Formerly secret Cayman Islands documents reveal that Sydney businessman Vanda Gould, who was charged last week with serious tax and money laundering offences, controls two companies in the Caribbean tax haven.
The documents are evidence in a civil case in which overseas companies allegedly associated with Mr Gould and his co-accused, John Leaver and Peter Borgas, are attempting to claw back tax bills of about $40 million. Mr Gould is the chairman of listed investment company CVC and Mr Leaver, a former director of Gold Coast developer Sunland, is also on the board.
In the Federal Court case, the Tax Office alleges the offshore network brought $19.45 million back into Australia, much of which went to Mr Gould and Mr Leaver.
It alleges $3.4 million of tax haven money went towards the purchase of four apartments by a company associated with Mr Gould and Mr Leaver, while an additional $1.9 million helped fund the purchase of a property in Woollahra by Mr Leaver's daughter.
Messrs Gould, Leaver and Borgas were arrested last week and charged with conspiracy to dishonestly cause a loss to the Commonwealth and conspiracy to use $30 million as an instrument of crime - offences that carry jail terms of 10 years and 25 years respectively.
They have been released from custody after lodging bail money totalling $12 million.
Mr Gould is not registered as a director or shareholder of either Cayman Islands company, MH Investments and JA Investments.
However, the court documents show he signed nominee agreements on August 31, 2005, describing him as the "appointer" of both companies. The word "appointer" has been handwritten into the documents, replacing the printed word "beneficiary".
In both agreements, nominees appointed by Mr Gould declare they hold the shares on his behalf and promise to vote as directed by him "to enable the appointer to exercise all of the rights and privileges as a shareholder of the company". The nominees also promise to act as company directors and "vote as directed by the appointer at all times when acting as a director of the company".
Mr Borgas, a Belgian citizen who lives in Switzerland, is the sole director and sole shareholder of each company, and his wife Winny serves as assistant secretary.
In the Federal Court case, which continues despite the arrests, several offshore companies are challenging the Tax Office's contention they are Australian residents and should pay local tax on profits from share trading.
The offshore arrangements, described as "Byzantine in their complexity" by Justice Nye Perram, take in a dizzying array of companies and professionals in tax havens including Vanuatu, Singapore and the British Virgin Islands.
Chemical Trustees, Derrin Brothers Properties and Bywater Investments, of the Bahamas, have told the court they are controlled by Mr Borgas from his base in Switzerland.
Southgate Investment Funds claims to be controlled from London, while Hua Wang Bank Berhad, of Western Samoa, claims to be managed from the Samoan capital, Apia.
The Tax Office alleges JA Investments and MH Investments own the network of companies and Mr Gould controls all of them except Southgate, which it alleges is controlled by retired Sydney anaesthetist Joseph David Ross.
It alleges Messrs Gould, Leaver and Ross funded the offshore network by buying life insurance policies from Fidelity Pacific Life Insurance Company, which operates from tax haven Vanuatu and claims on its website that although "death is inevitable taxation does not have to be".
The Tax Office alleges that among the companies paying premiums was Planette Thoroughbred Trading - a company owned by Mr Gould and Mr Leaver that ran racehorses with radio shock jock Alan Jones and Racing NSW chairman John Messara.
It also alleges that on the instructions of Mr Gould, Fidelity deposited funds with the Bank of Commerce (Micronesia) in Vanuatu, which then loaned it on to companies in the offshore network. Profits from share trading were then allegedly repatriated as loans, which were used to buy property and fund companies controlled by Mr Gould and Mr Leaver.