Commonwealth Director of Public Prosecutions

Brisbane man jailed for identity theft and income tax fraud

Year: 
2018-2019
Category: 
Fraud
Location: 
Queensland

On 4 October 2019, Ryan McCarthy (27) was sentenced in the Brisbane District Court to 5 years imprisonment with a non-parole period of 18 months for placing false job advertisements online and stealing the identities of job applicants in order to lodge false income tax returns. He was also ordered to pay reparations of more than $167,000.

Between August 2015 and July 2016, Mr McCarthy created online job advertisements using the names of both legitimate and fictitious companies. Job seekers would apply for these positions and submit their CVs, which would typically include their full name, address, date of birth, phone number, and email address.

Mr McCarthy would telephone the applicants and conduct phone interviews using various aliases. He would then email the applicant offering them the job and asking them to provide further details, including their driver’s licence, bank account details, and tax file number.

He then used this information to assume the identities of some of his victims, and lodged 62 income tax returns online, resulting in refunds being credited to bank accounts he controlled.

Investigation uncovers the fraud

Many of Mr McCarthy’s victims reported their suspicions to the Australian Cybercrime Online Reporting Network (ACORN) after they realised the jobs they had applied for didn’t exist. The Australian Taxation Office (ATO) commenced an investigation in cooperation with Queensland Police.

Investigations identified 52 victims and discovered that Mr McCarthy had opened 63 bank accounts with 16 different financial institutions. Queensland Police also made inquiries into the phone services being used by Mr McCarthy, and found that a number of them were subscribed in the names of his victims.

Bank records confirmed that ATO refunds were deposited into the various accounts held by Mr McCarthy and that in the majority of cases the refund had been withdrawn shortly after it was deposited. CCTV footage revealed that Mr McCarthy had made four ATM withdrawals from two separate accounts, and that the withdrawals coincided with ATO depositing refunds for two of the victims into those accounts.

A total of $558,584.04 was illegally claimed by Mr McCarthy. Internal bank anti-fraud measures and efforts by the ATO and Queensland Police meant that $370,787.63 in illegal transactions were stopped. A total of $187,796.41 was paid into Mr McCarthy’s bank accounts.

The complexity of the offending meant that investigators from the ATO and Queensland Police worked with the CDPP for a year to prepare the brief of evidence for prosecution.

The prosecution relied on statements by the New South Wales Court of Criminal Appeal concerning similar NSW offences and the need to appreciate the impact of identity theft on victims.

Five of the victims in this matter provided victim impact statements to the court. They provided details of the stress and anxiety they experienced as a direct result of Mr McCarthy’s offences, particularly how he had played on their vulnerability while they were unemployed. In one instance a person showed up for his first day of work only to discover the job he thought he had won did not exist.

Sentencing 

In sentencing, his Honour Judge Koppenol DCJ said this offending was a “sophisticated example of serious fraud”, and described Mr McCarthy’s behaviour as “despicable”.

“You should not think, nor should anyone think, that behaviour of this kind is a victimless crime. It is not a victimless crime,” Judge Koppenol said. “Your fraud is a fraud on the revenue of our great country. It is therefore a fraud on our whole community. Your activities meant that money that might otherwise have been used for other purposes - community purposes, such as roads and other infrastructure, defence, education, health, welfare, was not used for that purpose but went into your pocket.”

Though he accepted that Mr McCarthy was remorseful, Judge Koppenol placed a great deal of emphasis upon the impact the offending had on the victims. 

“The sentence which I impose today … must serve not only as a punishment for you and a deterrent for you, but must also, in a general way, serve to deter those in the community who might consider acting in the way that you did,” Judge Koppenol said.

Summary of charges:

•    45 x Deal in identification information, contrary to s372.1 of the Criminal Code (Cth);
•    27 x Obtain financial advantage by deception, contrary to s134.2(1) of the Criminal Code (Cth);
•    33 x Attempt to obtain financial advantage by deception, contrary to s11.1(1) and 134.2(1) of the Criminal Code (Cth);
•    1 x Attempt to dishonestly obtain a gain, contrary to s11.1(1) and 135.1(1) of the Criminal Code (Cth).

Further information:

Listen to an ATO podcast about scams and how they affect Australian individuals and businesses, and tips on what to do if you’ve been scammed, ATO podcast – Tax inVoice, ep 13: Scams and identity protection.

Note: An ATO media release refers to Ryan McCarthy as Micah Robert Elstak – the defendant changed his name by deed poll several times, to aliases including Matthew Wright, Robert Ketting-Oliver and Micah Elstak, but was prosecuted by the CDPP as Ryan McCarthy.