Businessman threatened to expose Plutus tax fraud scheme

Two months later, on May 17, police arrested 10 co-conspirators over Australia's largest corporate tax fraud and charged Adam's father, Michael, with allegedly abusing his position by seeking to find out about the ATO's investigation to help his son.

'Lawsuit a fabrication'

Mr Madison, a London entrepreneur whose business interests range from mineral water to security services, was the director of Hartford Investments, a company he said was specifically set up for accused co-conspirator, Peter Larcombe.

One Plutus-linked labour hire firm, Uneek Consulting Services, would transfer more than $3 million into Hartford from 2015 to 2016.

But by July 2016, Uneek was suing Hartford and Mr Madison in the NSW Supreme Court, claiming they had breached a verbal agreement to pay 10 per cent returns on its "capital protected investment".

Mr Madison did not initially defend the claim, resulting in a default judgment against himself and Hartford.

Mr Larcombe died in a suicide that August and Mr Madison wound up the company the following month.

But in March 2017, Mr Madison filed a motion to set aside the judgment, along with an explosive affidavit.

In the document, he claimed the lawsuit was a "fraud and a fabrication".

He said he had initially understood that the money paid into Hartford was for Mr Larcombe's "personal dividends".

But he claimed it became apparent to him in early 2016 that Adam Cranston and associates Jay Onley, Patrick Willmott and Mr Larcombe "were or had been in charge of multiple entities using dummy directors".

He said the companies passed on pay as you go (PAYG) tax to Mr Cranston, Mr Onley and Mr Larcombe and "were structured to ultimately 'blow up'".

"Rather than pay, the director would state they were under financial difficulty and enter into payment arrangements to stave of attention from the ATO. The dummy companies would then direct the collected PAYG payments to Cranston, Onley and Larcombe."

'Mate, it's all privilege'

He said that in May 2016, Mr Cranston had contacted him to meet at the Sydney offices of Clamenz Lawyers with his lawyer Dev Menon.

At the meeting, he was told Mr Larcombe and his associate Mr Willmott had "stolen funds from Cranston and Onley and they wanted these funds back".

"They were quite open about their involvement in the ongoing affairs of labour hire businesses which I then understood to be illicit," Mr Madison said in the affidavit.

"I said to Cranston that they shouldn't be so obvious in their discussions in the open. To which he said 'Mate I am with my lawyer it's all privilege'.

The next month, Mr Cranston called Mr Madison again to convene a second meeting at Cafe Sydney, which Mr Onley and Mr Menon also attended.

At the meeting, Mr Madison claims they told him they were concerned the ATO would "come after them and me and they should put in place a mechanism to mitigate exposure".

"They informed me that they would commence legal proceedings on behalf of Uneek Consulting Services Pty Ltd to act as a barrier to the ATO recovering funds from Uneek Consulting."

Mr Madison argued the default judgment should be set aside "on the basis that my actions would have been illegal and that I was under duress."

Mr Madison told The Australian Financial Review that before filing the affidavit he had made multiple approaches to Mr Menon, Mr Onley and Mr Cranston to remove his name from the judgment.

He even went so far as to text Mr Menon a photo of the affidavit at the Supreme Court registrar's desk, saying "last chance".

"I was prepared to stand up and in court and disclose everything I knew about their actions," he said.

But within 36 hours of receiving the affidavit, Uneek signed consent orders to set aside the judgment and the affidavit was never tendered in open court.

At the time, the AFP had already been wiretapping the Plutus syndicate for several months and the syndicate itself was falling apart.

The revelation comes as the liquidator for Hartford Investments, Hall Chadwick, has launched examinations into parties connected to $11 million in "uncommercial" transactions from the company.