Adam Cranston has denied that he conspired to defraud $105 million from the tax office, saying he believed Plutus Payroll was above board when he acquired the business in 2016.
When his company Synep took over Plutus for $5 million in June 2016, Cranston says he was assured the firm was profitable and remained unaware that PAYG and GST payments had been siphoned off which were supposed to go to the Australian Taxation Office.
At a NSW Supreme Court trial on Wednesday, Cranston’s barrister John Stratton SC said any illegally diverted funds were only discovered well after the acquisition.
Cranston claims he believed Plutus could not pay back taxes legally owed because large sums of money had been embezzled by one of the company’s masterminds Peter Larcombe, now deceased.
Plutus was also the victim of extortion and blackmail in February 2017 by former employee Daniel Rostankovski and members of an outlaw bikie gang, Mr Stratton said.
“That threatened Adam Cranston and others involved in the management of Plutus with threats of actual violence.”
His sister Lauren Cranston denied being involved in or aware of any conspiracy at Plutus, telling the jury that she was a simple employee at the firm.
“She was not part of any conspiracy, she did not know about it, she did not promote it, and she did not participate in it,” said her barrister Troy Anderson SC.
She claims she was just following instructions from her brother and two other accused Jason Onley and solicitor Dev Menon.
Mr Anderson said his client believed Plutus was a successful business and was aware of allegations money had been taken by Mr Larcombe and others, but did not question what was going on.
“Lauren Cranston is not someone with a curious mind. She would turn up, she would do her job, she would be paid, she would bitch and moan about her bosses, she would go home,” Mr Anderson said.
Menon argues he gave legal advice to clients like Adam Cranston during astonishing and unique events like the blackmail, but that he played no role in any conspiracy.
“In the course of practice, a solicitor may be called upon to advise and act for all manner of client, good, bad or indifferent, honest or dishonest, and a solicitor is not called upon to sit in judgment beforehand on his client’s conduct,” said Menon’s barrister Peter Bruckner.
Menon’s reference to “the biggest tax fraud in Australia’s history” during a January 2017 phone call described Mr Larcombe’s embezzlement rather than any conspiracy alleged by the prosecution, Mr Bruckner said.
Onley, who was a competitive snowboarder, said Plutus appeared to be a profitable business when it was acquired by Synep, where he was a director.
Onley believed advice from Menon and his firm Clamenz Lawyers that Plutus was not engaging in any criminal activity regarding tax, barrister Russ Johnson told the jury.
The fifth accused Patrick Willmott also says he was unaware of any conspiracy and that he was merely an employee of the company.
Barrister Luke Brasch said Willmott left Plutus in May 2016 after he and Mr Larcombe were accused of stealing funds from the firm. Willmott denies the allegations.
All five have pleaded not guilty to two charges of conspiring to defraud the ATO and agreeing to deal with the proceeds of crime. Over $105 million in PAYG and GST payments was allegedly diverted from the tax office and instead used for fund lavish lifestyles for the co-conspirators including the purchase of cars, homes and planes.
The hearing in front of Justice Anthony Payne continues.