Police smash tax fraud Syndicate-ATO deputy commissioner Michael Cranston embroiled in $165m fraud investigation


18/05/2017

More to follow with news a senior journo Steve Barrett being allegedly involved with a blackmail plot with a member of the conspiracy Daniel Rostankovski  who was allegedly aggrieved he was not getting his fair share…See down for more details

ATO deputy allegedly sought to seek a deal for son in $165 m tax fraud,,, Mr Cranston has been issued a future court attendance notice for the charge of abusing his position as a public official. He is due to appear in Sydney’s Central Local Court on June 13.

His son, Adam Cranston, 30, and his daughter, Lauren Anne Cranston, 24, have also been charged following an eight-month investigation, codenamed Operation Elbrus.

It’s alleged ATO deputy Michael Cranston accessed restricted information on an ATO audit for his son, but police do not believe he knew about his son’s alleged fraud syndicate.

Australian Federal Police Deputy Commissioner Leanne Close said the syndicate appeared to use the money to fund a “lavish lifestyle”.

Among the items seized under proceeds of crime were 25 motor vehicles, including luxury cars and racing cars, 12 motorbikes, 18 residential properties, two aircraft, $1 million from a safe deposit box, firearms, jewellery, bottles of Grange wine and artworks.

ATO Second Commissioner Andrew Mills said two other ATO officers were also being investigated internally for a potential code of conduct breaches. It’s believed they tried to look up information on the ATO’s audit at the behest of Michael Cranston….Robbo

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Police will allege the group had a lavish lifestyle and diverted taxpayer funds to buy planes, sports cars, jewellery, property, artwork and fine wines.

As part of the operation, officers have seized:

  • 25 motor vehicles
  • $15 million in bank accounts
  • 18 residential properties
  • 12 motorbikes
  • Two aircraft
  • Firearms
  • Jewellery
  • Artwork
  • Vintage wines
  • $1 million in a safe deposit box

Acting AFP deputy operations commissioner Leanne Close said the ATO got involved in the investigation when alleged evidence of fraud mounted.

 


Veteran Sydney journalist Steve Barrett allegedly blackmailed tax syndicate

By Rachel Olding

A veteran Sydney journalist allegedly blackmailed members of a $165 million tax fraud syndicate after conspirators in the group had a falling out, it can be revealed.

Explosive documents tendered in Central Local Court on Thursday state that well-known television journalist and former crime reporter Steve Barrett allegedly blackmailed two members of the syndicate during a meeting at the offices of Clamenz Lawyers on February 1st 2017

Eight people were arrested on Thursday over the alleged tax fraud syndicate including Adam and Laura Cranston, the son and daughter of Australian Taxation Office Deputy Commissioner Michael Cranston.

Michael Cranston has also been issued a future court attendance notice for a charge of abusing his position as a public official.

The police documents reveal that one syndicate member, Daniel Rostankovski, turned on other conspirators and allegedly tried to extort money from them.

At the February 1 meeting, Mr Rostankovski and Mr Barrett allegedly threatened to expose the conspiracy in the media if money wasn’t handed over.

“Police allege … Rostankovski and Barrett attempted to blackmail the co-conspirators in relation to their involvement in the conspiracy,” the police documents state.

Mr Rostankovski allegedly demanded $5 million or Mr Barrett would expose the group in the media.

Mr Rostankovski felt like he had been deceived by the group as other members were receiving more money than him.

The group allegedly agreed to their demands if he didn’t go to the media, the police or the ATO. An agreement was signed that outlined such undertakings, the police documents reveal.

Mr Rostankovski, a 28-year-old from Waterloo, was granted strict bail in Central Local Court on Thursday. Mr Barrett has not been charged. He did not return Fairfax Media’s calls on Thursday.

Barrett, who previously worked for 60 Minutes, was a long-time employee as a producer in the Channel 7 newsroom but left the network in March 2016, before the alleged blackmail took place.

Australian Federal Police Deputy Commissioner Leanne Close said the syndicate appeared to use the money to fund a “lavish lifestyle”.

Among the items seized under proceeds of crime were 25 motor vehicles, including luxury cars and racing cars, 12 motorbikes, 18 residential properties, two aircraft, $1 million from a safe deposit box, firearms, jewellery, bottles of Grange wine and artworks.

ATO Second Commissioner Andrew Mills said two other ATO officers were also being investigated internally for potential code of conduct breaches. It’s believed they tried to look up information on the ATO’s audit at the behest of Michael Cranston.

The announcement came after nearly 300 police officers on Wednesday carried out raids across Sydney, Wollongong and the Southern Highlands, arresting nine people.

Among those who appeared in court on Thursday are Mr Rostankovski, 28, from Waterloo; Jason Cornell Onley, 47, from Vaucluse; Daniel Hausman, 47, from Woollahra; Christopher James Guillan, 46, from Sutherland; Dev Menon, 33, from Wahroonga and Devyn Hammon, 24, from Balgownie.

Police will allege in court that the syndicate members ran a legitimate payroll company, Plutus Payroll, and accepted money from legitimate clients to process payroll on their behalf.

“This money was transferred to seven sub-contracted companies known as Tier 2 companies, which then made payroll payments to individual workers or clients,” the federal police said in a statement.

Tax office investigators, who helped the federal police during the investigation, estimate the amount of tax obligations not paid to the tax office to be $165 million.

Mr Mills described Michael Cranston as one of the organisation’s “long-serving senior officers” who had “quite an illustrious [career] up until this point”.

Mr Mills said he was confident the tax office’s systems had not been compromised nor breached and the accused employees were not able to obtain any information.

“The investigation has so far not revealed any evidence of actual intervention or influence on audit cases, or of money being refunded, or of tax liability being changed,” Mr Mills said.

“The information I have to date shows no compromise of the operations of our administration. Our systems, controls and procedures worked effectively and we have been able to successfully isolate and protect the investigation, working well with the Australian Federal Police over many months to build a picture of what has been happening.”

Prime Minister Malcolm Turnbull congratulated the federal police for the investigation and “taking the action that they have”.

 

ATO Deputy Commissioner Michael Cranston allegedly sought to cut deal for son Adam Cranston

By Nick McKenzie

Deputy ATO commissioner to be charged

Deputy Commissioner of the Australian Tax Office Michael Cranston allegedly sought to pressure colleagues to cut a deal with his son after learning he was the subject of a major tax fraud investigation, sources said.

Mr Cranston learnt of the investigation after his son, Adam Cranston, approached him and told his father that he believed his company was the subject of an ongoing inquiry.

Michael Cranston.Michael Cranston. Photo: Rob Homer

Michael Cranston allegedly subsequently approached a Tax Office assistant commissioner and raised the prospect that his son’s company was being targeted.

 

Michael Cranston allegedly simultaneously sought to downplay his son’s involvement in the alleged criminal scheme.

  • Two high-ranking Tax Office officials who spoke to Michael Cranston about the inquiry into his son have also been stood down, pending further investigation.
  • It is understood that Michael Cranston allegedly inquired as to whether a deal could be struck to resolve any probe.
  • The Tax Office sometimes resolves matters by agreeing to receive a payment from those accused of tax fraud.
  • Michael Cranston also allegedly sought to reach out to investigators involved in the multi-agency investigation but was unable to do so because the Australian Federal Police had warned them that such an approach might be likely.

One of nine people being arrested over a $165 million tax fraud investigation.

One of nine people being arrested over a $165 million tax fraud investigation.  Photo: AAP/Australian Federal Police

Adam Cranston was allegedly involved in the unlawful tax fraud scheme from the middle of 2016.

The scheme, which allowed the accused to make tens of millions of dollars in allegedly illegal profits, was started much earlier by another of the accused.

Police seized $1 million from a safe deposit box during Wednesday's raids.

Police seized $1 million from a safe deposit box during Wednesday’s raids. Photo: Australian Federal Police

Adam Cranston allegedly displayed unexplained wealth, including a collection of prestige cars.

But Michael Cranston is suspected to have been unaware that his son was the subject of the probe until Adam approached him.

Tax tsar’s son charged over alleged scam that netted $165 million

 

It comes after his son Adam was charged over his role in a $165 million tax scam.

The Daily Telegraph today revealed Cranston’s son, Adam was charged over his alleged role in a fraud syndicate that police claim stole more than $165 million — one of the biggest white-collar crimes in Australia’s history.

The Daily Telegraph can reveal Australian Federal Police yesterday arrested Adam Cranston at his Bondi flat in one of 27 raids on homes and businesses across Sydney.

Adam Cranston, son of ATO boss Michael Cranston, is arrested at his Bondi flat yesterday over his role a $165 million fraud syndicate. Picture: Police Media

Cranston was charged last night with conspiracy to ­defraud the commonwealth and is expected to face Central Local Court today.

It’s understood eight others were arrested and facing possible charges.

The 30-year-old Cranston is the son of ATO deputy commissioner Michael Cranston, but there is no suggestion Michael Cranston had any involvement in or ­knowledge of the criminal syndicate.

Adam Cranston on his wedding day to wife Elizabeth. There is no suggestion Elizabeth was involved in the alleged scam. Picture: Facebook

Sources close to the investigation claim Adam was a “co-conspirator” in a group that used an elaborate tax scam to fund a celebrity lifestyle that included prime Sydney real estate, boats — and even a racing car team.

“This investigation has ­uncovered high-level organised activity; it is complex (and) sophisticated,” the source last night told The Daily Telegraph.

Adam Cranston marries wife Elizabeth. There is no suggestion Elizabeth was involved in the alleged scam.

“I think it will take the police a long time to figure out exactly how much money (is involved).”

It is believed police will ­allege the fraud is one of the largest ever seen in Australia.

Investigators allege Sydney financial services firm SYNEP, of which Adam is co-chairman and managing ­director, was part of the ­operation.

ATO Deputy Commissioner Michael Cranston
Adam Cranston is escorted from the scene at Bondi yesterday. Picture: Police Media.

Payroll contractor Plutus Payroll, controlled by SYNEP, was the centrepiece of the ­alleged hustle.

Police will claim it would allegedly funnel wage payments through a series of “second tier” companies. who then paid the ATO only a fraction of the required income tax.

The remaining withheld tax would then allegedly flow into the pockets of syndicate operators.

The scammers believed they had struck a sweet spot where each individual fraud was too small to prompt ­action from the ATO.

One source said it was “like saying to your schoolteacher, ‘I’ve done most of my homework, I’ll bring the rest next week’.”

The net tightened when both the AFP and ATO ­noticed alleged discrepancies in parallel investigations.

Police escort Adam Cranston from the scene yesterday. Picture: Police Media

The sum of the frauds is understood to be more than $165 million, with the extent of Cranston’s own alleged profits expected to be revealed in court.

Investigators said their probe focused on a 12-month snapshot of the group’s alleged activities.

Sources also allege the scheme had another sinister angle.

How the scam was carried out

Police will claim the syndicate would pay struggling people a regular fee so they could set up the second tier companies in their names. However, the syndicate had total control of the companies.

Plutus Payroll hit the headlines earlier this month when the ATO froze its bank ­accounts over unpaid tax debts, meaning its clients’ staff could not be paid.

Police examine a vehicle at Adam Cranston’s Bondi flat yesterday. Picture: Police Media

In a statement earlier this month, Plutus apologised to its customers “continuing ­distress caused by our inability to process your pay since 27 April”.

“Our dispute is with the Australian Taxation Office who believe that Plutus owes the ATO money,” the statement said.

“Acting in a draconian and unfair manner, the ATO froze Plutus’ bank accounts on 27 April without prior warning or any consultation.

“We received no notice of intention to audit, no complaint and no other advance warning of noncompliance from the ATO.

 

“When the ATO acted, without notice, they froze our bank accounts and we became unable to pay our contractors the money owed to them.”

On May 10, the company announced the ATO had ­allowed the release of the money.

With more than 35 years at ATO, Michael Cranston has spearheaded many public campaigns to catch tax cheats.

“I am responsible for ­increasing compliance and willing participation in our tax and super system,” one of his social media accounts states.

“I recently chaired the OECD Task Force on Tax Crimes.”

The ATO last night ­refused to comment on the­ ­investigation.

And Michael Cranston did not respond to questions put to him through the ATO.

The ATO said it “will not comment on ongoing investigations at this time”.

“Due to privacy considerations the ATO is unable to comment on individual ­employees,” it said.

A CASE OF LIVE FAST AND FRY YOUNG

POLICE claim assets linked to an alleged $165 million tax fraud case include sports cars, expensive properties, boats and even a race team.

Cars were a particular passion for one of the alleged “co-conspirators” of the crime. Adam Cranston loved them so much there’s even a wedding day photo of the now 30-year-old with his wife and a slick race car.

There is no suggestion Cranston’s wife had any knowledge of or involvement in the alleged fraud.

A source said that among the property seized by police is an orange and blue Ford GT in Cranston’s ­possession.

Cranston started a race car team last year. And he named it after the ­financial services firm now at the centre of the alleged crime, SYNEP. The team competed in the Australian Prototype Series and in February celebrated a podium finish at Mount Panorama.


ATO official Michael Cranston facing charges over son’s alleged 65m fraud – ABC News (Australian Broadcasting Corporation)

ATO official Michael Cranston facing charges over son’s alleged $165m fraud

18/03/17 Updated 8 minutes ago

One of Australia’s most senior tax officials has been embroiled in a major fraud investigation following the arrest of his son, which allegedly involved $165 million being stolen from the Commonwealth.

Deputy tax commissioner Michael Cranston has been issued with a court attendance notice, while his son, Adam Cranston, was arrested in Sydney yesterday as part of an Australian Federal Police sting.

Michael Cranston will be charged with abusing his position as a public official relating to the fraud, although he is not believed to be a conspirator.

Adam Cranston, 30, was arrested at his flat in the affluent beach suburb of Bondi during raids yesterday and has been charged with conspiracy to defraud the Commonwealth.

At a press conference in Sydney today, officials said Michael Cranston could have been unwittingly involved in his son’s alleged crimes.

In all, nine people were arrested in Sydney yesterday as the AFP carried out 28 raids.

At a press conference today, the AFP alleged the group used “lavish lifestyles” to help hide the funds, including 25 motor vehicles, $15 million in cash, 18 residential properties and two aircraft.

Adam Cranston will face Central Local Court in Sydney later today.

Federal Treasurer Scott Morrison said the arrests served as a warning.

“This is a major government crackdown and what the events today with this major fraud bust … demonstrates is that if you are a crook and you are seeking to defraud the taxpayer, we will find you,” he said.

“We will track you down. We will make sure you are brought to justice.”

The ABC understands Michael Cranston has been employed by the ATO for more than three decades and is involved in the organisation’s private groups and high wealth segment.

Part of his biography on his LinkedIn account reads: “My personal philosophy is that the tax system belongs to all Australians and we all need to work closely together to ensure that it is administered fairly, efficiently and causes the least pain for all that participate.”

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Music promoter Andrew McManus is one of five men who have been arrested over an alleged cocaine smuggling ring.


Andrew McManus, promoter to stars including Aerosmith, Laura Dundovic and KISS, arrested in international cocaine ring bust… after police trace $700,000 in cash he claimed was ‘for a Lenny Kravitz concert’

  • Music promoter Andrew McManus was arrested and charged by police
  • It is alleged the 54-year-old was part of an international drug trafficking ring
  • The investigation began when $702,000 was found in a hotel room in 2011
  • McManus claimed the money was payment for a Lenny Kravitz concert 

A prominent Australian music promoter is one of five men who have been arrested over an alleged cocaine smuggling ring.

A four-year joint investigation between NSW Police and the United States’ FBI led to the arrests of the group of men.

Detectives arrested three men in Sydney on Thursday night while a fourth man – 54-year-old music promoter Andrew McManus  – was arrested at Melbourne Airport, the Sydney Morning Herald reported.

Music promoter Andrew McManus has been arrested as part of an alleged international drug trafficking ring 

 Music promoter Andrew McManus has been arrested as part of an alleged international drug trafficking ring

It has also been reported the detained Sydney men were crime figure Craig Haeusler, Kings Cross solicitor Michael Croke and Auburn pastry shop owner Zeki Atilgan.

McManus has been charged with perverting the course of justice, two counts of intention to defraud by false or misleading statement and knowingly participating in a criminal group.

A fifth man was arrested in the US by the FBI for drug offences and money laundering, NSW Police said in a statement.

US businessman Owen Hanson Jr was arrested while playing golf in San Diego, the Herald reported.

McManus and Miss Universe Australia 2008 Laura Dundovic in 2008

Andrew McManus and music legend Stevie Nicks pose at The Melbourne Cup in 2005

McManus (left with Laura Dundovic and right with Stevie Nicks) was arrested along with crime figure Craig Haeusler, Kings Cross solicitor Michael Croke and Auburn pastry shop owner Zeki Atilgan

Andrew McManus has been responsible for bringing Aerosmith, KISS, Lenny Kravitz and Chris Isaak (pictured above with McManus in 2008) to Australia

 Andrew McManus has been responsible for bringing Aerosmith, KISS, Lenny Kravitz and Chris Isaak (pictured above with McManus in 2008) to Australia

He was charged with perverting the course of justice, two counts of intention to defraud by false or misleading statement and knowingly participating in a criminal group

NSW detectives started investigating the alleged syndicate in August 2011 after a bag of $702,000 in cash was found in a man’s Sydney hotel room.

WHO IS ANDREW MCMANUS?

Andrew McManus, who owns McManus Entertainment, has been responsible for bringing Aerosmith, KISS and Lenny Kravitz to Australia.

He was forced to declare bankruptcy when the ATO discovered he had a $2.4 million tax debt after he was left $4.2 million out of pocket when deals and tours fell through.

McManus had to sell off his fleet of luxury cars and extensive property portfolio to cover his substantial debts.

The music promoter made headlines again back in 2011 when he was linked to a bag of $702,000 in cash that he claimed was payment for a Lenny Kravitz concert.

Four years later, he was arrested for his alleged part in a international cocaine ring, along with three Sydney men and a US citizen.

A court case was brought against NSW Police for the return of the cash when McManus claimed the bag was his and the money was payment for a Lenny Kravitz concert when he toured Australia.

But the police won and in late 2014 conducted raids in Sydney and Victoria, which netted $68,000 cash, drugs, steroids, documents and electronic equipment.

The operation also uncovered information regarding the alleged importation of 300kg of cocaine from Mexico to Australia via the US.

Since then, police have been investigating alleged drug trafficking between Mexico, the US and Australia, and associated money laundering.

Australian Crime Commission NSW manager Warren Gray said ‘investigations like this one affirm the effectiveness of “following the money'”‘.

NSW Police have charged a 55-year-old man with perverting the course of justice, intention to defraud by false or misleading statement and knowingly participating in a criminal group.

A 65-year-old has been charged with perverting the course of justice, three counts of intention to defraud by false or misleading statement and knowingly participating in a criminal group.

A 32-year-old man was charged with two counts of money laundering.

NSW detectives started investigating the alleged syndicate in August 2011 after a bag of $702,000 in cash was found in a man's Sydney hotel room. Above is one of the three Sydney men being arrested on ThursdayNSW detectives started investigating the alleged syndicate in August 2011 after a bag of $702,000 in cash was found in a man’s Sydney hotel room. Above is one of the three Sydney men being arrested on Thursday

The trio have been charged with money laundering, perverting the course of justice, intention to defraud by false or misleading statement and knowingly participating in a criminal group

Police raided the homes of three men in Kellyville, Miranda, and Sydney CBD following the extensive investigationPolice raided the homes of three men in Kellyville, Miranda, and Sydney CBD following the extensive investigation

The group of men have been bailed to appear at Sydney courts at later dates. NSW Police are also seeking to extradite a US citizenThe group of men have been bailed to appear at Sydney courts at later dates. NSW Police are also seeking to extradite a US citizen

The group of men have been bailed to appear at Sydney courts at later dates.

NSW Police is seeking the extradition of a 33-year-old US citizen to Sydney on arrest warrants for money laundering, perverting the course of justice and intent to defraud by false or misleading statement, as well as an additional charge of drug supply of a large commercial quantity.

Detectives from the Organised Crime Squad are currently in San Diego, California, working with the FBI.

A number of search warrants were executed, with officers seizing cash, gold, silver, cannabis and documentation.


Drug trafficking, money laundering bust sees five men, including Melbourne music promoter, arrested in joint NSW Police-FBI investigation

Updated about 2 hours ago

Music promoter Andrew McManus was arrested in Melbourne last night. (Getty Images: Kristian Dowling)

Five men, including Melbourne music promoter Andrew McManus, have been arrested following a joint FBI and New South Wales police investigation into international drug trafficking and money laundering.

An investigation was launched after police seized more than $700,000 from a man at a Sydney hotel in 2011.

NSW Police faced legal action for the return of the money, with a claim being made that it was payment for an international band who had toured Australia, but the case was thrown out of the Supreme Court and investigations continued.

Last year, New South Wales and Victoria police raided five properties, seizing more than $68,000 in cash and steroids.

Detectives say they also uncovered the importation of 300 kilograms of cocaine from Mexico to Australia, via the United States.

Following a joint operation with the FBI in San Diego, California, police last night arrested McManus, 54, in Melbourne.

McManus’ promotion companies have brought a number of high-profile entertainers to Australia, including Kiss, Mötley Crüe and Stevie Nicks.

A 65-year-old Sydney solicitor and two other New South Wales men were also charged.

Subsequent searches at a home in Kellyville, in Sydney’s north-west, uncovered cash, steroids and cannabis.

New South Wales Police are also trying to extradite US citizen Owen Hanson, 33, to Sydney so he can be charged.

He was arrested by FBI agents in the parking lot of a golf course in near San Diego, California, where he remains in custody on US federal drug charges, according to a statement from the FBI.

“The commitment made by the detectives and others involved in this investigation has been outstanding — they never lost focus on the job at hand,” commander of the Organised Crime Squad, Detective Superintendent Scott Cook, said in a statement.

“As recent investigations have shown, it is now clear that organised syndicates impacting NSW are often transnational in nature.

“Whilst this presents us with challenges, those who undertake these activities need to understand that being outside the jurisdiction will not save you.”

Australian Crime Commission state manager NSW Warren Gray said that, in this instance, “following the money” led to the discovery of criminal activity.

“The collaborative work between NSW Police and the FBI, and multiple partner agencies, is highly commendable and this outcome is a great result for the Australian community,” he said.

theage.com.au

Andrew McManus at centre of storm

Kate McClymont

Big business: Andrew McManus in his office.Big business: Andrew McManus in his office. Photo: Teagan Glenane FCN

Controversial music promoter Andrew McManus has unwittingly revealed an important career lesson to tax evaders: if you are going to boast about ripping off the Australian Tax Office, don’t confide in the police.

His bizarre admission emerged last week in a court case involving the promoter, a bag full of cash, international rock acts including Fleetwood Mac and Lenny Kravitz and crime figures from Australia and the US.

“I’m not a dickhead but… if this went to the ATO, I’d be cooked again.”  

Andrew McManus

During an investigation into the source of the $702,000 cash found in a Sydney hotel room in 2011, McManus claimed the money was his. He boasted to police if they came round to his house “right now” they would find a safe with “600 large sittin’ in it”.

Legends: International rock act Fleetwood Mac.Legends: International rock act Fleetwood Mac.

When the police asked about the source of the money, he said, “This isn’t going anywhere?” He then offered that the “600 large” came from a Lenny Kravitz tour.

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 He told police that he used 20 crew members to “sneak” the cash in from New Zealand.

“I’m not a dickhead but… if this went to the ATO, I’d be cooked again,” he volunteered.

Legal fight: Sean Carolan at the Supreme Court in Sydney.Legal fight: Sean Carolan at the Supreme Court in Sydney. Photo: Photo: Janie Barrett

Documents tendered during a recent battle in the NSW Supreme Court over the money have revealed that McManus also accepted $450,000 in cash from the outlaw Perth bikie gang, the Coffin Cheaters.

He also admitted to police that he withheld funds from rock groups including international stars Fleetwood Mac.

McManus also confided to police about the financial fallout from his involvement in the Melbourne Storm salary cap scandal.

The saga of the suitcase full of cash had its origins in May 2011 when McManus was staying at the luxurious InterContinental hotel in Macquarie Street, a short walk from Sydney’s Circular Quay.

In his hotel room he had a number of plastic shopping bags crammed with $10,000 bundles of cash totalling $702,000. His long-time friend and associate Craig Haeusler emptied the bags into a suitcase.

Haeusler, a drug kingpin who served five years in jail for running a multi-million dollar drug ring supplying methamphetamines to Sydney’s eastern suburbs, then gave the money to a young American, Owen Hanson jnr.

Haeusler told police he had been introduced to Hanson by a Chinese gambling identity and that the pair had bet on the NFL in America.

Hanson, who moved hotels every few days, was nicknamed “Dispose” by his Australian friends because of his propensity to dispose of pre-paid mobile phones.

Haeusler later told police that McManus was repaying Hanson who had  stumped up the deposit McManus needed for a ZZ Top tour.

The suitcase of cash was then hidden by Hanson in the ceiling of a rented apartment in Kent Street for three months. In August he handed the suitcase of cash to his personal trainer, Sean Carolan.

On August 11, 2011, police received an anonymous tip-off that the occupant of room 3026 in the Hilton Hotel had a gun. The occupant, Carolan, a former cage fighter and racehorse trainer turned personal trainer, didn’t have a gun — but he did have a black suitcase containing McManus’s $702,000, which the police seized.

Carolan’s subsequent legal fight to recover the money has brought to light a bizarre series of events.

On the night police seized the cash, Carolan said he was merely minding the money for Hanson, who didn’t want to lose any more at the casino.

CCTV footage from Star City casino obtained by the police shows earlier that day Carolan and Hanson were in a heated conversation with Robert Cipriani, a well-known American high roller who calls himself Robin Hood 702 (702 is the telephone code for Las Vegas).

Police records note that Cipriani “is well known to the casino and is currently of interest to the Australian Federal Police”.

The day after the cash was seized, Cipriani left for Los Angeles.

During the investigation into the suitcase, police interviewed Hanson by videolink from the Beverly Hills police station in Los Angeles. “Do you want me to tell you the, the full story of how basically this money was laundered…?” Hanson offered.

He said the cash had come from McManus but, contrary to Carolan’s initial version, Hanson claimed he had given the money to Carolan to invest in Carolan’s weight loss clinic.

As well as expressing concern at Hanson’s use of the word “laundered”, Justice Richard Button noted in his judgment on Monday, “There is no satisfactory explanation why Mr Hanson would invest hundreds of thousands of dollars in cash in the business concept of a personal trainer who resided in a foreign country and whom he had known for no more than several weeks.”

Justice Richard Button refused to hand the $702,000 back to Carolan, saying he was not convinced he was “lawfully” entitled to the money.

Carolan was ordered to pay the police costs.

When he was interviewed by police in April 2012, McManus told them the money was his. “It’s pretty obvious though. I gave someone 700 large, and you’ve found someone with 700 large. It’s my 700 large.”

McManus told the police that the cash was part of a business deal where he was repaying the money to Hanson, who had lent him cash as a deposit for a ZZ Top tour but now he wanted it back to fund a Lenny Kravitz tour.

“In essence, I delivered back 700 grand I now need to borrow it again. As quickly as possible,” he said.

He also said; “It’s not the proceeds of crime, it’s the [proceeds] of Andrew McManus.”

McManus made remarkable admissions during his record of interview with police. He has since claimed he was under the influence of morphine  and alcohol at the time.

The rock promoter volunteered to police that he had been “under suspicion by the NRL, for making player payments to rugby league players”.

This was a reference to the Melbourne Storm salary cap scandal in 2010 when it was revealed that McManus had facilitated extra payments to Storm players including Greg Inglis, Cameron Smith and Billy Slater.

His company, Andrew McManus Presents, would bill the Storm for “promotional” events. The money would be then be channelled by McManus’s company through to several Storm players.

The Storm were later stripped of their points and previous premiership titles.

Neither the players nor McManus were accused of any wrongdoing but McManus told the police of the fallout which included the Australian Tax Office going through him like a dose of salts.

“Although I did make tax payments on each player payment, I never actually got them to sign a full stat dec. So, of those players, they decided that they would fine me…between 30 per cent and the 49 per cent.”

He said he had to pay the ATO $120,000 per player, which totalled $2.4 million. “It crushed my company…Andrew McManus Presents International,” he told police.

Because of his ensuing financial difficulties he said he used friends and associates to help fund tours. McManus mentioned that Liberal powerbroker Michael Kroger and his brother Andrew had invested in his concert tours.

He said on five or six occasion, Michael Kroger had “put cash in and then I’ll, you know, fold it out.”

A spokesman for Michael Kroger said it was “a standard financial arrangement”.

McManus also boasted of withholding cash ticket sales from bands such as Fleetwood Mac. “I sold over $700,000 in cash tickets, because people wanted the best tickets, they come to the office, they ring up or email.”

“I’m not sharing it with the band…the cash stays in Andrew McManus’s pocket,” he told police.

McManus also told the police that he had accepted $450,000 in cash from the Coffin Cheaters, an outlaw motor cycle gang who were promoting the Perth leg of the ZZ Top tour.

During his police interview, McManus was accompanied by his lawyer and former partner in a Sydney nightclub, Michael Croke.

Croke, who represented Haeusler in his drug trial, also acted for McManus, Hanson, Haeusler and finally Carolan in the latter’s unsuccessful attempt to have the money returned.

During the case, Haeusler was pacing up and down the corridor outside the Supreme Court in Sydney.

McManus declined to comment for this story. He has issued a media release suggesting revelations about the suitcase and the cash were “gutter journalism by a bottom feeder” and that the articles had been written under “the protection of impossible deformation (sic) laws.”

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