Australian “securitisation king” charged with fraud and tax offences
John Kinghorn, the founder of one of Australia’s largest mortgage securitisation businesses, has been charged with Commonwealth fraud and tax evasion offences. The Australian Federal Police (AFP) confirmed this morning that they have charged the 76-year-old founder of RAMS Home Loans with criminal offences following an eight-year investigation into an alleged A$30 million offshore tax evasion scheme.
The AFP opened its investigation into Kinghorn in June 2009. The investigation centred on the ownership of two offshore companies: Kalomo Pacific Leasing and Kalomo Corporation Limited. Both companies were registered in Jersey and dissolved on October 1, 2008.
RAMS was floated on the Australian Securities Exchange (ASX) in July 2007, generating an estimated A$650 million profit for Kinghorn. Prosecutors will allege that Kinghorn fraudulently concealed his beneficial ownership and control of the two offshore companies, which avoided tax obligations of more than A$30 million.
Kinghorn has also been charged with dishonestly influencing a Commonwealth public official by telling the Commissioner of Taxation between March 2004 and March 2007 that he did not control Kalomo Corporation.
AFP officers served Kinghorn with a court order regarding the alleged Commonwealth fraud offences earlier this month. He appeared in court this morning charged with one count of dishonestly influencing a Commonwealth public official, contrary to section 135.1(7) of Criminal Code 1995, and one count of defrauding the Commonwealth, contrary to section 29D of the Crimes Act 1914. Kinghorn has pleaded not guilty in relation to the charges.
Neil Gaughan, AFP Assistant Commissioner, said the investigation was complex and involved cooperation between the Serious Financial Crime Taskforce and various international agencies.
“Serious financial crime poses a threat to Australia’s economy, financial markets, regulatory frameworks, superannuation and tax system,” Gaughan said. “Commonwealth fraud offences have a significant impact on the Australian public. Every dollar represents funds that could have been put to use for the benefit of the whole community.”
The Serious Financial Crime Taskforce is a multi-agency effort targeting serious financial crime in Australia. The taskforce operates within the Fraud and Anti-Corruption Centre, which is housed within the AFP. Offences targeted by the taskforce include cases of serious fraud, money laundering and Commonwealth fraud offences.
Since the taskforce was established in July 2015, more than 614 audits have been completed and A$408 million in unpaid tax has been raised. Four people have been jailed as a result of successful prosecutions and there are 26 criminal, civil and intelligence matters underway.
“This result should serve as a warning that we will use every capability at our disposal to bring allegations of fraud before court,” Gaughan said.
Published 31-Oct-2017 by
Nathan Lynch, Regulatory Intelligence
Produced by Thomson Reuters Accelus Regulatory Intelligence
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