TWO men have been arrested following an Australian Border Force led investigation into allegations of large-scale customs fraud and alcohol smuggling totalling an estimated $28m.
The arrests followed the execution of search warrants on 15 properties in Melbourne and Sydney on 11 December as part of Operation Cabestro, which commenced in July 2019.
Officers from the ABF and Australian Federal Police seized a large amount of alcohol, close to $1m in cash, as well as a large number of items suspected to have been obtained through the alleged fraudulent activity.
At this stage, seized items include a number of designer watches and pieces of jewellery, gold coins and four luxury vehicles.
The ABF will allege that the men used a number of businesses to illicitly import, smuggle and export alcohol, and make fraudulent claims under the Duty Drawback Scheme.
The Duty Drawback Scheme enables exporters to obtain a refund of customs duty paid on imported goods where those goods will be treated, processed, or incorporated in other goods for export; or are exported unused since importation.
Since September 2019, it is alleged these individuals and businesses have been involved in a criminal group that has defrauded the Australian Government and Australian taxpayers of tens of millions of dollars in evaded duty.
While investigations remain ongoing, it is suspected that the total amount defrauded could be in excess of several hundred million dollars.
Assistant Minister for Customs, Jason Wood, said the Commonwealth government is actively targeting entities and individuals who engage in the black economy, and praised the collaborative efforts of the ABF, AFP and Australian Taxation Office on this investigation.
“The black economy penalises honest taxpayers, undermines the integrity of Australia’s tax and welfare systems and creates an uneven playing field for the majority of businesses that are doing the right thing,” Mr Wood said.