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'Disgusted, furious': contractors unpaid by Plutus react to ATO tax fraud scandal

Doug Dingwall

Published: May 19 2017 - 7:05PM

Canberra IT contractor Tim Cole thought something larger was afoot when Plutus Payroll failed to pay him $2500 it owed him in wages.

After learning on Thursday it was at the centre of a $165 million fraud scandal that has entangled a high-ranking Australian Taxation Office official, his first reaction was fury.

Contractors at public service departments were victims when the ATO froze Plutus' bank accounts in April, leaving its clients unpaid thousands of dollars.

As they learn their payment freeze was a sub-plot in a larger scandal, Canberra-based law firm Chamberlains is preparing to engage with aggrieved contractors and find out the size of their losses before possible legal action.

Mr Cole, out of pocket wages and $1500 in superannuation while Plutus pressured the Tax Office to unfreeze money earlier this month, was unable to work for several days when it became uncertain the payroll company had paid insurance.

"It's those intangibles that take a toll on you. I was really not in a good spot," he said.

After the ATO agreed on May 10 to let Plutus pay contractors, Mr Cole received his wages.

It is understood many were overpaid double and triple the sum owed.

Federal police have charged 10 people alleging the company was skimming off income tax it should have paid the government.

Alleged conspirators including Adam Cranston, 30, have been charged following an eight-month investigation.

"Funds paid by legitimate clients to service tax obligations were allegedly diverted by the syndicate for their own personal gain," the AFP said.

Mr Cranston's father and deputy ATO commissioner Michael Cranston has been issued a future court attendance notice for the charge of abusing his position as a public official, after he allegedly accessed restricted information on a Tax Office audit for his son.

ACT-based contractor Paul Johnston is still owed $4300 in superannuation, and before police arrested alleged syndicate members he was told by Plutus it would pay this before July.

Mr Johnston was less angry about the situation than disgusted by pictures showing alleged offenders living lavishly.

He had researched the company himself before learning of the AFP's allegations.

"What surprised me was the scale of it," he said.

"$165 million, it staggers me. Where did it all go?"

Chamberlains Law Firm could prosecute claims against directors and shadow directors of Plutus if a group action backed by litigation funders proceeded.

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