But fledgling company Plutus Payroll had an image problem. Its "zero-fee payroll service", touted as the first of its kind in Australia, was raising eyebrows.

"This is looking a bit too flashy," said one user on online forum Whirlpool in November 2014. "Personally, I like my accountant [and] payroll people to be boring."

In a bid to counter negative publicity, Plutus began assiduously wooing prospective clients on social media and chat forums, including targeting regular posters and offering to shout them a coffee or a drink to discuss their "concerns".

Starting in early 2015, a series of posts appeared on Whirlpool from Plutus managers and executives, as critics questioned whether the business was "too good to be true".

"The insinuation that we are a scam is not fair or justified," said Plutus account executive Lachlan Brown, who is not accused of wrongdoing.

Josh Kitson, the general manager of contractor care at Plutus, confirmed the company charged "zero fees" for providing its PAYG payroll service to businesses.

The most common question, Mr Kitson said, was "how do we make money?" and the answer was "marketing other financial services" to clients via a newsletter.

But the AFP believes the real money was in a $165 million tax racket involving seven key players including Adam and Lauren Cranston, the children of Tax Office deputy commissioner Michael Cranston.

Mr Kitson is not accused of being involved in the scheme but his friend, former Plutus chief executive Simon Anquetil, was charged on Friday as one of the co-conspirators after returning voluntarily from Europe.

The AFP alleges Plutus was skimming off millions of dollars in PAYG tax instalments that should have been paid to the Tax Office on behalf of clients who took advantage of Plutus' no-fee payroll service. The alleged racket started in June 2016.

Among the clients lured by Plutus' pitch were government departments and agencies including the National Blood Authority, which had a contract with Plutus from December 2016 to February 26 of this year.

Employees who complained about not being paid after the ATO froze the company's bank accounts on April 27 came from a raft of state and federal government departments, including the justice department, Transport for NSW, Defence, Foreign Affairs and Trade, Social Services and Border Protection.

Workers at Telstra, Fujitsu Australia and IT company FinXL are also understood to have complained about late payments.

As recently as March, Mr Kitson was assuring sceptics on Whirlpool that Plutus "could not and cannot be in business if we were to engage in any behaviour that was outside of the strict regulatory environment in which we operate".