Gold fraud: $550m tax scam hits gold industry

whinfell

whinfell

Well-Known Member
Silver Stacker
Gold fraud: $550m tax scam hits gold industry

Nobody had dealt with the two mysterious men before, and they didn't like answering questions about their business.

But they bought a lot of gold. And they paid in cash.

The duo would fly around the eastern states and buy bars and coins by the kilogram, sometimes spending more than $100,000 at a time.

They'd move from dealer to dealer in a capital city, eventually collecting enough bullion to fill a carry-on suitcase. With dozens of gold traders in Melbourne, Brisbane and Sydney, there were plenty to choose from.

This was early 2015. After their week-long buying spree, they'd disappear again, only to do the same thing the following month.

Even for the murky world of private gold trading, a free-wheeling market prized by legitimate investors and criminals alike for its secrecy and lax regulation, these big cash transactions attracted a lot of attention.

Why? Because, since 2012, authorities have realised that the gold industry is at the epicentre of one of the biggest tax frauds in Australian history. They estimate it's already cost the public more than $550 million. And, despite an exhaustive, four-year investigation, it seems virtually impossible to stop.
Click to expand...

Full article: http://www.smh.com.au/business/gold-fraud-550m-tax-scam-hits-gold-industry-20160707-gq0s5f.html
 
... the murky world of private gold trading, a free-wheeling market prized by legitimate investors and criminals alike for its secrecy and lax regulation...
Click to expand...
Jeez, demonising private ownership and trading of gold!!!
 
whinfell said:
SilverPete said:
Why can't the GST loophole be fixed?
Click to expand...

How would you fix it? Charge GST on bullion? :/
Click to expand...
No idea, hence my question. What's the alternative, outlaw private ownership of physical gold and/or add significant regulatory and bureaucratic overhead?
 
Bullion Baron said:
What do you mean a broader issue SilverPete?

Presumably if there was no way for these dealers to claim the GST input credits for gold sold to them by individuals then 'playing the margins' no longer works.

It would mean that scrap dealers would just need to pay less for gold purchased, i.e. under spot instead of over it, if intending to refine the the metal.
Click to expand...
Not just scrap dealers, but also the big refiners seem to be caught up.
 
Also the fact that they are not naming names implies this involves the major industry participants. Who else would have the resources to fight a multi-year court battle against the ATO? (Of course, all this is assumptions based on the snippets of info we get in these stories.)
 
Bullion Baron said:
SilverPete said:
Not just scrap dealers, but also the big refiners seem to be caught up.
Click to expand...
Right, however I am not sure the refiners involved in these 'syndicates' would have additional loopholes to make use of if the margin play wasn't there for those selling the scrap (via use of the GST input credits by the scrap dealer). Probably need some further insight shared from those in the business who understand the GST rules inside and out.

SilverPete said:
Also the fact that they are not naming names implies this involves the major industry participants. Who else would have the resources to fight a multi-year court battle against the ATO? (Of course, all this is assumptions based on the snippets of info we get in these stories.)
Click to expand...
For those not aware of the earlier coverage it may be worth sharing this article again which does name some names.... http://www.smh.com.au/national/rive...xpayers-an-estimated-200m-20140712-3btv8.html
Click to expand...
Right, some names, but I think they are being very careful:

...claimed in the affidavit that Kukulka revealed to him that his industry buyer was prominent metals refinery EBS & Associates and federal agents had searched the company's offices as part of its investigation.

...The ATO has refused to identify companies and individuals facing criminal investigations and tax audits for privacy and operational reasons.
Click to expand...
 
Maybe the gubbermint should treat this issue like greyhounds -i.e ban the entire industry.
 
Bullion Baron said:
Silverthorn said:
Define scrap?
Click to expand...
In a broad sense it's just referring to gold which isn't in investment form.

However, I have read the affidavits tied to this earlier story (http://www.smh.com.au/national/rive...xpayers-an-estimated-200m-20140712-3btv8.html) and there were claims some bars were being bought by the scrap dealer in investment grade form and then defaced.
Click to expand...

That's the thing. Old jewellery is what is meant by scrap I would have thought, is a melted blob of gold scrap I wouldn't think so.
 
Hope Burke gets to sell his story to the media, it will be net resting to hear.
Plus what he gets from the Mehdi, could be used to payback any innocent suppliers owed money.
 
Silverthorn said:
.... melted blob of gold scrap I wouldn't think so.
Click to expand...

Depends, if it is a melted blob of mixed karat gold than scrap, if it is 999 blob with bullion marks defaced/filed off that it's debatable isn't it?
 
Silverthorn said:
Bullion Baron said:
Silverthorn said:
Define scrap?
Click to expand...
In a broad sense it's just referring to gold which isn't in investment form.

However, I have read the affidavits tied to this earlier story (http://www.smh.com.au/national/rive...xpayers-an-estimated-200m-20140712-3btv8.html) and there were claims some bars were being bought by the scrap dealer in investment grade form and then defaced.
Click to expand...

That's the thing. Old jewellery is what is meant by scrap I would have thought, is a melted blob of gold scrap I wouldn't think so.
Click to expand...

The news did not adding up....
Photos showing new bars in briefcase
Two guys running in suitcase :rolleyes: , who ??? The mask men???


How the media making up this news???

How the readers believe in this ???
 
Golden ChipMunk said:
Silverthorn said:
Bullion Baron said:
In a broad sense it's just referring to gold which isn't in investment form.

However, I have read the affidavits tied to this earlier story (http://www.smh.com.au/national/rive...xpayers-an-estimated-200m-20140712-3btv8.html) and there were claims some bars were being bought by the scrap dealer in investment grade form and then defaced.
Click to expand...

That's the thing. Old jewellery is what is meant by scrap I would have thought, is a melted blob of gold scrap I wouldn't think so.
Click to expand...

The news did not adding up....
Photos showing new bars in briefcase
Two guys running in suitcase :rolleyes: , who ??? The mask men???


How the media making up this news???

How the readers believe in this ???
Click to expand...

Lol, surely you realise the pictures are representation?

And readers believe it because it is likely to be happening.
 
Ipv6Ready said:
Golden ChipMunk said:
Silverthorn said:
That's the thing. Old jewellery is what is meant by scrap I would have thought, is a melted blob of gold scrap I wouldn't think so.
Click to expand...

The news did not adding up....
Photos showing new bars in briefcase
Two guys running in suitcase :rolleyes: , who ??? The mask men???


How the media making up this news???

How the readers believe in this ???
Click to expand...

Lol, surely you realise the pictures are representation?

And readers believe it because it is likely to be happening.
Click to expand...

Well then the news should put up scraps photos!!!
Also the figure did not add up.

We talking millions and how much scraps been sold??
Tonnes???
 
Bullion Baron said:
SilverPete said:
Not just scrap dealers, but also the big refiners seem to be caught up.
Click to expand...
Right, however I am not sure the refiners involved in these 'syndicates' would have additional loopholes to make use of if the margin play wasn't there for those selling the scrap (via use of the GST input credits by the scrap dealer). Probably need some further insight shared from those in the business who understand the GST rules inside and out.

SilverPete said:
Also the fact that they are not naming names implies this involves the major industry participants. Who else would have the resources to fight a multi-year court battle against the ATO? (Of course, all this is assumptions based on the snippets of info we get in these stories.)
Click to expand...
For those not aware of the earlier coverage it may be worth sharing this article again which does name some names.... http://www.smh.com.au/national/rive...xpayers-an-estimated-200m-20140712-3btv8.html
Click to expand...


One industry source said there simply isn't enough privately held gold in Australia to account for the volumes being traded, suggesting the same gold was being sold over and over again. ''Even if you melted down all the jewellery and fillings in the country there wouldn't be enough to cover the quantities involved,'' he said.
Click to expand...

Like I said , the figures did not adding up...
 
Well the government obviously want their cake and to eat it too ... on the one hand they are pushing little bullion companies out for allegedly not charging gst on their bullion sales (when the rules are vague as hell), then they are complaining about people claiming fake gst inputs.

Simplest solution surely is to BE CONSISTENT wrt charging gst for precious metals, either charge gst across the board for all bullion and live with the gst inputs (and potential scams) OR exempt all forms of bullion from gst and dont accept gst inputs from gold buyers/refiners. I know it obviously cant be that simple and would need some hammering out of the fine detail, but clear rules and guidelines would obviously help everyone.

And ok, you might only get 95% of spot if you sell to local gold buyer (or 40% of you go to one in the mall), but at least then there would be a level playing field for all.
 
You must log in or register to reply here.
Back
Top