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Former ATO deputy commissioner Michael Cranston found not guilty

AUSTRALIAN BUSINESS REVIEW   February 15, 2019   Deborah Cornwall

An emotional Michael Cranston outside the Downing centre after being found not guilty today. Picture: John Grainger

Former deputy Australian Tax Office commissioner Michael Cranston collapsed into his wife’s arms sobbing at a Sydney court this morning after a jury found him not guilty on two counts of criminally misusing his position to help his son Adam.

Mr Cranston — who was once the public face of a crackdown on tax crimes by “high net worth individuals — closed his eyes and fought back tears as the NSW District Court jury handed down its verdict to cries of “Yes!” and cheers from his family and supporters in the public gallery. The gallery then erupted into laughter as he crawled under the handrail from the witness box to get to his wife Gloria.

The verdict follows 10 days of evidence before District Court judge, Robyn Tupman, over two charges Mr Cranston had dishonestly used his position to get information from two ATO assistant commissioners which he had then passed on to his son.

Outside the court, Mr Cranston was still clearly shaken, said he was off to celebrate with a beer.

“I’ve never felt like that in my life. I have never felt so emotional in my life I think, at least since my children were born,’ he told reporters. “I am just so happy that the justice system prevailed.

“I don’t know how people can go through this. Especially when you know you are innocent and you know things can go wrong. It’s a new start, all this is now behind me and I can just go forward.’’

But today’s verdict is by no means the end of the 40-year tax veteran’s personal and professional ruination.

Unbeknown to the jury, Mr Cranston’s son not only prevailed upon his dad to help him over some tax problems, it has been alleged he duped him into getting involved, unwittingly, in one of the country’s largest ever tax fraud stings.

Asked whether he had spoken to his son Adam since the verdict, Mr Cranston said he hadn’t, but he couldn’t comment other than to say he would always love his children, no matter what.

“It’s about a father and a son,’ he said.

“I love my children and I will always love my children … What can I say, you love your children and you will always love your children.”

The jury heard Adam Cranston had twice approached his father for help; first in January 2017, on behalf of his business associate, Simon Anquetil, a former director of the private company Plutus Payroll, which Adam had shares in and again in April after the ATO had frozen $46.6 of Plutus Payroll’s bank funds following a secret tax audit.

Mr Cranston, told the court he had initially grappled with the potential conflict of interest making inquiries on behalf of his son, but he said he said he ultimately felt “comfortable” seeking help from two of his subordinates because on both occasions he had disclosed his son’s involvement.

He said his son had told him up to 2000 subcontractors couldn’t be paid as a result of the ATO freeze, and he felt, quite apart from his son’s commercial interest in Plutus Payroll, he had a legitimate role to ensure the ATO didn’t get bad press over it.

What Mr Cranston didn’t know was that his son was about to be arrested over his alleged involvement with Plutus Payroll in one of the biggest tax fraud investigations in the country.

Adam Cranston and 11 others were charged in May 2017 on multiple offences they allegedly provided “free” payroll services for employers through Plutus Payroll, but siphoned off an estimated $157 million in PAYG tax through a sophisticated network of “dummy” companies.

Mr Cranston’s daughter Lauren was also charged at the time, but the charges were suddenly dropped in December last year.

No trial date has been set for the alleged Plutus Payroll fraud, but the Australian Federal Police have told the court much of the money appears to have been spent on luxury sports cars, planes, motorcycles, residential properties, jewellery, artwork and fine wines.

The Australian Federal Police have always maintained Michael Cranston had no knowledge of what his son was allegedly involved with. But details of the Plutus Payroll probe were deliberately withheld from the jury due to concerns it might unfairly influence the trial.

In closing submissions to the jury last week, Crown prosecutor Peter Neil SC, described the private and professional dilemma the former tax chief had found himself in. Mr Cranston, he said, had enjoyed a long, distinguished and “unblemished” career. But in the end his “close and affectionate” relationship with his son Adam had embroiled him in a “Shakespearean tragedy”.

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