The Gangland War (9 page)

ALMOST twenty years earlier, when the tax department completed a secret investigation into a drug dealer who had evaded
police for years, they hit him with a bill for $1,348,048.60. But instead of jail and certain financial ruin, the dealer was able to cut a deal.

The Australian Taxation Office ultimately negotiated a settlement of $440,000 as full payment for the period 1984—87. To the drug dealer, it was loose change. To the tax department, it was money in the bank.

The drug trafficker has long moved out of crime and is now a semi-retired — and semi-respectable — property developer in the moneyed area of Melbourne's north-west.

For decades, police have complained that the tax department has seemed happy to accept tainted money from crooks instead of using their powers to drain the gangsters' finances.

Many police considered tax officials to be revenue raisers rather than law enforcement officers, more interested in money than morality. With a few notable exceptions, it seemed, the pen pushers were reluctant to take on the drug pushers. Complex laws, which at times protected wealthy criminals who could afford to pay experts to conceal their wealth, did not help.

The tax office has traditionally pursued professional groups, the self-employed and small businesses, often choosing to ignore those who make their money through more nefarious means. On purely financial terms it makes sense. It is harder, and sometimes more risky, to track the assets of serious criminals than those of doctors, plumbers or schoolteachers.

The director of the Australian School of Taxation at the University of NSW, Professor Chris Evans, says the tax office concentrates on areas of evasion that generate large amounts of black money: ‘They make decisions where they can get the biggest bang for their buck.'

He says gangsters who hide their assets and deal in cash are not considered cost-effective targets compared with businesses that keep ordered records.

‘By the time their assets are identified they may be dead or have done a runner. I think sometimes they may be put in the too-hard basket,' he says.

But, in 2004, Treasurer Costello began to show obvious frustration at the underworld war that had broken out in his hometown. In a pointed message during a speech at Melbourne's Scots Church, he said: ‘I pledge that if federal tax authorities can assist in tracking and taxing the flow of money that sustains the lifestyles of these drug barons, then everything that can be done will be done. We stand ready, anxious to assist.'

Weeks earlier, he had said he was worried that many of Melbourne's underworld figures had become celebrities and were being glamorised by the media.

Costello told the authors soon after Mokbel fled that investigators and police would work together to nail gangsters. ‘These drug barons can expect to be hit harder under the Tax Act. Let us hope that they are hit even harder under the criminal law.'

Clearly, Costello was flagging the possibility of the tactics used by US federal authorities in the early 1930s to snare the mobster Al Capone, who had seemed immune from prosecution for his many criminal activities for years.

Back in the Prohibition era, the US Treasury Department charged Al Capone and other mobsters with tax evasion. Capone was convicted in 1931 and sentenced to eleven years, fined $50,000, hit with a back tax bill of $215,000 and charged $7692 in court costs. He was released from jail after serving seven years, six months and fifteen days, a broken and sick man. Syphilis can do that — even to seemingly tough guy gangsters. It would seem Al had needed a condom more than a bullet proof vest. He did not return to Chicago and died a ‘vegetable'.

Many criminals see jail as an occupational hazard. They view it the way a farmer sees drought — nasty, but at times unavoidable. The main aim is never to lose the farm. It is the police's aim,
now, to seize the farm. While arrests bring headlines, it is the methodical finding, freezing and seizing of assets that permanently damages organised crime groups.

‘Cut the assets and you destroy their power bases,' is the philosophy of Detective Superintendent Richard Grant, who was assigned to modernise police investigations into organised crime.

While the Victorian Government introduced tough new asset seizure laws, financial and legal advisers urged their gangster clients to put their investments in the names of trusted family members.

Police say they will work with the Tax Office to chase the money that in some cases has been hidden for years. One senior policeman once complained that he had personally told the tax department of at least $10 million in a criminal's hidden assets but still couldn't claim the suit he wore to work as a tax deduction.

The difference is that police are now employing specialists to identify the hidden assets of organised crime figures so that the tax office will receive detailed information on people that were previously undetected.

Up to 32 lawyers, forensic accountants, analysts and administrators have joined specialist units and the Victoria Police criminal proceeds squad to track the finances of organised crime suspects and police have pledged to set up three Purana-like taskforces.

If police can't get them, they will pass the information to the tax man. Evans says the tax office can assess an individual's lifestyle and likely income and then lodge a statement to that effect. It is then up to the target to prove that the statement's assessment is not accurate. Individuals found to have cheated the tax department can be charged under the Crimes (Taxation Offences) Act and face a maximum of ten years' jail and a $100,000 fine. In addition, they can be ordered to pay back taxes, be hit with punitive double taxes and face a punishing interest bill.

All of which was bad news for the likes of Tony Mokbel, top of the list of drug baron tax evaders. Just months before he disappeared he was hit with a $4 million bill for back taxes.

Police say Mokbel's power base was always purely financial. Take the money and the trinkets and he would just be a former milk bar owner with a wig.

The underworld war has shown the sort of money some of Melbourne's unemployed gangsters have been able to acquire — wealth that is often kept in the names of family, friends and ‘front' businesses. It can take the form of hidden cash, jewellery and luxury cars, as well as real estate.

Yet Mokbel tried to cry poor. He launched a failed court appeal to try to free assets frozen by police, saying he did not have enough money to support his lifestyle and to pay his lawyers.

But ‘poverty' is relative. When he was arrested (again) in 2005, he was carrying nearly $40,000 in cash and six mobile phones. Later that year, he was still trying to buy businesses, including a men's fashion label, on the understanding that others would front the companies.

The family's preference for cash again surfaced in 2006, when police seized $116,255 after they arrested Tony's brother Milad Mokbel on drug charges. Milad's home was put up as surety for Tony before he jumped bail.

Peter Costello has made it clear that Mokbel is not the only crook in the tax department's sights.

A study of some of the victims of Melbourne's underworld war shows that Mokbel was not the only gangster to revel in the lifestyle of the rich and infamous drug traffickers.

Michael Marshall sold hot dogs for a living. When he was shot dead in October 2003, he had a property portfolio worth around $1.5 million, including a double-storey house in South Yarra bought from a Melbourne surgeon in 1991. Marshall was only 26 when he bought the house yet was able to pay it off within three
years. Title documents show it had taken the surgeon many years to do the same thing. Saving lives does not pay nearly as well as ruining them.

Willie Thompson supposedly sold lollipops to nightclubs until he was shot dead in his expensive Honda sports car in Chadstone in July 2003. The former kickboxer and part-time actor listed his occupation as ‘company director' and he had $245,000 in a Greek bank account.

Jason Moran had no known occupation other than career gangster when he was shot dead in Essendon North in June 2003. He had a life insurance policy worth $16,000 and $413,211.81 in the Stevedoring Employees Retirement Fund. But his wife Trish, who listed her occupation as home duties, had built an excellent property portfolio valued at $1.845 million — although some of the units were mortgaged through Moran Investments Pty Ltd.

Jason's half-brother Mark was shot dead outside his $1.3 million home in Aberfeldie in June 2000, when houses worth more than a million dollars were still scarce. He was an unemployed pastry chef at the time.

Frank Benvenuto was shot dead outside his Beaumaris house in May 2000. In the boot of his car was said to be $64,000. He owned property and was able to spend $5000 on his sport of choice — pigeon racing.

Nik Radev was a drug dealer who didn't pay tax for years. When he was shot dead in April 2003 he was standing next to his $100,000 Mercedes. He was wearing a Versace outfit and a $20,000 watch and had recently spent $50,000 to have his teeth fixed. He was buried in a gold-plated casket valued at $30,000.

Police say that no matter how well business is going, many gangsters hate paying tax and will try to take on the system.

In a celebrated case that changed tax law, a convicted heroin dealer successfully claimed a deduction for money he claimed was stolen during a raid.

Perth drug dealer Francesco Dominico La Rosa argued he should be allowed to claim $224,793 stolen from him in 1995 after the Tax Office had assessed his income in that financial year as $446,954.

La Rosa — who was sentenced to twelve years jail for dealing heroin and amphetamines — was quoted after he won his court battle saying: ‘As drug dealers or business people, we should have the same rights as any taxpayer.'

The Federal Government changed the law so convicted criminals could not claim as deductions money spent or lost during unlawful activities. It is also illegal to claim bribes as a business expense.

But Evans says it is still technically possible for a non-convicted criminal to make claims. For example, a hit man who was paid to kill could theoretically claim guns, bullets and disguises as legitimate business expenses.

WHILE photos of Mokbel at the races or leaving court have filled newspapers for years, police artists have drawn a cartoon image that portrays the career criminal in a classic ‘Where's Wally?' pose, complete with the Crime Stoppers number branded across his chest.

It shows Australia's most wanted man ready to flee Australia either by plane or ship, carrying suitcases of money and a plastic surgery kit. The satirical image suggests that Mokbel, who described himself as a professional punter, would leave his favourite track, Flemington — from which he was banned — for Dubai, where he could punt on the camel races, among other events.

Police were joking about the whereabouts of Australia's number one fugitive but it would take them more than a year to find, not for the first time in the gangland war, that truth can be stranger than fiction.

‘It's like you sending me
to Hitler.'

 

WHEN Mokbel did a runner there was no shortage of theories about what had happened.

He was said to have jumped on a ship using the same connections he used to import drugs from overseas: after all, if you can import container loads of chemicals, surely you can export one little Lebanese drug dealer?

Others had him driving north to be picked up by a luxury yacht. The more imaginative speculated that a high flyer like Tony would have escaped in a private jet. Bizarrely, it was claimed he had flying lessons at Essendon Airport while on bail.

One thing was certain: his passport had been surrendered when he was granted bail so there was no way he could have left through usual channels under his own name.

The job of finding out the facts fell to the Federal Police but
under international law they could only request assistance from overseas police.

Mokbel's name and photograph were lodged with Interpol. It sounded impressive but meant little as the international agency is nothing more than a bureaucratic clearing-house, not a global man-hunting outfit. For Interpol, the greatest risk of danger comes from a nasty paper cut while filing documents.

Mokbel was just one more name among thousands of drug dealers, bail jumpers, armed robbers and murderers scattered around the world. Foreign police are more interested in catching a local burglar than trying to find someone else's crook. It was only much later, when a million-dollar reward was offered, that Victoria Police were contacted by former European secret police and asked, ‘Is that dead or alive?'

But, in the days weeks and months after Mokbel disappeared, the Federal Police needed a lead before anyone could help them. There was a lot of disinformation around.

At one point police were told he was dead and had been buried in country Victoria. Then police looked for him at the Dubai races, convinced he could not resist the glamour of the international event. A popular theory, possibly spread by Mokbel's family, was that he could have been hiding with relatives in Lebanon, but there were others: he could be back in his native Kuwait, sharing a cottage by the sea with Lord Lucan, or doing a warmup act for Elvis in Brussels as far as police knew.

Some sections of the media breathlessly reported he had used an old escape route pioneered by the Moran clan, which came as a surprise to the surviving Morans, who had no idea of such a route.

He was then said to have been involved in a shootout in Lebanon but was saved by his own heavily-armed guards, which would
have come as an even bigger surprise to Mokbel, who was not in Lebanon and didn't have guards.

In truth, police didn't know where he was but they were convinced he had planned his escape long before slipping out of the country.

But they were wrong.

It would now appear that Mokbel decided to run just days before he jumped bail. He had planned to see out his drug trial and was prepared to do several years jail, believing his syndicate would continue to prosper under the guidance of loyal family and friends. He would then emerge a slimmer, fitter multi-millionaire with his enemies in the underworld dead or jailed and his enemies in the police force retired or promoted to desk jobs. His enemies in the media would probably be in rehab.