Author Neil Chenoweth said in his book Packer’s Lunch: “It is a truth universally acknowledged, that an Australian in possession of a good fortune must be in want of a Swiss banker . . .”

Unfortunately for Graham Richardson the banker to whom he was introduced by his old mate, the late bipolar afflicted Rene Rivkin, has sung like a canary to the Swiss authorities about their secret accounts.

The woes of Graham Richardson are a bellwether of how careful Australians investing overseas must be. Switzerland’s bank secrecy and numbered bank accounts are well known, as is the fact that the Australian Taxation Office has been having trouble using the Australian-Switzerland Tax Treaty to prevent Australian taxpayers using Switzerland’s banking system to avoid paying tax in Australia. It is in the detail of the tax treaty and the interaction of this treaty with Swiss criminal law that people like Richardson run into trouble.

This tax treaty works in favour of the Australian taxpayer if they remain outside the ambit of the Swiss criminal code, but works against them if someone connected to their financial advice commits an offence identifiable within this code.

Once an offence has been committed and identified, the interchange of information provision of the Australia Swiss Tax Treaty allows Swiss authorities to disclose all relevant details of the Australian taxpayer’s banking activities. Once this information is able to be made available, the full force of all relevant Australian legislation is able to be applied by our authorities.

There do appear to be two major breakdowns by Australian authorities involved in the Richardson case. It is alleged that Richardson’s share of money went as a $1.44m wire transfer from ANZ Bank Melbourne into an account at Bank Leumi in Zurich. Why didn’t this transaction catch the eyes of the Australian Transaction Reports and Analysis Centre (AUSTRAC), the federal government’s anti-money laundering regulator and specialist financial intelligence unit

AUSTRAC’s mission is to make a valued contribution towards a financial environment hostile to money laundering, major crime and tax evasion. However, on this occasion it looks like they fell asleep at the wheel. Or did AUSTRAC ignore the matter as it involved a high profile former government minister and thought nothing sinister?

Richardson is also fighting the Australian Taxation Office in the Federal Court regarding the $1.44m which the ATO says is his income. This case involves a serious allegation of straight out tax evasion involving indictable offences. So why isn’t Richardson being prosecuted by the DPP? We have seen how the Robert Gerard tax fiasco was improperly handled by the ATO and the DPP and now it appears that the same is happening with the Richardson case.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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