The Australian Taxation Office chief Chris Jordan has spoken out on the massive $165 million tax fraud scandal which has enveloped former deputy ATO commissioner Michael Cranston, saying it has compromised the ATO’s standing.

Speaking at the National Press Club in Canberra on Wednesday, Mr Jordan said the involvement of Mr Cranston’s son Adam Cranston in the scandal “has has been difficult to comprehend.”

He also said “the charges against Michael Cranston too, have been equally hard to believe. However “findings to date show Michael Cranston is not suspected of being involved in the syndicate and its activities of defrauding the Commonwealth.”

“The connections with, and alleged actions because of, his son, have ruined his career and reputation, and have compromised our standing and raised questions about the integrity of others within the ATO.”

Adam Cranston, 30, and his sister Lauren, 24, and eight others have been charged over an alleged tax fraud syndicate involving Sydney-based payroll company Plutus Payroll. The Australian Federal Police alleges a percentage of the funds that should have been paid to the ATO by Plutus was skimmed off by the syndicate and spent on lavish lifestyle expenses.

Michael Cranston was later charged with two counts of abuse of public office for allegedly obtaining information and exercising influence to obtain a benefit for his son.

“This is a precarious situation,” Mr Jordan said.” I am keen to defend our reputation and that of the people in the ATO, but have to remain open to looking at whether our processes, controls or systems need to be bolstered.

Mr Jordan referred the audience to AFP statements on Michael Cranston.

“The AFP always needed to consider whether Michael Cranston was involved in the conspiracy, however, subsequent investigation clearly demonstrated he was not involved… Michael Cranston is not being considered for conspiracy to defraud the Commonwealth.’”

“Evidence to date shows that at no time did Michael Cranston directly access taxpayer data systems or the audit cases under this investigation. There is no evidence of actual intervention or influence on the audit cases, or of money being refunded, or of tax liability being changed. And no deals were done.”

The situation was captured well by Neil Chenoweth in the AFR earlier this week, Mr Jordan said.

“’When Adam did reach out to his father for help last February, it was far too late. For Michael Cranston, the tension that drives a father to ignore the faults of their child, to want to help them no matter what, was overlaid by the overwhelming guilt and recriminations that are inevitable in any family break up”.

“Just to reiterate and conclude on this issue; to the best of my knowledge there has been no fraudulent or corrupt activity by ATO officers in relation to Elbrus and I will be delighted to have that independently confirmed by the reviews and investigations that are under way,” Mr Jordan said.

Before his resignation and subsequent charging, Michael Cranston was in charge of investigations into tax avoidance by high-worth individuals and private companies. His work with the ATO/AFP  Elbrus investigation ” uncovered staggering amounts of rapid wealth accumulation for members of a syndicate allegedly engaged in fraud, phoenix activity and tax evasion,” Mr Jordan said.