Combatting serious tax non-compliance: Tax fraud and money laundering

Abstract

As illustrated by recent successful prosecutions, pursuing money laundering offences in tax cases can be an effective mechanism to penalise individuals involved in serious tax non-compliance. These cases suggest that tax fraud can have the effect of transforming otherwise legitimate business receipts into proceeds of crime such that subsequent transactions in relation to those proceeds may constitute money laundering. This article considers two recent tax scheme cases in the broader context of money laundering and proceeds of crime forfeiture laws in order to examine how the necessary physical elements of the money laundering offence may be shown in a tax case. This analysis suggests that this avenue of prosecution may have significant potential as revenue authorities continue to work closely with law enforcement agencies to combat the most egregious instances of tax evasion.