Court strips gold bullion fraudsters of $8.7m for GST scheme

The Supreme Court of New South Wales has made orders resulting in more than $8.7 million in assets being forfeited to the Commonwealth following a complex decade long investigation into a criminal syndicate.

The Australian Federal Police (AFP) led investigation lasted for 10 years and is known as the Criminal Assets Confiscation Taskforce (CACT), or Operation Nosean.

In February 2025 the assets of the two Sydney-based syndicate members were forfeited to the Commonwealth, which included four luxury Sydney homes worth almost seven million, four bank accounts containing more than two million, five ounces of gold worth $23,000 and almost $250,000 in cash.

Stefan Jerga, CACT head, said the forfeit of assets was a direct result of law enforcement cooperation and the tenacity of investigators.

“The nature of this crime was extremely intricate and took a significant amount of effort, time and commitment to untangle the web and identify the complex ownership structures set up to hide the true beneficiaries and wealth of these criminals,” he said.

“With the persistent work of all involved including the ATO, all partner agencies and the CACT’s forensic accountants, lawyers, financial experts and investigators, we were able to deconstruct and dismantle this illegal operation.”

In a joint statement, the ATO and AFP said the CACT investigation first began in 2012 with additional forces and resources from the Australian Border Force, Australian Criminal Intelligence Commission and AUSTRAC.

According to the statement, the investigation first came to light after intelligence highlighted the purchase of notably high quantities of pure gold bullion from a broker in Sydney.

It was suggested by the intelligence that the gold was being used for large-scale GST fraud, which came at the same time the ATO identified an unusual pattern of large GST refunds being paid to several gold refiners in Sydney and Melbourne.

“What subsequently emerged was the picture of an incredibly complex criminal operation that fit the definition of ‘missing trader fraud’. This involves the fictitious transaction of traded goods between companies with a chain to evade tax obligations,” the ATO said.

“In this case, the backdrop of the offending was Australia’s then gold bullion arrangements, which provided an exemption on the payment of GST for ‘investment- grade’ gold bullion – as distinct from ‘scrap’ gold, which was subject to GST.”

In the investigation it was found the crime syndicate fraudulently used the identities of foreign students and associates as mules to buy gold bullion from a broker, GST free. Each time the syndicate purchased the gold, it was melted down or defaced by the syndicate and refashioned into ‘scrap gold’.

The syndicate was found to have operated shell companies that would ‘purchase’ the scrap gold, pretending to be real buyers that paid tax on the gold. From there, the shell companies on-sold gold to a gold dealer, adding 10 per cent GST, which the syndicate would then claim.

In December 2023, the two Sydney-based syndicate members (A 49-year-old Neutral Bay man and a 57-year-old Ashfield man) were sentenced to eight years’ imprisonment, with a non-parole period of four years and six months.

Both men were sentenced to jail after being found guilty of two counts each of conspiring to dishonestly cause a loss to the Commonwealth, contrary to section 135.4(3) of the Criminal Code.

The ATO and AFP said the crime syndicate would then repeat this cycle which resulted in the group having fraudulently claimed tax refunds between 2012-2013 before the CACT investigation restrained their assets.

ATO deputy commissioner, John Ford, welcomed the CACT investigation result.

“This result shows that the consequences do not end at the conviction and should serve as a strong deterrent to those in the community considering similar behaviour,” he said.

“The ATO will continue to work with, and support, our partner agencies by sharing resources and capabilities to ensure those who break the law are held to account.”

Jerga added: “Our message to criminals is clear – no matter how complex or elaborate your systems or network, the AFP and its law enforcement partners will work to no end and no set time limit to find you, bring you before the courts and confiscate any proceeds of crime.”