The Plutus Payroll case was a payroll tax scam to divert PAYG withholding owed to the ATO.
In this case, the operators of the scam took control of Plutus Payroll and its legitimate client base. The clients, outsourcing their payroll, would transfer funds to Plutus to pay the wages and salaries of their employees, with an amount expected to be withheld for PAYG. While wages and salaries, as well as a portion of the PAYG withholdings were paid, the remainder of the PAYG withholdings (often 40% or more of the amount owing by any company) remained with Plutus or was diverted to second tier companies run by dummy directors to protect the identity of the phoenix operators.
These dishonestly obtained funds were then transferred to the scammers through false invoices or other companies’ bank accounts.
The account balance and asset pools of the second tier companies were periodically drained, so that when the ATO initially came looking for the outstanding PAYG liabilities, it would wind up the companies to pay off the debt, and the scammers would lose a relatively small amount. Therefore, to protect and perpetuate the scheme, companies were rebirthed over and over (phoenix activity) to evade the ATO.
The Plutus Payroll scam raised approximately $165 million dollars between June 2016 and May 2017.
The scam moved from being a liquidation issue (that is, something a liquidator would deal with in terms of claw back) to a fraud and crime issue. The Australian Federal Police conducted a thorough investigation into the scam, and have since arrested the operators and some participants.
For more information, read this article from the Sydney Morning Herald on how the scam worked.