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SYDNEY, May 18 (Reuters) - One of Australia's top anti-fraud tax officials faces charges after his son and eight friends were arrested in raids that netted cash, luxury cars, two small planes, guns and vintage wine in a A$165 million tax fraud, police said on Thursday.
Police said Australian Taxation Office (ATO) Deputy Commissioner Michael Cranston was an unwitting participant in fraud after he accessed tax office systems at the request of his son, Adam.
"We're alleging that he has publicly abused his position as a public officer and senior official of the Commonwealth," Australian Federal Police Deputy Commissioner Leanne Close told reporters in Sydney.
"We don't believe that at this point that he had any knowledge of the actual conspiracy and the defrauding," she said.
Michael Cranston has not yet been charged but has been summoned to attend court next month in connection with perhaps the biggest white-collar tax fraud in Australian history.
Police allege that Adam Cranston, 30, and his eight friends diverted funds from legitimate payroll-processing companies, which were earmarked for tax liabilities, to numerous subsidiaries, in the process defrauding the ATO of A$165 million ($123 million) in unpaid taxes.
They were arrested on Wednesday and charged with offences including fraud and money laundering. More than 100 bank accounts and shared trading accounts were frozen as part of the investigation.
Police impounded more than 25 cars, along with two planes, and 12 motorbikes. They also seized guns, jewels, paintings, and Grange hermitage wines, one of the world's top vintages.
Raids involving almost 300 police across Sydney also found A$1 million in banknotes in a safe deposit box, Close said.
She said the scheme was the largest yet uncovered "in terms of the number of conspirators and the amount of money involved".
White collar crimes of such magnitude are relatively uncommon in Australia, although Reuters reported last month that Michael Cranston was leading a tax office probe into hundreds of secret Swiss bank accounts linked to Australians as part of a global tax evasion and money-laundering investigation.
"This is very much to be regretted," Australian Prime Minister Malcolm Turnbull told reporters in Brisbane after hearing of Thursday's arrests. ($1 = 1.3450 Australian dollars) (Reporting by Tom Westbrook; Editing by Jane Wardell and Paul Tait)