Wheatley jailed over tax fraud

Glenn Wheatley has been jailed for at least 15 months, becoming the first scalp of Australia's largest-ever tax fraud and money laundering investigation.

Wheatley, who manages Australian music icon John Farnham, dodged paying more than $300,000 in tax by hiding money in a Swiss-based accounting firm and engaged in bogus offshore transactions.

At the Victorian County Court, Judge Tim Wood sentenced him to two-and-a-half years jail and said he had to serve at least 15 months before being released on a recognisance of $5,000.

Evidence given against others

Judge Wood says Wheatley's promise to give evidence against other people who may be charged as part of Operation Wickenby had reduced his sentence by one-third.

He says although he took into account testimonials from prominent Australians attesting to Wheatley's good character, general deterrence was the most important sentencing factor.

"All taxpayers are victims of your offending," he says.

"It diminishes the ability of the government to provide for community needs.

"(It) imposes unfair burden on honest citizens who pay their taxes."

$300 million operation

Operation Wickenby is a $300 million joint Australian Crime Commission and Australian Taxation Office tax evasion and money laundering investigation and is the largest-ever probe of its type in Australia.

Other people have been charged, but Wheatley is the first person to be sentenced by a court.

The 59-year-old, of South Yarra, had pleaded guilty to one count each of defrauding the Commonwealth, failing to aid to the utmost of his power in the administration of property and his affairs contrary to the Bankruptcy Act, and dishonestly obtaining gain.

Possible jail term of 16 years

He was facing a maximum penalty of 16 years' jail.

Wheatley's barrister Robert Richter, QC, made a last-ditch effort to keep his client out of jail, citing comments made yesterday by Australian Taxation Office Commissioner Michael D'Ascenzo in an address to the Australian Institute of Company Directors.

"Come, provide a full and true disclosure, help us understand who put you into these arrangements," Mr D'Ascenzo says.

"We are looking at targeting promoters (of tax evasions schemes) very much."

Mr Richter says if Wheatley was jailed it would fly in the face of the ATO plea for cooperation.

"To send him to prison in these circumstances would send a message to people – fight to the death," he told the court.