Free Because It Should Be

Transcript of the published episode, checked against the episode script. Where the voice slipped on a word, the script's word is used, and words in square brackets expand an abbreviation inside a quotation. Figures are written as numbers. Spot an error? Email auditthismedia@gmail.com.

00:00 The payslip said the tax had been paid

Go and find your last payslip. There is a line on it, down near the bottom, that you have almost certainly never checked.

It says tax. It is the money that was taken out of your pay, before you ever saw it.

You never touch it. You never watch it move. Somebody takes it out on your behalf, and passes it on. And every payday of your working life, you have simply assumed that they did.

Between 2014 and 2017, a payroll company in Sydney collected $141,291,923 of other people’s tax.

It kept $105,625,304 of it. Three quarters. The company advertised itself as free.

15 people were sentenced. The longest was 15 years. And the workers whose money it was? There is no record of a single one of them ever getting their superannuation back. When it came to the queue for what was left, a court ruled they were ordinary creditors. Not the employees of the company that took it.

It said so, on the payslip.

01:12 1989: a bricklayer, and the gap a court described

In 1989, a bricklayer in Sydney started a company. He was good at it. One big apartment developer paid his companies about $34 million over nine years. He employed tradesmen. Never fewer than 60. Sometimes 250.

The judge who eventually sentenced him put it this way.

“The prisoner seems to have been a good employer, paying good wages, maintaining as much as possible continuity of employment.”

Every week, he took the tax out of their pay. Every week, it was printed on their payslips. And every week, he kept it.

Nine years and four months. $7,302,221.58. Here is how it worked. When a company fell too far behind to survive, he wound it down. The men, and the jobs, simply moved across to the next one. 10 companies in nine years. Each one gone before anybody could make it pay. On the last five, his name was not even on the paperwork. Other people were the directors. One of them told a liquidator he knew nothing about the company he was supposedly running.

He pleaded not guilty to all 10 counts. In July 2001, after a 14-day trial, a jury convicted him on every one. Defrauding the Commonwealth. Seven years and eight months. He appealed. He lost.

And then the sentencing judge said the thing this whole episode is about.

“The moneys which he received, week by week, as income tax deductions from the pay packets of his employees, were not, in any real sense, his private funds.”

Obviously. But listen to how carefully the judge chose his next words. Because the care is the point.

“The deductions might not have been, in a pedantic legal sense, trust funds in the hands of the prisoner. But they were certainly funds as to which both his employees and the Commissioner of Taxation trusted the prisoner... to account properly and honestly.”

Trusted. Not held in trust. That sounds like lawyers splitting hairs. It is the whole story. 18 months later, the same court spelled it out. When tax is taken out of your wages, your employer does not hold that money for you. It does not hold it for the tax office either. It just owes it. In the court’s words, “an ordinary unsecured debt”. No priority. No claim on anything the employer owns.

So from the moment it leaves your payslip, the tax you paid is a debt that somebody else owes. Like a phone bill.

And not paying a debt is not, by itself, a crime.

One of the judges added a warning. That the tax department had been lax. For years. Slow to notice when employers stopped handing the money over, and slow to act when they did. His words were “the laxness of the Taxation Department”.

That was February 2003. 11 years later, five men sat down together at a club in the Sydney central business district and found the same gap.

Nobody taught anybody anything. There is no connection between the bricklayer and any of them. The gap was just sitting there. And a court had already written it down.

04:08 The pitch, and a joke about tax that is 2,400 years old

If you were an Australian contractor in 2015, somebody probably tried to sell you Plutus Payroll.

And the pitch was very hard to argue with. “Australia’s first Zero-Fee Outsourced Payroll Service.”

Most payroll companies took 2 or 3 per cent of your wage to move it from one bank account to another. Plutus took nothing. Not a discount. Nothing.

“Why pay to get paid? Any company asking you to hand over 2 to 3 per cent of your hard-earned wages, just to get paid, is a complete rip-off.”

“We provide the best contract payroll service in Australia, at no cost to you. Free... because it should be.”

So how does a company that charges nothing stay open? They answered that, on their own blog, in September 2014.

They said their own technology had brought the cost of running payroll down. And that they made their money from financial partners, and from the recruitment agencies. Rather than from you.

There were two more promises, and they are the ones worth holding on to.

“Minimise Director’s Liability. Our outsourced payroll and labour model places the onus of these burdens on us, the experts, rather than the Company Directors.”

And. “Staff and Statutory Payments. Never worry about a mispayment to a bank account or super fund again. We handle the payments. And we follow up any issues.”

Recruitment agencies signed up, and not one of them did anything wrong. Contractors signed up. 35 federal government agencies were paying people through labour hire firms that used it. Including the Australian Taxation Office.

Now. The name. Plutus is the Greek god of wealth.

And he is blind. Not by accident. In Aristophanes, the god explains it himself. He had threatened to go only to the just, and the wise. And to stop him telling them apart, Zeus struck him blind.

They named a payroll company after a god who cannot tell the deserving from the undeserving.

06:06 The men who ran it

Nothing on their website says so.

It starts in February 2014, and the court is quite precise about where.

“Between February and March 2014, at least five of the conspirators had meetings at so called gentlemen’s clubs in the Sydney CBD, during which they discussed a scheme which involved operating a payroll business as a means to misappropriate [pay-as-you-go withholding] amounts, and GST that was payable to [the tax office].”

Five men. And at that meeting, new phones were handed out. So that nobody could listen in.

Remember that. They began with counter-surveillance. And they finished by saying every single thing out loud, in a room the police had already wired.

Who they were. Simon Anquetil was the founder. His own staff biography said that when he was not immersed in Plutus Payroll, and I quote, he could be found staring out the window, admiring Sydney Harbour.

He pleaded guilty. The court found he took at least $12,218,000 out of this. Which is more than anybody else.

Jason Onley was a former professional snowboarder. He was convicted, and his conviction is under appeal.

Dev Menon was a solicitor in private practice in Sydney. He was convicted, and his conviction is under appeal.

Peter Larcombe was the fourth man the court called an architect. He left Australia in August 2015. He died in Los Angeles in August 2016. Everything that happens to his name after that, happens without him.

Adam Cranston worked in insolvency. So. Five men. And a general manager called Joshua Kitson.

Alongside Plutus, Anquetil and Onley ran a venture fund. Its website had a slogan across the top.

“Are you an investor or entrepreneur? Look to a new breed of partner, for due diligence or support.”

And underneath, a section headed Meet Your Team. Simon Anquetil’s biography was there, properly written.

Next to it, Jay Onley’s biography read like this. “It is a long established fact that a reader will be distracted readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters.”

That is the printer’s placeholder text. It is what you leave in a template when you have not written anything yet.

A due diligence firm. That had not finished filling in its own website.

And in March 2016, Cranston and Onley set up something new, to buy Plutus off Anquetil for $5 million. It was called Synep. Sydney Equity Partners. Its website described it as a private equity firm.

“Synep Private Equity invests in Australian and New Zealand companies with enterprise values between $20 million and $200 million. We specialise in buy-outs, industry consolidation, shareholder change, succession solutions, and growth capital.”

The court found it was, from the day it started operating, a vehicle for the continuation of the conspiracies.

09:08 How the machine actually worked

Here is how it actually worked. And it is worth going slowly, because the whole episode sits on it.

A recruitment agency has a contractor working somewhere. Every fortnight, the agency pays Plutus the whole cost of that person. The wage. The superannuation. And the tax that has to be withheld.

Plutus does not do the payroll. Plutus passes the job down to a subcontractor. The subcontractor pays the worker their wage. In full. On time. Nobody complains, because nobody has anything to complain about.

And then the subcontractor keeps the tax. The court’s words on why none of this looked wrong.

“The principal incentive for contractors and companies to sign as clients of Plutus was the fact that Plutus did not charge any fee for its services. Plutus was designed to be squeaky clean, and apparently compliant with its taxation obligations.”

There were eight of those subcontractors. And you can watch the effort run out in the names.

The first two had proper company names. The third misspelled a word on purpose. And then they stopped bothering, and the last five were initials and state abbreviations.

The directors of those eight companies were real people, with real names on real forms, who did not run them. The court described them like this.

“The controllers of the second tier companies arranged for vulnerable and unsophisticated people, who did not understand the operations of the second tier companies, to be appointed as the sole shareholders and directors.”

They were paid to sign things. The man who recruited and managed them used a false name. When one of them got a tax office letter about a $3.5 million debt in his name, and raised it, he was told it would be taken care of.

Remember the man with the false name. When one of the eight built up a tax debt too big to survive, it was liquidated, and another one took the work. Menon, on which ones to burn.

“We’re going to keep three of them, and burn two.” “Let’s have a fighting track record with them.”

That is a phoenix. It is not a clever new crime. It is the oldest one in the book.

From March 2016, they added something. Plutus began quietly holding back a further cut of the money the agencies sent it. About 20 per cent. By November, it was automated.

And in November 2016, you can hear the machine strain. Adam Cranston’s sister Lauren ran the back office. On the 10th of November, on a recorded line, to her brother.

“I’d rather pay the tax.” “We don’t, Adz, we don’t have any more, mate, trust me. We chase our own tail. Like, it’s fucked.” “We’re running blind.”

He told her to relax. 12 days later, she told him what percentage of its tax each company was actually paying.

Six of the seven were paying between half and two thirds. The seventh was paying 0.084 per cent. For every $1,000 of tax it owed, 84 cents.

Between 2014 and 2017, they collected $141 million of other people’s tax. And sent the tax office about $31 million.

Every one of those workers got a payslip. It told them the tax had been taken out of their pay.

12:14 “Lovely”

And it had. It said so, on the payslip.

The thing you need to understand about Plutus Payroll is that it was lovely.

By every outward measure, they were exactly the sort of business you would want your money going through.

In June 2016, Plutus and the venture fund gave more than $100,000 to batyr. A youth mental health charity that goes into schools.

And the way they did it is on their own blog. End of financial year parties in Melbourne, Sydney and Canberra. Items donated by their own staff, auctioned. Every donation on the night matched, dollar for dollar.

The room raised $7,355. And then they added $100,000 of, in their words, their own funds.

The post ends, “Keep up the good work, team!” They sponsored a hackathon. Clean water in Uganda. 10 Indigenous children to a three day basketball camp in Redfern. And then the venture fund sponsored 10 more, and wrote it up, and spelled one of the children’s names two different ways in the same post.

And the venture fund ran a blog. Some of what it published.

“Tips on Saving Money.” “Creating a Wall of Protection in Your Mind.” “Why every Defeat is a Blessing.”

And on the 1st of February 2017, three and a half months before the federal police came through the door, “Four Ways You As An Entrepreneur Can Help Your Local Community.”

The charity was real. The children went to the camp. The money reached batyr.

None of those people did anything wrong. A fraud this size has to look like a business. And looking like a business is expensive.

They were paying for it out of other people’s pay packets.

Quick one, before we follow the money. This show is free. Actually free. So if it’s been worth your time, follow Audit This, wherever you’re listening, and give it five stars. That’s how the next person finds it. There’s a new story every week.

14:07 What the money bought

So what do you buy. Adam Cranston, on the tape, as the money started to flow.

“I am going to get access to some new toys now.”

In February 2017, three months before it all ended, Adam Cranston drove in a 12-hour race at Mount Panorama. A Porsche GT3 Cup car, shared with three other drivers.

He finished 16th outright. Second in class. The founder, Simon Anquetil, forfeited five properties, a collection of luxury watches, and three cars. All three were Infinitis.

The court found Adam Cranston personally received not less than $6,861,000. And that some of it went on a truck, luxury cars, a plane, three properties.

And a caravan. There is no photograph of the caravan. No make. No model. Nothing. It just sits there in the judgment, between the plane and the properties. And that is all anybody will ever know about it.

And on the 13th of June 2017, Adam Cranston told the federal police there was money buried at his property. They dug up $169,750. In a plastic bag. Inside a cooler. In the ground.

The police graded the assistance as being of low value.

And this is what he told a psychiatrist, afterwards, about 2016.

“By 2016, it was all too late. I was already in it. So I would try and enjoy it.”

One more. Sevag Chalabian was a solicitor. Over 12 weeks in 2017, $24,244,000 of other people’s tax went through his firm’s trust account. 53 deposits in. 22 payments out.

In February 2017, a blackmailer offered him $20,000 for every extra million he put through. The judge recorded his answer. Absolutely no prob.

He was paid $51,597 in legal fees. He moved another $880,000 offshore. And the judge found, beyond reasonable doubt, that this was a reward for himself.

16:15 The room was wired

He got 12 years.

Now. There is something the men in this story did not know. And you have been half looking at it for about 10 minutes.

From October 2016, the federal police had warrants on their phones.

From December 2016, there were covert cameras and microphones in the back office at Miranda. And from January 2017, there were surveillance devices in Dev Menon’s own firm’s offices, on Martin Place.

More than 70 hours of recordings. Almost everything that follows was captured.

On the 31st of January 2017, the camera in the back office watched Lauren Cranston and two others carry out the records and the computers. She whispered to the woman beside her.

“In all honesty, I don’t think they’ll come guns blazing just yet... that’s just my opinion... But just in case they do.”

At 8.53 that evening, a message to Menon. “Nothing left in Miranda.”

Dev Menon, the 14th of February 2017. His conviction is under appeal.

“There’s no forensic accountant in the world. Without even, without even, I can’t even fucking piece this together. Like, it’s impossible... Like, mate, they will never figure it out.”

Jason Onley, on the 24th of January, on what they had built. His conviction is also under appeal.

“What I don’t want to do is do what we did with the last round, right. When we used the money from the new to bail out... creating the Ponzi shit, because you can never get out of that... You dig a hole you can’t get out of. At some point, you’ve gotta take a hit.”

He said that four months before the raids. Adam Cranston, on the tax office.

“The ATO don’t give a fuck about GST... GST are the dumbest fucks. So they... don’t care.”

On the 27th of January, Onley said the one thing that would get them caught. Cranston answered, “Is phones.”

18:09 The blackmail

The room was already recording.

Cranston, on the 20th of February, rehearsing. “But the money trail doesn’t lead to me, though. Because I got no. Would they be able to pin me for defrauding the Commonwealth?”

He would say he did debt collection. He thought he was buying a proper company. And Menon, his lawyer, gave him this review.

“Yeah, Adam, you are so good at this... You’ve got a defence for everything. That was never the question.”

And Menon, on the 28th of April, asking the group a question.

“When do we get hacked? Do we say on the weekend, or no?”

In the middle of all this, they were being blackmailed.

By the man with the false name. The one they had paid to manage the straw directors. He had watched the money for months. And by his own account, had worked out that in three months, in his words, “Someone’s pocketed $25 million.” So he asked for it.

On the 1st of February 2017, he sat down with Menon and Cranston in Menon’s own office, and told them he had members of an outlaw motorcycle gang waiting downstairs, ready to come up and, in his words, belt them. The judge who later sentenced him found there was nobody downstairs. The demand reached $25 million. And over 12 weeks, $24.24 million of withheld tax went out of Plutus, and into the trust account you heard about in the last act. Sevag Chalabian’s.

The room was already wired. Cranston’s assessment of being extorted.

“It’s actually a blessing in disguise.” And Menon, working out loud what would happen if they simply shut everything down.

“It’ll be like, you can’t blackmail us, we’ll just go to the cops.”

The judge’s finding on why they never did. “I find that it was only the need to prevent their criminal conduct from being exposed, which prevented Mr Menon and Mr Cranston from approaching the authorities about the blackmail.”

The same recordings caught them talking about the eight people whose names were on the companies.

Adam Cranston asked whether one of them was, and these are his words, “smart enough to sit in a meeting.”

He said another one had “gone off her head.” And about a third.

“Illiterate... The guy’s got an IQ of, like, 54... He’s probably a section 10, mate. Have you checked he’s not a section 10?”

A section 10 is section 10 of the Crimes (Sentencing Procedure) Act. It lets a court that has found an offence proven deal with somebody without recording a conviction. Having regard to their character, their age, their health, or how trivial the offence was.

He was using it as shorthand. He was asking whether the man whose name he wanted on a company was capable of understanding what he was signing.

Menon, on the affidavits they had those people sign. “Once we got the affidavits, I’ll feel comfortable that they’re stitched up to the max.”

Here is what those names were for. “When the ATO served the directors with millions of dollars in director penalty notices, and requests for interview, the conspirators planned that the straw directors would not be able to identify them. Elaborate plans were made by the conspirators to falsely accuse the deceased Peter Larcombe, and blame him for everything, if they were ever questioned by authorities.”

Menon, the 14th of February. “Basically, what we are saying is, Peter ran the whole thing. Okay. You guys had no idea what was happening. If this ever comes to it.”

Nine days later, Adam Cranston. “Has he written that Peter Larcombe ran this, and all that type of stuff?” And the judge, in his own judgment, adds one sentence.

21:41 Squeaky clean

“It will be recalled... that Mr Larcombe had died the previous year.”

It was not brought down by a whistleblower. No whistleblower has ever come forward.

In February 2016, the tax office noticed a few small companies going into liquidation, owing withheld tax. That is it. Routine monitoring.

And underneath that, something quieter. It was later reported that workers’ group certificates did not match what the tax office had against their tax file numbers.

The largest tax fraud in Australian history was found because the numbers on ordinary people’s payslips did not add up.

In January 2017, the tax office started issuing garnishee notices. It took the money straight out of the accounts.

Onley. “If they go to the ATO, we are cooked.” Menon. “Look, it’s over. Like, I’m telling you, as it gets to that point, we’re cooked.”

In April, the accounts were frozen. The pay runs due on the 27th and 28th of April, and the 1st and 2nd of May, did not happen.

And Plutus told about a thousand contractors this, on its own website. In capital letters. With its own typo left in.

“Effectively immediately, Plutus Payroll is suspending our business activities, due to a commercial dispute.”

The 17th of May 2017. 28 search warrants across Sydney, Wollongong and the Southern Highlands. 209 federal police.

$15 million in cash. 25 vehicles, including race cars. 12 motorbikes. 18 properties. More than a hundred bank and share trading accounts. Two aircraft. Firearms, jewellery, artwork, vintage wine. And at least a million dollars in a safe deposit box.

Simon Anquetil was arrested at Sydney Airport the following morning.

Now the part nobody has told. The contractors were finally paid on the 10th and 11th of May, after a senator wrote to the tax office on their behalf.

Their superannuation was not paid. There is no record of it ever being paid.

317 of them lodged claims in the liquidation. For $1,006,932.84. One of them, a software engineer, put in a written submission of his own. For $4,360.96.

And on the 6th of September 2019, the Supreme Court cleared the liquidators to treat them as ordinary creditors, rather than employees.

They had never worked at the company’s premises. They had never reported to anyone there. So they went to the back of the queue. Behind the tax office.

The company that took the superannuation out of their pay was not, for this purpose, their employer.

And that was correct. As at the date of this recording, there is no public record of a single dollar going back to a single worker.

24:32 The ledger: fifteen sentences

It said so, on the payslip.

In March 2023, the jury convicted all five. Adam Cranston. 15 years. Jason Onley. 15 years. Conviction under appeal. Dev Menon. 14. Conviction under appeal. Sevag Chalabian. 12. Daniel Rostankovski. 10 years and five months. Patrick Willmott. Nine. Daniel Hausman. Eight. Lauren Cranston. Eight. Simon Anquetil. Seven years and six months. Joshua Kitson. Four years and six months. Devyn Hammond. Four. Christopher Guillan. Four years and six months. Aaron Paul. Three.

15 people were sentenced over the fraud and the blackmail. Not every sentence has been reported. And one person’s has never been published at all.

Lauren Cranston was 21 years old when this started. The court found her role was a subordinate one, and said this.

“Whilst greed, in the receipt of over $181,000 for her involvement in the conspiracies, forms part of the explanation for Ms Cranston’s conduct, her participation was primarily the result of a misguided sense of loyalty to the people directing the conspiracies. Particularly her brother, Adam Cranston.”

She got eight years. Her brother took $6.8 million. The court found she received $181,000. And it gave her the benefit of the doubt to get there.

And here is what Adam Cranston told his own psychiatrist, when it was over.

“I worked in insolvency, liquifying companies with a large tax debt. I saw directors walk away from companies without any possibility of paying their tax debt, keep their assets without a penalty, and driving Ferraris. I was always told that it’s immoral, but not illegal.”

The judge answered him. In the judgment. In writing. “Can I be clear. Installing vulnerable, drug addicted people as directors of companies, running up massive tax debts in those companies by taking money from them which should be paid to the tax office, and then planning to liquidate those companies with large tax debts, is a very serious crime. If there are any members of the commercial or insolvency communities who engage in such activities, and regard the subject matter of these conspiracies as immoral but not illegal, those individuals should expect, when they are apprehended, to face a lengthy sentence of imprisonment. The notion that the present conduct could ever be regarded as immoral but not illegal... is false.”

And, further down. “Mr Cranston appears still to believe that he and his co-conspirators have done nothing criminal.”

And then. “Tax fraud is a collective financial injury to the community. It is corrosive of our society. Tax evasion is not a victimless crime. It is a form of corruption. Taxes are the price we pay for a civilised society. The $105,625,304.36 stolen by the conspirators should have been available to pay for schools, hospitals, and, perhaps pointedly in this case... legal aid.”

And in the separate judgment on Jason Onley, the same judge put it in five words.

“It is theft. And tax evaders are thieves.” As at the date of this recording, the convictions of all five stand. Dev Menon and Jason Onley have filed appeals against their convictions. And no appeal has been determined.

Simon Anquetil, who pleaded guilty, appealed his sentence. In October 2025, the Court of Criminal Appeal dismissed it. His sentence stands.

28:06 The register, and what changed

So. Nobody can say we were not told. In June 2012, two years before Plutus existed, a report for the Fair Work Ombudsman described this exact structure. And warned that withheld payments, including pay as you go withholding, and superannuation, were being kept by the business.

Plutus ran for three years. A liquidation report found it.

And in February 2017, three months before the raids, two universities delivered a report to government with one recommendation at the top of it. Give every company director a registered identity number. So that nobody can hide behind somebody else’s name.

That is the thing that was designed to make this harder.

What happened afterwards. No parliamentary committee ever inquired into it. The Auditor-General’s report on phoenix activity was written while this case was in the courts. And does not mention it once.

Three senior tax office executives, who have never been publicly identified, were suspended without pay, pending an internal investigation. The outcomes have never been published.

And no agency has ever published what was recovered. Not the tax office. Not the federal police. Not the prosecutors. Nine years, and there is no public number.

Now the register. Director identification numbers commenced on the 1st of November 2021. Four and a half years after the recommendation. The deadline for existing directors was the 30th of November 2022.

By that deadline, the registrar said, more than 1.8 million directors had applied.

And around 700,000 had not. Nobody has published a number since.

Since then, the corporate regulator has prosecuted 11 people for not having one.

11. For a total of a bit over $40,000 in fines.

One of the 11 was a director of 27 companies. And the offence was not having the number.

One thing did change. On the 1st of July this year, payday superannuation started. Employers now have to get your super into your fund within seven business days of paying you. Instead of once a quarter.

It closes the gap this whole story lived in. It arrived nine years late. It was not driven by anything that happened here. And it does nothing at all about the tax withheld from your pay. Which is where the $105 million went.

In the first episode, nobody asked. In the second, nobody went and looked.

This time, it was written down. In 2012. In 2015. And in February 2017, three months before the raids, by two universities who said exactly what to do about it.

It took four and a half years to build the register. Since the deadline passed, 11 people have been prosecuted for not signing it.

And every fortnight, about 13.5 million Australian employees are handed a piece of paper that says somebody has taken their tax out, and passed it on.

It said so, on the payslip. Audit This. If this episode has raised anything for you, Lifeline is on 13 11 14. And Beyond Blue is on 1300 22 4636.