The ATO has jailed four more GST fraudsters and is now warning real businesses about new schemes involving fake invoices and inflated refund claims.
The Australian Taxation Office isn’t messing around when it comes to GST fraud. Recent sentencings and new warnings show they’re ramping up efforts to catch fraudsters, and the message is crystal clear: play by the rules, or face the consequences.
The ATO’s Operation Protego has been busy. Four more individuals were recently sentenced for GST fraud, including some shocking cases that highlight just how sophisticated these schemes can get.
Take Kim Orense, who was sentenced to 18 months in prison (serving 10 months) after lodging 14 false business activity statements between October 2021 and April 2022. The result? He fraudulently claimed $214,011 in GST refunds for a house repair business that didn’t exist. When the ATO searched his home, they found no business records, invoices, tools, or equipment – nothing to suggest he was actually running the business he claimed.
His former partner Abigail Ussher didn’t fare much better, receiving 12 months imprisonment (serving 5 months) for claiming $117,297 in refunds for a crime scene cleaning business that was equally fictitious.
But here’s what might surprise you: two of the people sentenced were actually ATO employees. Former ATO employee Menuwarage Ranasinghe received 4 months imprisonment for obtaining $16,056 in fraudulent GST refunds, while former ATO contractor Baby Dee Zearwie got 8 months for obtaining $87,649.60 in fraudulent refunds.
ATO Deputy Commissioner and Serious Financial Crime Taskforce Chief John Ford was clear about the betrayal of trust: “We expect all staff to act with the highest levels of integrity and these individuals violated the trust placed in them by the community.”
Operation Protego’s impact has been massive. According to the ATO:
- More than 57,000 alleged offenders have been targeted
- Those involved have been hit with around $300 million in penalties and interest
- 122 people have been convicted as of June 30, 2025
- Jail terms have reached up to 7 years and 6 months
- The ATO has finalised 64 investigations and referred 54 briefs to prosecutors
While Operation Protego tackled fake businesses created through social media promotion, the ATO is now warning about a different type of fraud that’s particularly relevant to legitimate small businesses.
Assistant Commissioner Adam O’Grady revealed that GST fraud is now “predominantly within the property and construction industry” but is showing “early signs of it proliferating in other industries, particularly by privately owned and wealthy groups.”
This isn’t about fake businesses anymore – it’s about real businesses creating fraudulent invoices to inflate their GST refunds. The ATO has released Taxpayer Alert TA 2025/2 to warn businesses about these concerning arrangements. The schemes they’re seeing include:
- Entities claiming GST credits for construction costs of industrial buildings that never happened
- Claims for intangible services like ‘management fees’ that were never provided
- GST credits claimed for property acquisitions before they actually occurred
- Multiple entities claiming GST credits for the same invoice
- Completely fictitious invoices
O’Grady warns that these schemes are often “dressed up and sold as clever schemes with a figleaf of technical analysis – but any scheme which generates GST refunds through paper shuffling is likely to be ineffective at best, and civilly and criminally actionable fraud at worst.”
His advice? “If it’s too good to be true, it probably is.” The ATO isn’t just issuing warnings – they’re taking action. Businesses caught engaging in GST fraud face interest charges, penalties, fines, prosecution, and referral to the Commonwealth Director of Public Prosecutions. O’Grady emphasizes that this behavior “is simply not fair” and provides “an unfair advantage over honest businesses.”
What this actually means for your business
If you’re running a legitimate small business, this crackdown is actually good news. It levels the playing field by ensuring fraudulent competitors can’t undercut you through illegal refunds.
However, it also means the ATO’s scrutiny is intensifying. Make sure your GST claims are properly documented, genuinely related to your business activities, backed by legitimate invoices and receipts, and accurately reported on your BAS.
The ATO offers a key pieces of advice: If you’re involved in questionable GST arrangements: Make a voluntary disclosure rather than waiting for the ATO to contact you. Early cooperation may reduce penalties.
The ATO’s message is simple: GST fraud won’t be tolerated. With advanced fraud detection capabilities, partnerships, and risk models all working together, they’re staying ahead of fraudsters.
For legitimate small businesses, this means playing it straight is more important than ever. But it also means you’re competing on a more level playing field against businesses that might have been cheating the system. As O’Grady puts it: “Most businesses do the right thing.” Make sure yours is one of them.
For more information about Operation Protego and recent sentencings, visit ato.gov.au/protego. The full Taxpayer Alert TA 2025/2 is available on the ATO website.
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