A TikTok scam has tried to hit the Australian government for nearly $5 billion after users latched onto a way to extract millions from taxpayers via GST fraud.
Cyclists, youth crime gangs and social media users have all piled on the company’s fake racket after the details went viral on TikTok.
They stole more than $1.6 billion from government coffers before the alert was raised and the Australian tax authorities intervened.
Some have attempted to scam more than $100,000 in a single bogus GST claim, with the average offender total rising from $20,000 to begin with to its current level of $80,000.
More than 100 people have now been charged and another 56,000 given notices of compliance under Operation Protego which was launched in April last year.
“This was an unprecedented threat that proliferated via social media,” the ATO admitted to Daily Mail Australia.
A TikTok scam tried to hit the Australian government for nearly $5 billion after users latched onto a way to squeeze millions from taxpayers via GST fraud
Bikies gangsters, youth crime gangs and social media users have all piled on the company’s fake racket after details went viral on TikTok (pictured, armed police stand guard after an ATO raid )
The Australian Revenue Authority said the cost to taxpayers had skyrocketed since the investigation began and they were now seeking to repay the government $1.9 billion, including penalties and interest.
Investigators managed to block another $2.7 billion worth of additional bogus claims, but the ATO is bracing for even more in an attempt to sneak through more bogus bills.
The rort is remarkably simple to stage but has serious consequences for those caught cheating the system, with several already jailed for their false claims.
It quickly spread on TikTok as a viral ‘government loan’ free money hack and involved applying for an Australian business number and registering for GST.
The scammers would then simply falsely claim that they had spent huge sums on equipment and supplies for their business and then claim 10% of the total as GST.
The tax office would then pay the GST “expense” to the business, expecting to recoup the GST money on the business making the claim.
But many of those making the bogus claims were either unemployed or actually running no business, meaning the ATO never got its money back.
The government website warns users applying for an ABN: “Not everyone is entitled to an ABN.
“You may face prosecution or criminal charges if you apply for an ABN, register for GST, and claim GST refunds when you are not entitled to them.”
The warning hasn’t stopped thousands from trying, mostly in western Sydney after the scam went viral in 2021 when the hack spread across TikTok and among biker gang members.
TikTok user Jitsycat (pictured) has warned others of the dangers of trying the GST scam
Other TikTok users have now taken videos warning people not to get involved in the scam, with one warning: “I thought that was pretty self-explanatory…
“But GST fraud is illegal no matter what people say on TikTok. It’s not financial hacking, it’s tax evasion. You can not do that.
“I’m really confused as to how this all happened, but I guess we’ll see more.
“There are actually ATO raids, which is quite significant. The ATO actually has a lot of powers that a lot of people don’t know about.
“GST Fraud? No, no – you can’t do that. You will go to jail.
Banks say they warned the ATO in 2020, according to the FRGbut concerns were ignored and thousands of false claims poured in, with $1.6 billion paid out.
The crooks are also being sued for an additional $300 million in penalties and additional interest on unpaid tax, according to the ATO.
The banks say they tried to take action themselves and froze the accounts of customers suspected of making false statements.
They told the AFR they had taken action after witnessing clients on social assistance suddenly being paid huge sums by the tax office – but apparently had no reaction from the ATO when they allegedly tried to alert them.
“We informed the ATO, and they wanted nothing to do with it,” a bank executive told an adviser, AFR reported.
The ATO hit back at the claims on Monday, telling Daily Mail Australia: ‘We took immediate action.
Crooks stole more than $1.6billion from government coffers before the alert was raised and Australia’s tax authorities cracked down on a series of raids and arrests (pictured)
More than 100 people have now been charged and another 56,000 given notices of compliance under Operation Protego which was launched in April last year.
Investigators managed to block another $2.7 billion in additional bogus claims, but the ATO is bracing for even more to try to sneak through more bogus bills.
“We became aware of an increase in recommendations from banks at the end of 2021, which intensified in the beginning of 2022.
“As a result, we have prioritized and taken compliance action against over 56,000 perpetrators,” an ATO spokesperson said.
“In conjunction with the Serious Financial Crime Task Force and law enforcement, over 100 alleged perpetrators have been arrested, including members of outlaw motorcycle gangs, organized criminal organizations and youth criminal gangs.
“More than 10 people have already been convicted for their involvement in this activity. We continue to fight this fraud with the full force of the ATO.
The spokesperson added: “We have stopped paying out $2.7 billion to fraudsters.”
“We continue to pursue those who committed this fraud and to collect debts which carry penalties and interest.
“We also continue to monitor the tax agents who facilitate the participation of customers in this fraud.
“We expect any tax or business reporting agent who becomes aware of a customer who has participated in fraud to notify the ATO immediately.”
