The Australian Taxation Office (ATO) has published the guidelines it uses when deciding whether or not to take legal action against superannuation funds, namely those that are self-managed..
When assessing superannuation issues or risks, the tax office takes into account a number of key factors.
These include elements such as how recently the alleged breach took place, if an industry professional was involved in the breach, if identity fraud may have been involved, whether the breach is of a significant value, the impact of the breach on the integrity of the superannuation system as a whole, if the offences are considered serious or complex, and if there is a reasonable chance of locating the offender.
While these are the items for consideration specified by the ATO, the regulator has stipulated it is not purely constrained to this list.
The process that decides whether or not prosecution is warranted also involves a superannuation prosecution panel that is chaired by the assistant commissioner or assistant deputy commissioner and is made up of senior executives and the prosecutions director.
This panel decides which cases are selected for further investigation and action. If further action is deemed necessary for a particular case, the panel refers it to the relevant areas, but will continue to monitor its progress periodically.
The final decision regarding whether or not to pursue cases incurring civil penalties rests with the deputy commissioner or delegate in whose name the action is to be commenced.
The Commonwealth Director of Public Prosecutions decides on the action to be taken on all other cases unless specifically delegated to the ATO.
Civil offences are those where the punishment will usually involve a fine of some description, while criminal offences will usually be punishable by imprisonment.
If there is evidence a person being prosecuted sought to gain advantage personally or for another party dishonestly, or intended to defraud someone, a civil case can be prosecuted as a criminal one.
Offences will normally be considered criminal if a trustee failed to comply with prescribed standards and acted recklessly or intentionally, a person acted in the capacity of a trustee while disqualified, a person fails to comply with a request for information made by the regulator, certain assets were acquired by the trustee from related parties, and a responsible officer of the super fund provides the auditor of the fund with false and misleading information.
