A member of an alleged $144 million tax fraud syndicate who allegedly extorted the group flew into a rage, saying that Adam Cranston had "taken the f---ing cake for three f---ing years, eaten it [and] spat it in everyone's faces".
But new court documents reveal the syndicate agreed to pay the extortion money in return for a deed of agreement that was carefully designed to make the "straw" directors take the fall and allow the syndicate to continue their fraud.
"This is stitching up the directors, this is completely stitching them up," tax lawyer and syndicate member Dev Menon allegedly said in an intercepted phone call.
Nine people, including the son and daughter of former Australian Taxation Office deputy commissioner Michael Cranston, have been charged over the scheme that allegedly skimmed PAYG proceeds using a web of payroll companies run by "straw" directors.
A police affidavit, tendered in the NSW Supreme Court, reveals the bitterness that preceded the extortion and the way the syndicate believed it could make the blackmail fail safe.
On January 24, 2017, the ATO issued garnishee notices for $26.5 million in unpaid tax to several companies connected to the group. Penalty notices for $5.85 million were sent to straw directors.
The size of the notices made syndicate member Daniel Rostankovski, 24, and some straw directors realise they'd been underpaid so they extorted the group for $5 million, threatening to expose them in the media.
"I just felt like everyone had just lied to me and was just trying to throw me in the bin," he later explained to Mr Menon in an intercepted call on February 2.
Mr Menon said Adam Cranston was "upset" by the extortion but Mr Rostankovski replied he intended to give money back to Adam Cranston "to help him get his townhouse and cars back".
However, he was angry that the syndicate claimed it had no money left to pay the extortion fee.
He accused Adam Cranston of having his cake and eating it "for three f---ing years" and said some members had taken "a huge f---load of money" and didn't want to part with it.
Instead, the syndicate proposed that Mr Rostankovski take control of the scheme for five months.
He'd see "between 500 grand a week to a million bucks a week" coming in and it would be up to him to pay the PAYG liabilities, Mr Menon said.
"We're giving you all of the money ... but, you know, the tax has now become your responsibility too."
Mr Rostankovski arranged for his lawyer Sevag Chalabian to receive the PAYG money. In three months, it totalled $24 million.
Deeds were also drawn up by Mr Chalabian, effectively gagging the straw directors and making them responsible for tax debts. The deeds said they were directed by former syndicate member Peter Larcombe, who had committed suicide.
"Once they sign this, they'll be f---ing on the hook right?" Mr Menon said to Mr Rostankovski. "If the ATO gets their hands on them, they'll be f---ed ... Like, you know, they'll be facing charges and shit."
The syndicate intended for the straw directors to breach the deeds, which would allow Plutus to sue them, resulting in their companies being placed in liquidation.
"Having the ... companies and their tax debts written off would allow the continuation of the tax fraud scheme," the AFP alleges in the affidavit.
Mr Rostankovski has been charged with blackmail and being part of the fraud conspiracy. Mr Chalabian has not been charged.
