A firm linked to an outlaw bikie gang used Australian Air Force fuel supplies in a diesel subsidy fraud that may have cost the Commonwealth millions of dollars, authorities have been told.
The latest allegations of large-scale and widespread fraud by organised crime groups against the federal government’s fuel tax rebates come after Fairfax Media revealed on Monday that Hells Angels bikies were accused of illegally cashing in on the tax-break program.
Farmers have complained about an alleged long-term fraud involving a NSW fuel supply firm with close links to the Rebels Motorcycle Club that has been supplying “diesel” that is up to 40 per cent impure.
Taxation and Customs investigators were called in the early 2000s to probe claims the company was using aviation fuel, legitimately obtained from the RAAF’s strategic reserve in Queensland, mixed with diesel fuel and sold to unsuspecting farmers and other rural businesses in northern NSW.
It is believed a tanker was placed under surveillance and followed from northern NSW to an RAAF supply depot outside Townsville, where it picked up a load of aviation fuel discarded by the military, and brought the kerosene back across the border to a “blending facility” to be mixed before sale.
Bikies from the Rebels gang would then act as muscle to intimidate farmers who complained of equipment destroyed by the adulterated fuel which was up to 40 per cent kerosene and 60 per cent diesel.
The outlaws would also act as debt collectors, standing over landowners or business people who refused to pay for the substandard product.
The victims of the alleged fraud were the Commonwealth government, which paid out millions of dollars in farm diesel subsidies for a substance that was not diesel, and the purchasers, who were often left with damaged tractors, utes and other equipment.
Despite the ATO and Customs investigation in the early 2000s – which failed to net any arrests or convictions – the illegal fuel blending is believed to be continuing today at sites on the NSW north and central coasts.
Over the years, it is alleged, the same group has committed diesel fuel subsidy fraud using other materials like electricity transformer oil or light-grade industrial waste oil.
Fairfax Media reported on Monday that a separate Australian Tax Office investigation had found outlaw bikies had used trucking companies in Adelaide to defraud the federal government of millions of dollars in fuel rebates.
But Tax Office insiders say there is compelling evidence of a much larger organised crime network with national reach that has used dozens of haulage firms to siphon tens of millions of dollars of taxpayers’ money into the pockets of motorcycle gang members.
The Commonwealth Director of Public Prosecutions, which has had a file on the Adelaide connection for more than 18 months, would not answer questions about the case.
In response to questions on Monday, the ATO provided a statement: “We are unable to provide comment on any taxpayer’s affairs given our obligations around confidentiality under the law.”