NZ raids over money laundering

An Australian expatriate living in Vanuatu will face charges over a $A100 million ($NZ119.4 million) money laundering scheme that police say could involve up to 400 people after raids involving New Zealand.

Raids were carried out on Monday in Australia, New Zealand and Vanuatu and Australian police warned more arrests will follow, including from the "higher end of town".

Robert Francis Agius, 58, a former Sydney accountant, was on Monday ordered to be extradited from Perth to Sydney to face charges of conspiring to defraud the commonwealth, conspiracy to cause a loss and to laundering a total of more than $A1 million.

The Australian Federal Police (AFP) told Perth Magistrates Court it will be alleged the father of three evaded up to $A13 million in taxes on $A100 million of his customers' business profits.

They say he has received $A1.4 million in commissions, through foreign bank accounts, since 2000.

It's alleged Australian customers would transfer money to accounts in Vanuatu and New Zealand, claiming them as a business expense.

The money would then be returned to Australia less commission in the form of a loan, and a repayment would be treated as a tax reduction.

Agius told the court he had been arrested on Monday at the home of a Perth friend, in front of his friend's child.

Commonwealth Director of Public Prosecutions (DPP) prosecutor Pauline Caust said since November 2000, Agius had set up more than 49 bank accounts in foreign company accounts, allegedly used to launder the money, before it was deposited back in his clients' accounts.

Agius had charged clients $A8,000, ad hoc fees of between 3% and 6% and annual US fees of $US1,350 ($A1,445), she said.

Agius allegedly used the companies of trusted friends, including the late Sydney accountant Owen T Daniel, to recruit clients.

Caust said 13 of 20 of Agius's clients had been audited so far.

She said Agius held at least five passports and had used false addresses on incoming passenger cards on flights to Australia because he did not want his Australian premises to be raided.

Company names incorporated in different jurisdictions, mainly the United Kingdom, Ireland, the Unites States, Vanuatu and New Zealand, were used by Agius to establish New Zealand bank accounts, Caust said.

Agius, who was not represented during Monday's hearing, admitted to having bank accounts in New Zealand but said he did not do business in Australia.

He described the charges he would face in New South Wales as "trumped up", facetious and "nebulous matters".

"The figures and the documentation just aren't correct," Agius said.

Agius told Magistrate Elizabeth Langdon he was not a resident of Australia and did not work in Australia or hold an Australian passport.

"Australia doesn't control New Zealand and it certainly doesn't control Vanuatu," Agius said.

But Langdon said given the seriousness of the allegations she would grant a warrant to extradite Agius so he could appear in court in Sydney on Wednesday.

The AFP said further arrests were expected, with up to 20 people being investigated.

A total of 400 people would be contacted by letter, asking them to come forward, because they had been identified as participants in the scheme.

"Those people we believe knowingly participated in not paying their share of tax and further, they were involved in this money laundering scheme. We expect to make quite a few more arrests," AFP economic operations commander Warren Gray said in Sydney.

"We're certainly concentrating on the higher end of town at the moment."

Police in Vanuatu said four businesses in the island nation were raided today but no arrests were made.

An AFP spokeswoman said 19 search warrants were expected to be executed in Vanuatu.

Three New Zealand premises were raided but no arrests were made, the spokeswoman said.

The New Zealand raids are believed to have been carried out at a bank, an accounting firm and a private residence.

The Australian Taxation Office (ATO) says it is also conducting 80 audits examining allegedly false tax deductions exceeding $A90 million.

"Anyone involved in these schemes is encouraged to come forward voluntarily and co-operate with the authorities," it said.

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