Black market for ‘clean’ Australian companies fuelling new wave of business fraud

Within the increasing complexity of corporate fraud, there is a growing black market in aged Australian companies and stolen corporate identities emerging as a new front in business fraud. BDO Forensic Services Partner, Stan Gallo, says the trend is increasingly surfacing in investigations across the small and mid-market sector.

Stan said forensic teams are being called into matters where the entity involved in a fraud is not fictitious, but a legitimately registered Australian company with a clean ASIC history and active ABN.

“What we’re seeing is a shift away from obviously false entities to the misuse of real, established companies that have either been quietly acquired, repurposed or had their control compromised,” he said.

There are an increasing number of cases where dormant or shelf companies were reactivated shortly before submitting high-value invoices, entering procurement systems, applying for finance and government-linked funding or submitting GST refund claims.

The companies passed standard onboarding checks because their ABNs were valid, their registration history appeared clean, and their directors were properly recorded at the time of verification.

“The problem is that most verification processes are designed to confirm that a company exists and is appropriately registered and recorded, not that it is controlled by who you think it is,” Stan said.

“Age and registration status are being weaponised as a proxy for trust.”

He said the commoditisation of corporate identities on encrypted forums and messaging platforms has lowered the barrier to entry for organised fraud groups seeking credibility.

“An aged Australian company with no compliance issues now has resale value in criminal markets. That’s a structural vulnerability.” 

“We’re seeing real financial losses where governance frameworks were technically followed but still failed,” he said.

“Corporate identity integrity is becoming a distinct risk category, and businesses need to adapt their controls accordingly.”
 

---

For media enquiries:

Tate Papworth 
Manager, Media 
E: Tate.Papworth@bdo.com.au 
Ph: 0433411189