Anthony Rains
Anthony Rains is a former Queensland Police Service officer, who was allegedly under investigation for misconduct.
Mr Rains, despite lacking formal qualifications, joined the ATO as a criminal investigator. His responsibilities include conducting investigations and preparing evidence briefs. While he does not have the authority to lay charges, his primary role is to investigate potential offences against the Commonwealth.
The allegations as reported, a common theme of behaviour engaged in, Mr Rains lays criminal charges without authorisation, fails to hold the sufficient evidence to substantiate the charges, suppresses relevant evidence that exculpates the charges, and interferes with witnesses.
Mr Rains has improperly initiated multiple prosecutions, filing criminal charges against taxpayers in the Magistrates Court without obtaining the necessary written legal approvals. As reported and alleged, Mr Rains is an ATO officer gone rogue taking matters into his own hands unleashing a destruction on taxpayers.
In cases of suspected crime, certain protocols must be adhered to: senior approval is necessary, a summary of evidence needs to be compiled, and it must undergo an independent review by the Commonwealth Director of Public Prosecutions (CDPP) to assess its suitability for prosecution before proceeding with any further steps.
Criminal charges dismissed
Two taxpayers filed criminal charges against Mr Rains for crimes alleging perjury, fraud, making false allegations, and dissemination of taxpayer protected information, however was dismissed by the Brisbane Magistrates Court on the ‘demand’ of Mr Rains’ lawyers prior to any evidence being led. The significance, the court in these circumstances has allowed Mr Rains to walk free without being held accountable, and without the matters proceeding to a trial by jury. Complaints are being made against the Magistrate to the CCC in Queensland.
The CDPP possesses evidence that Mr Rains has engaged in perjury, sworn false affidavits, concealed evidence, and inflicted multi-million dollar losses on his taxpayer victims. Despite this, the Commonwealth Director Ms Sharp has unjustly refrained from taking any action against Mr Rains.
Senior ATO executives including former Commissioner of Taxation Jordan and now Mr Heferen, is aware of the allegations relating to the crimes committed by Mr Rains, however they have chosen to be silent taking no action against Mr Rains, enabling his conduct. Mr Rains remains gainfully employed at the ATO with full pay.
Information So Far
Mr Rains has targeted and laid charges against three taxpayers, Jae, Donna and Lisa, it is suspected more victims will come forward.
Jae’s prosecution was eventually discontinued, but tragically, not before his sister took her own life. She faced relentless and unjustified harassment and oppression from the ATO for many years. Her personal bank accounts were garnished, leaving her without the means to survive.
Jae was prosecuted for allegedly engaging in fraud by falsely claiming excise tax discounts for his beverage company in the sum of $250,000,000. Jae’s company Divas filed proceedings in the Federal Court to obtain a ruling against the ATO. Mr Rains was engaged to launch an attack on Jae and his company to interfere with his ability to defend the allegations. Divas succeeded in the Federal Court against the underhanded tactics of the ATO.
Jae faced prosecution for allegedly committing fraud by falsely claiming tax discounts totalling $250 million for his beverage company. In response, Jae’s company, Divas, initiated legal proceedings in the Federal Court seeking a ruling against the ATO. Mr Rains was involved in efforts to undermine Jae and his company’s defence against these allegations. Despite these challenges and setbacks, Divas achieved success in the Federal Court, overcoming the ATO’s underhanded tactics.
Donna’s charges were initiated by Mr Rains, who orchestrated her pursuit by international police after falsely swearing an affidavit to claim a false debt, enabling her extradition to Australia. Mr Rains pursued Donna relentlessly until she was imprisoned in Canada and subsequently extradited to Australia, leaving her without personal belongings in a Brisbane prison. Allegedly, fraudulent Director Penalty Notices (DPNs) were issued by the ATO without having the statutory authority to do so, and the owed superannuation remained unpaid.
A DPN is a legal document issued by the ATO to a director of a company. The purpose of the director penalty notice is to inform the director/s that they are now personally liable for the tax debts of the company. Donna was served with fabricated debts in excess of $7.0M. You can read more about Donna’s story here…
Charges against Lisa were filed by Mr Rains, accusing her of attempting to defraud the ATO concerning an R&D tax claim. Mr Rains alleged the R&D activities were fabricated with no substantial basis. To secure a conviction, Mr Rains and the CDPP allegedly withheld evidence supporting the R&D, including filed patents and investor collaborations. You can read more about Lisa’s story here…
So what are the safe guards in place to protect taxpayers against misconducting ATO employees? Absolutely nothing. The abuse and unlawful prosecutions can happen to anyone.
Commonwealth Director Sued for Fraud
Ms Sharp, the Commonwealth Director, is being sued for alleged fraud, as alleged, accused of concealing evidence in a prosecution initiated by Mr Rains for the primary purpose of obtaining a judgement in her favour. According to the public records, both the CDPP and ATO have withheld crucial evidence related to the case currently before the District Court and the Queensland Court of Appeal.
The proceedings are on foot in the Supreme Court of Queensland matter: Clark v CDPP 15212/2024.
A previous Commonwealth Director Ms McNaughton is also being sued for malicious prosecution, it is time for the Attorney-General Mr Dreyfus to clean up his office.
Complaints have been made to Mr Dreyfus however, he refuses to take any action for the conduct of the ATO and CDPP.
ATO Investigations and Prosecutions
There is a process in place, but unfortunately, no controls exist to prevent rogue criminal investigators from initiating prosecutions without written approval. Prosecutions should be initiated by the Commonwealth Director of Public Prosecutions (CDPP), not by criminal investigators. For more information on the powers, limitations, and process, please visit the “ATO Information Gathering Powers” section click here…
Criminal investigations function has been performed within the ATO area known as Serious Non-Compliance (SNC).
The ATO has its own guidance for their staff, such as the ATO’s Chief Executive Instruction CEI 2014/05/09 on Tax Crime[1] and External Fraud and the ATO’s Corporate Management Practice Statement PS CM 2007/02[2].
The relevant parts of the ATO dealing with taxpayer audits are mainly segregated by a mixture of taxpayer market segments and revenue types. For income tax-related matters, including the ‘Research & Development Tax incentive, would have the primary responsibility for managing the client enquiries resting with the other non-SNC part of PGH with regard to private group client engagement.
Under the working arrangements between the agencies involved in law enforcement functions, the CDPP in some cases delegates Agency Heads (such as the Commissioner of Taxation) with authority to conduct some criminal prosecutions on certain types of matter, like undefended quasi-regulatory offences of strict liability.
Other, more complex, matters involving questions of intent/mental elements or where the defendant to the relevant charges raises a substantive defence would then still need to be undertaken by the CDPP, albeit with input from the officers of the referring Agency.
The ATO guidelines for management of the criminal investigation referral and management processes are stored on the ATO intranet website and in Siebel case management system work practice instructions.
In line with other policies and procedures of the ATO, the design of the criminal investigation process for suspected tax crime is predicated on the concept of operational functional separation, in that no one officer should be able to single-handedly decide to:
- Initiate a criminal investigation on a potential candidate,
- Make a referral of a brief of evidence to another law enforcement agency regarding such a candidate, or
- Initiate a criminal prosecution for charges against such a candidate.
In addition, the actual selection of candidates for potential criminal investigation has come to generally be made through a forum of several senior officers, who consider the cases being referred for such investigation to determine whether they should be investigated and to assess their relative priorities.
This separation is generally accepted across investigative agencies, such as the approach articulated in the Australian Government Investigation Standards (‘AGIS’) 2011 (which applied to Commonwealth agencies [including the ATO] at the relevant points in time the ATO actions are conducted, which stated[3]:
2.3 Accepting matters for investigation:
- The agency should appoint positions responsible for making decisions regarding the evaluation and acceptance of investigations. It is recommended that these positions are at the SES level, where responsibility can be delegated to other employees.
- Agencies may form a committee to inform and oversight the decisions and recommendations following the initial evaluation process.
- Agencies that receive referrals or identify conduct as allegedly, apparently or potentially breaching the law requiring immediate actions, may form committees to oversight decision making regarding the responses taken.
Where cases involving suspected breaches of criminal law are referred for external prosecution, the referral would normally include witness statements or affidavits from the ATO criminal investigators and other relevant ATO officers connected with the underlying ATO audit enquiries and/or ATO lodgement or debt workflows for associated taxpayers – to set the context for the proposed charges to be considered by the investigative agency or prosecuting authority to whom the matter was being referred.
The Referral Process
In cases that are complex, serious, or likely to involve defences, the criminal investigations team prepares a brief for the CDPP to initiate prosecution, allowing the CDPP to exercise their prosecutorial discretion.
More complex issues are often referred to the Australian Federal Police for investigation, either independently or in collaboration with the ATO. These investigations sometimes occur through formal taskforce arrangements facilitated by regulations between the agencies.
Risk of Contamination
The risk of cross-contamination between the criminal investigation process and the ATO’s audit and administration processes is significant. To address and manage these risks, the ATO has implemented criminal investigation structures and procedures designed to effectively mitigate cross-contamination between criminal and civil/tax audit processes.
These guidelines are stored on the ATO intranet website materials and in the Siebel case management system procedural instructions that variously required ATO officers not to mix the purposes between those two statutory contexts (criminal and civil jurisdictions must be kept separate to prevent cross contamination).
A project aiming at multiple cases may inadvertently use materials accessed improperly for the wrong statutory purpose. This can lead to the replacement of individual case officers or, at times, entire teams involved in a case or project, due to their inappropriate access to restricted materials. Such situations arise when information intended for civil audits is improperly shared with criminal investigations, which is not permitted by law.
The organisational structure within the ATO requires operational separation being a necessary feature of the governance and internal control system for both the investigative function and for the prosecutions function. Refer to AGIS [3].
What is clear, these procedures are not being adhered to. ATO civil audit are unlawfully sharing information to criminal investigations for use which is not permitted by law.
Group Think and Cognitive Bias
One of the adverse consequences of overly close working relationships between criminal investigators and civil auditors is the potential for each to reinforce cognitive biases in the other function, with consequent loss of objectivity, leading to negative impacts on decision making on both sides of the organisational divide.
The risk of overly close working relationships can lead to unauthorised and unlawful information sharing, creating significant issues for both the ATO and targets of criminal investigations and audits involving suspected criminal activity.
Auditors face significant challenges in disregarding or omitting prohibited information, which often results in the inadvertent inclusion of such details, whether directly or within the audit’s context. This information sharing can compromise the integrity of the criminal process, as impermissibly shared data from coercive powers may undermine public policies that uphold a fair trial and the privilege of self-incrimination.
There are restrictions on how the ATO access information, such as search warrant materials under 3ZQU of the Crimes Act 1914. The ATO cannot rely upon such materials for the purpose of making a tax assessment, as published in the decision of Bai v Commissioner of Taxation [2015] [4]. For more information relating to restrictions on the use of materials gathered through the Commissioner’s compulsory information-gathering powers see tab “ATO Information Gathering Powers“.
Uncovering cross-contamination can be incredibly challenging, as evidenced by some victims’ experiences. The ATO often takes significant measures to hide the unlawful sharing of information. In one instance, it took six years to reveal the unauthorised access and spread of information that resulted in contamination.
Sharing information with criminal investigations can prejudice a taxpayer’s right to silence and a fair trial.
For further understanding of the criminal investigations process and information gathering powers of the ATO, see page “ATO’s Information Gathering Powers“.
National Anti-Corruption Commission (NACC)
Many complaints have been made by taxpayers to the NACC since commencing in July 2023 about the corrupt conduct of the ATO, without any action.
The documents submitted to the NACC present evidence of several crimes, such as bribery and perjury. Allegedly, Mr Morrison used public funds to halt an investigation into the corrupt activities of the ATO. You can read about Mr Freeman’s story here….
It is time for the NACC to be privatised, because it is clear the government agency is another ineffective waste of taxpayer funds used to bury evidence of misconducting public officials.
References
[1] https://iorder.com.au/publication/Download.aspx?ProdID=1-61TLIDZ-P1
[2] https://iorder.com.au/publication/Download.aspx?ProdID=1-6EBAO2K-P1
[4] Bai v Commissioner of Taxation [2015] FCA 973, [69]