Tax agent steals $1.3 million, leaving clients to face ATO bill

Between 2010 and 2016, Hogg asked clients for up-front payments for his tax minimisation scheme, which in reality was a "dishonest fabrication designed to deceive the client, so the accused could profit'', according to court documents.

Hogg siphoned the up-front payments to his private bank accounts, while making fraudulent expense claims on his clients' annual tax returns to reduce their liability to the ATO.

The proceeds of his crimes were used to bankroll regular overseas holidays, expensive cars, gambling sprees and investment properties.

The self-described "tax expert" divided his time between his Beaumaris business and a property on Queensland's Sunshine Coast - Monday to Thursdays were spent in Melbourne before jetting off to Noosa for long weekends.

The lavish lifestyle came to an abrupt end in March 2017, when Hogg's business and home were raided by officers from the ATO and the Australian Federal Police.

Hogg made full admissions during an interview with the ATO in September last year and was remanded to prison in January 2018 after indicating to the court he would plead guilty.

The Australian Federal Police has placed freezing orders over three properties owned by Hogg in Cheltenham, Elwood and Bonnie Doon, which are expected to be seized under asset-confiscation laws.

But many of Hogg's victims claim they should be entitled to the proceeds from the sale of his assets.

Barrister Graeme Halperin, a tax specialist representing several of Hogg's victims, has accused the ATO of ignoring the plight of small business owners, who had attempted to pay their taxes in good faith, but now face financial ruin.

"The ATO knows they are innocent victims ripped off by Hogg, a tax agent, who unscrupulously promoted a tax scam, but the ATO is washing its hands of them, maintaining the position that it’s not the ATO’s problem if they no longer have the money to pay the tax as a result of their tax agent defrauding them," Mr Halperin said.

An ATO spokeswoman previously told Fairfax Media that the department would consider reducing or waiving penalties, but expected the original tax liability to be settled.

"While affected taxpayers will usually need to repay any tax owing with interest, we generally reduce or eliminate penalties for those who work with us to correct their returns," the spokeswoman said.

Hogg will be sentenced in the County Court on Thursday.