More than 100 wealthy Australians, some of them high-profile, have netted tens of millions of dollars in ill-gotten gains through newly discovered links to a worldwide network of tax havens, the Tax Office claims.
ATO deputy commissioner of serious non-compliance Greg Williams said two Australians were under criminal investigation, while 65 others had been identified as ''high risk'' because they had each moved more than $1 million in or out of Australia without declaring the money in their tax returns.
The swoop is based on a database - obtained through the ATO's international information exchange network - of more than 2 million documents that show how thousands of people around the world use shell companies and trusts in tax havens Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands.
Mr Williams said he expected the number of Australians caught up in the probe to grow as the ATO swaps intelligence with its US and British counterparts.
''The message I've been putting out in recent times is that you think you can be clever and hide and that you are invisible in this particular system because you're dealing in some kind of offshore arrangement,'' Mr Williams said.
''The reality is that we are starting to see this and we can see you.''
After sifting through the data, the ATO is investigating a company in Sydney that has claimed millions of dollars in tax deductions for interest expenses on offshore borrowings. The ATO claims the loans are a sham because the offshore lender is actually controlled by the Australian company.
It has also launched an audit of a Melbourne man who claimed more than $25 million in share deals were carried out for offshore clients. The ATO believes the man was the real owner of the shares.
The ATO's database appears to be the same as one held by former Fairfax Media journalist Gerard Ryle's International Consortium of Investigative Journalists, which has published a series of reports linking secret offshore structures to individuals including a member of the Philippines Marcos dynasty, the Deputy Speaker of the Mongolian parliament and Brigitte Bardot's former playboy husband.
It is believed the data is a complex mix of spreadsheets, emails and other documents that required sophisticated software to analyse.
''It's our ability to then link that with Austrac [the government agency that tracks international money flows] data that really paints a full picture,'' ATO assistant commissioner for economic crime Paul Cheetham said.
Mr Williams declined to detail how the ATO gained access to the database but said it was obtained within the past 18 months and did not come from the ICIJ.
The ATO also has access to thousands of client records stolen by a former employee of Liechtenstein Group Trust, the wealth management arm of the European tax haven's royal family.
On Tuesday, Fairfax Media revealed that 70 Australians with income of more than $1 million a year paid no tax in the 2010-11 financial year.