An ABC Investigations report looked into a multi-million-dollar scam that exploits the homeless and addicted and turns them into company directors, using them to rip off creditors and avoid paying huge bills to the tax office.
An ABC Investigations report looked into a multi-million-dollar scam that exploits the homeless and addicted and turns them into company directors, using them to rip off creditors and avoid paying huge bills to the tax office. Carly Morrissey

How dodgy companies exploit those with ‘nothing to lose’

JAMIE Cox was battling an addiction to drugs and alcohol when he was approached by a man at a truck stop with on odd deal - sign on as a company director and we'll give you $400.

Mr Cox was initially signed up as a director of a trucking company by a Victorian accounting firm called Brown Baldwin, which he was passed onto by the guy at the truck stop.

But he soon found out he'd been made director of many other companies - which he says was done without his knowledge or permission.

A report today by ABC Investigations looked deep into a multi-million-dollar scam that exploits the homeless and addicted and turns them into company directors, using them to rip off creditors and avoid paying huge bills to the tax office.

The report said most of the companies Mr Cox was made of were liquidated, with outstanding debts to the tax office and creditors of over $2 million.

Mr Cox said he and others were targeted because "they had nothing to lose" and he was angry that he was now "directly responsible for hundreds of thousands of dollars in unpaid tax and fines".

Jamie Cox spoke out about his experiences with being turned into a company director. PHOTO: ABC News/Jeremy Story Carter
Jamie Cox spoke out about his experiences with being turned into a company director. PHOTO: ABC News/Jeremy Story Carter

The report said what the "sham labour-hire" firms did was create a shell company with a dummy director, or use a company they already had sitting on the shelf, pretend to hire all your staff through that company and just conveniently forget to pay income tax on their wages.

Then, when the tax office starts asking questions, you just shut down that shell company and start another one.

If anyone asks questions about the dead company and the unpaid tax, they chase the dummy director - people like Mr Cox.

The report said the Australian Tax Office's investigation into Brown Baldwin, which closed its doors in 2019 after ATO raids, was ongoing, but no criminal charges had been laid so far relating to the dummy director scheme.

You can listen to the Background Briefing report online here.