certain medical technologies, even though it was agreed that no such cost was to be incurred. The offender and his co-conspirator agreed to this so as to enable NHA to avoid incurring tax liabilities on income it was deemed to have received as the owner of units in a number of trusts. These trusts generated very large taxable profits from their participation in certain financing transactions that were arranged between the offender, the ANZ Banking Group Ltd (“ANZ”) and some of its clients…
the offender and his co-conspirator agreed to deal with the “proceeds of crime” being the amounts standing in various bank accounts that represented the cash distributions from the trusts to NHA… The offender and his co-conspirator agreed to cause the funds to be distributed offshore to various accounts controlled by entities associated with the offender and then repatriated to Australia, largely for their own enrichment.”
The Crown also contended that Mr Dickson had used a false identity of “Peggy Wong”, to support his false claims to the ATO. Although at trial, Mr Dickson called two witnesses including his brother, who said they had met her, Justice Beech-Jones found he was “satisfied beyond reasonable doubt that the reports were concocted by, or at the direction of, the offender” [at 34].
His Honour estimated the Commonwealth’s loss or damage under the Criminal Code to be a temporary delay in obtaining a tax debt of more than $100m [at 85].
According to a report in the Australian Financial Review:
“Mr Dickson and Mr Issakidis allegedly received around $68 million in cash between 2006 and 2009 out of the arrangements, which was spent on Ferraris, Rolls Royce’s [sic] and $100,000 watches and a shopping centre in Queensland.”
Mr Issakidis was originally standing trial with Mr Dickson, but the jury was discharged in his respect due to the late provision of evidence by the Crown in R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595.
The Sentence
Justice Beech-Jones quoted Milne v R [2012] NSWCCA 24 in his summing up, saying at [134]:
“There is a high community expectation that serious tax fraud will be properly punished and offenders, no matter their business acumen and high status in the commercial world, will be dealt with sternly and appropriately.”
He also strongly criticised Mr Dickson, saying that while he had some sympathy for the position he was now in:
“his situation is not a product of circumstances but of a conscious decision on his part to pursue a dishonest and fraudulent tax scheme on a large scale. He engaged in the conduct the subject of the offences while holding an unshakeable belief in his intellectual superiority to all those around him and the ATO.” [at 137]
His Honour was also concerned about sentencing submissions made by Mr Dickson, saying Mr Dickson wrongly refused to accept blame for the case:
“Large parts of those submissions sought to reargue the case put by the offender to the jury which they rejected. In that part of the submissions that addressed personal deterrence the offender repeated his bitter complaints about the actions of the ATO and the prosecuting authorities in laying charges. In that part of the submissions that addressed his prospects of rehabilitation, the offender stated “Mr Dickson has learned that he should avoid doing business in Australia” [at 116].
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Sources:
R v Anthony James Dickson (No 18) [2015] NSWSC 268 (20 March 2015)
R v Dickson; R v Issakidis (No 12) [2014] NSWSC 1595 (10 November 2014)
