Accused earned $3000 in 13 years, but finds $5m for bail
March 01 2008
Susannah Moran | March 01, 2008 of The Australian
AN art-loving company director who claims to have earned just $3397 in 13 years has been charged with laundering $30 million as part of the nation's largest tax fraud investigation, Project Wickenby.
Michael John Milne, 52, of Neutral Bay, northern Sydney, has been accused of using "fraud and intimidation" to get access to $30 million worth of shares - for a payment of just $1.
Mr Milne, whose wife yesterday raised a $5 million surety for his bail, was a client of Philip Egglishaw, whose Swiss firm Strachans sparked the $300 million Wickenby investigation.
Mr Milne has links to Glenn Wheatley, having sat on a board with the jailed music entrepreneur, who used Strachans to funnel income offshore.
And one of Australia's top law firms, Atanaskovic Hartnell, has been implicated in the scandal, with one of its former lawyers, Anne Harley, accused of telling a Swiss bank to destroy documents that were connected to the alleged transactions.
Ms Harley denied the allegation when contacted by The Weekend Australian.
Atanaskovic Hartnell partner Tony Hartnell is a former chairman of the Australian Securities Commission, forerunner to the corporate regulator the Australian Securities and Investments Commission.
Mr Hartnell said yesterday he could not make any comment on the allegations relating to a client of the firm, citing client confidentiality. But he said of Ms Harley's alleged behaviour: "No, I don't believe it, I just don't believe what is alleged to have happened."
Ms Harley no longer practises law. She said she did not know Strachans' Mr Egglishaw but had met Wheatley socially.
Project Wickenby is Australia's largest tax fraud investigation, involving officers from the Australian Federal Police, the tax office, ASIC, the Australian Crime Commission and the office of the commonwealth Director of Public Prosecutions.
Despite several ongoing court cases, Wheatley is the only person to have been convicted since the operation was established in 2004.
The AFP said yesterday Mr Milne's arrest was a warning to wealthy Australians who may be evading tax through offshore accounts. "I think it's a message to the big end of town today that everybody has to pay their fair share of tax," said AFP commander and manager of economic operations Warren Gray.
"I think that one would see this case as an appetiser to what's coming ahead."
Mr Milne appeared in Sydney's Central Local Court yesterday charged with four counts of obtaining a financial advantage by deception and one count of dealing with the proceeds of crime. He faces up to 25 years in jail if found guilty of the offences.
"There was $30 million in total ... those proceeds of sale of shares were returned back to Australia by a number of means, by a number of companies and entities controlled by the accused," Crown prosecutor Dean Jordan told the court.
A connoisseur of artwork who lives in a harbourside mansion owned by his wife, Mr Milne was granted bail after his wife agreed to a $5 million surety.
The AFP began investigating Mr Milne in August last year. According to a statement of facts tendered in court, in December 2006 Mr Milne lodged tax returns for 1995-2006 stating that his income for the period was $3397. According to the AFP, Mr Milne earned at least $2.7 million in consultancy fees in that time.
There is also the complicated series of offshore transactions that ended in Mr Milne allegedly removing $30 million worth of shares from a Swiss bank account and funnelling the money back to Australia through a number of companies - registered in tax havens - he is said to control.
Mr Milne's former friend and colleague Kim Goodall has told the AFP of Mr Milne's alleged actions. Mr Goodall is likely to be a key witness at any future trial, but it is understood he and Mr Milne had a serious "falling out" and Mr Goodall's credibility will be key to the proceedings.
Mr Goodall is chairman of stock market-listed software company Admerex. Mr Milne is a former director of the company.
The series of offshore transactions Mr Milne is said to be involved in began when a company called Clairmont Holdings and Finance bought a $7.9 million debt owed by Admerex for $1. Clairmont is registered in the British Virgin Islands, and its sole director is Urs Meisterhans, who is also a partner in a Switzerland-based financial services company called Sinitus. It is alleged that Mr Meisterhans ran overseas companies on Mr Milne's behalf.
Mr Goodall says that he had previously been told by Mr Milne that Ms Harley, at Atanaskovic Hartnell, was responsible for setting up overseas companies for Mr Milne. Atanaskovic Hartnell, which specialises in corporate and tax law, was raided by the AFP on Tuesday this week.
According to the court documents, Ms Harley in 2004 told a Swiss bank, SwissFirst, to destroy paperwork naming Mr Goodall as the sole signatory to an account and instead she forwarded the bank documents naming Mr Milne and Mr Meisterhans as signatories. According to the AFP, Mr Meisterhans then moved the $30million worth of shares to one of Mr Milne's companies.
Told of the document-destroying allegations, Ms Harley said yesterday: "I would never do that, I don't know anything about it." She denied setting up companies for Mr Milne for the purpose of money laundering or wrongdoing.