Prime Minister Malcolm Turnbull says it's "very regrettable" a syndicate allegedly defrauded taxpayers of at least $165 million by running a payroll scam out of Sydney.
But he's congratulated the Australian Federal Police for cracking the conspiracy, with nine people arrested so far.
Australian Taxation Office deputy commissioner Michael Cranston has been issued with a court attendance notice for allegedly abusing his position as a public official.
AFP say Mr Cranston was not part of the syndicate, which involved his son.
"This is very much to be regretted," Mr Turnbull told reporters in Brisbane on Thursday.
"Nobody should imagine they can escape our law enforcement agencies no matter how high they may be in a government department.
"No matter how high they may be, they are being watched."
The prime minister said the fact the alleged conspirators had been caught proved the system worked.
"We have zero tolerance for this type of conspiracy, this type of fraud, this type of abuse of public office," he said.
"We have a relentless pursuit of corruption, malpractice, abuse of office, the AFP have a very keen focus on it ... as has been demonstrated."
