Controversy: Barry O’Sullivan has been asked to explain his offshore accounts to the ATO.Barry O’Sullivan, the wealthy detective-turned-property developer who was recently chosen to replace Barnaby Joyce in the Senate, is one of the many high-profile Australians who has had a company registered in the British Virgin Islands.

Mr O’Sullivan has been a divisive figure in Queensland politics. Last year he was in the spotlight over an appointment to a state government audit job while he was a party executive.

Only last week, a series of conversations secretly recorded by former Queensland Liberal leader Bruce Flegg revealed that, in 2011, Mr O’Sullivan and Dr Flegg discussed ways to topple then opposition leader John-Paul Langbroek.

”It’s 7 o’clock in the morning. We should be rolling over and patting someone on the arse,” joked Mr O’Sullivan as he and Dr Flegg sat in a cafe, cold-bloodedly discussing how to knife Mr Langbroek and replace him with Campbell Newman.

”He’s been at the centre of so much embarrassment to the party for the past year or two, they just cannot be serious,” said former Liberal MP and radio presenter Gary Hardgrave, of the push to install Mr O’Sullivan as Mr Joyce’s replacement.

Mr O’Sullivan, the former Liberal National Party state treasurer, recently received a ”please explain” letter from the Australian Tax Office over his offshore company.

”We have identified people we believe we should at least be asking questions of, and giving them an opportunity to explain to us in the first instance how and what is going on,” said the ATO’s Greg Williams, deputy commissioner of serious non-compliance.

Mr Williams confirmed that the US, British and Australian tax authorities are working together on possibly the largest tax investigation in history.

In 2010, millions of files from two companies including Portcullis TrustNet, which manages offshore companies in tax havens for wealthy people, was leaked to the International Consortium of Investigative Journalists.

The Portcullis documents indicate Mr O’Sullivan set up Asia Pacific Claims Management in the British Virgin Islands in March 1998.

The burly would-be Senator confirmed he recently received an inquiry from the ATO about his offshore company. ”That company has never, not for one day, not for one week, not for one month, not for one year since 1999 until now, ever operated,” Mr O’Sullivan said.

Mr O’Sullivan said he was a detective for 15 years and for the following two decades after leaving the police force he ran an international business ”preparing briefs of evidence predominantly for US [law] firms for clients who had been injured in catastrophic air crashes”.

Mr O’Sullivan said that because ”we had a presence all over the world” a law firm in Singapore suggested he establish an offshore company.

He said it cost him ”an arm and a leg” to set up, but when he returned to Australia, his accountants advised him against having an offshore entity.

”Here was my mistake, which I am alive to now; I just automatically assumed it [his BVI company] would be wound up … It wasn’t a case of trying to go up a shady alley somewhere,” he told Fairfax Media.

Mr O’Sullivan said his accountants were working on getting all the documentation together and the ATO had agreed to give him extra time to comply with their queries due to an accident in which his five-year-old grandson was seriously injured when he fell from a ride at a school fete.

NSW state independent Richard Torbay was set to contest the federal seat of the Northern Tablelands for the National Party. But his dramatic resignation from public life over a donation scandal left the way clear for Mr Joyce to contest a lower house seat.

Mr O’Sullivan, who has made a fortune in property development, was chosen to replace Mr Joyce in the Senate. In February, Mr Joyce notified the Parliament he had accepted a flight between Brisbane and St George on a private four-seater plane owned by Mr O’Sullivan.

Bets scheme trail links Pickering with secret offshore companies

Cartoonist, bankrupt and failed businessman Larry Pickering has always claimed he had nothing to do with a sports-betting software scheme that fleeced hundreds of investors of millions of dollars.

”I feel sorry for people who lost money but I had nothing to do with it,” Mr Pickering told The Daily Telegraph two years ago.

But now evidence has emerged to suggest Mr Pickering was using secret offshore companies incorporated in the British Virgin Islands and managed out of Hong Kong to channel funds generated by the scheme.

The documents were leaked to the International Consortium of Investigative Journalists, which has published ground-breaking stories this year that have rocked private banking.

The 70-year-old, who has recently devoted himself to writing defamatory blogs about the Prime Minister, has 11 children to five women and lives in a mansion on the Gold Coast.

Emails and company documents generated by his own accountant – Portcullis TrustNet, a global firm that specialises in trust schemes in tax-free countries – reveal his companies were referred to the Hong Kong police because investors wanted their money returned.

Software vendor Cohen Strachan Investment Pty Ltd failed in 2010. Its sports-betting software was faulty and customers reported they believed their accounts were being manipulated or did not exist.

In an October 2006 email, Jamie Williams, a Portcullis TrustNet employee who had helped administer Mr Pickering’s offshore companies, confirmed to his colleagues Mr Pickering’s involvement in the affair. ”I believe the companies were all involved in the same business which I think was selling PC software over the net,” he wrote.

”I understand the companies had some complaints from customers about the products. The customers wanted their funds returned and complained [to] the bank [Standard Chartered in Hong Kong]. The bank returned the funds. LP [Larry Pickering] disputed whether the bank should have returned the funds.”

The email went on to describe how two companies linked to Mr Pickering were the subject of Hong Kong police requests for information. The documents show Mr Pickering’s secret offshore companies also owed thousands of dollars to a string of overseas companies that sent debt collectors across the globe to hunt for him.

Standard Chartered itself was owed $HK58,0307.87, postal company UPS had $HK85,707.23 outstanding and two other companies were demanding $HK44,773.84.

He is listed in the documents as ”the beneficial owner” of Cable Tower Limited, Azure Dene Limited and Soft Holdings Limited, all of which are incorporated in the British Virgin Islands, according to the Portcullis TrustNet documents.

The two firms that owed the money were Azure Dene (ADL) and Soft Holdings (SHL). His signature appears on their registration documents, which have been seen by Fairfax Media.

”Amazingly LP [Larry Pickering] now claims that he is not and was never the beneficial owner of ADL and SHL … This is contrary to what LP has previously told us,” an internal Portcullis email said. At one point, a manager referred his staff to an email he had written to Mr Pickering: ”I think it is time to get tough.”

When Fairfax Media listed the companies to Mr Pickering, he initially said: ”Never heard of it. I’ve got no offshore stuff, mate.”

He later said he had some Hong Kong companies, but ”that was back in the ’90s”. When told the documents dated from 2006, he said ”I don’t believe that’s the case.”

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The original release of this article first appeared on the website of Hangzhou Night Net.