Adam Cranston was accused of being a "co-conspirator" in the scam.
Police do not believe he had knowledge of the fraud, but allege he acted improperly at the request of his son Adam Cranston, who has been charged with criminal conspiracy.
Michael Cranston also allegedly sought to contact Tax Office investigators who were involved in the multi-agency probe.
Clutching his belongings in an Australian Federal Police-marked plastic bag, Mr Cranston loitered in the foyer of the Sydney Police Centre on Thursday afternoon as a wall of cameras waited outside.
Asked if he understood the terms, Adam Cranston said: "I do, Your Honour".
The Australian Prime Minister said Australia had "zero tolerance" for the type of conspiracy, fraud and abuse of public office that is alleged.
The tax office later became aware of the fraud through its internal systems and started working with the police, officials said.
Six people were charged with conspiracy to defraud the Commonwealth for their alleged role in the syndicate, while two men were charged with money laundering offences.
All up, nine alleged syndicate members were arrested and charged.
Mr Cranston's daughter Lauren, 24, and friend Devyn Hammond, 24, allegedly worked from laptops in a rented office in the Sutherland Shire, keeping detailed logs of illegal payments, companies and bank accounts.
Through this arrangement, a percentage of the pay-as-you-go income tax installments that should have been paid to the ATO were instead diverted elsewhere.
AFP The AFP also found a large collection of vintage wines.
A vintage car seized by the Australian Federal Police. Source AFP
Andrew Mills, Australia's acting commissioner for taxation, said that Mr Cranston, 58, who was suspended immediately, had "up until this point held an illustrious career".
Anquetil was arrested following his return to Australia from Europe yesterday.
News Corp. reported that the scammers believed they had struck a sweet spot where each individual tax underpayment was too small to trigger a tax office response.
His father and sister will face court in mid-June. The Wahronga man is set to appear before Newtown Local Court today, while the Balgownie woman is scheduled to appear before Wollongong Local Court today.
On Thursday, nine people were arrested over the "unprecedented" fraud that is estimated to have cost Australian taxpayers $165 million.
The alleged theft dates back to June 2016 and is estimated at $165m but could be much more.
AFP Detective Superintendent Kirsty Schofield said the first time investigators spoke to ATO official Michael Cranston was yesterday, when he was handed a court attendance notice.
ACT-based contractor Paul Johnston is still owed $4300 in superannuation, and before police arrested alleged syndicate members he was told by Plutus it would pay this before July.
The directors of these Tier 2 companies are known as straw directors.
"The syndicate members retain effective control", the AFP said.
The remaining withheld tax would allegedly go to the syndicate operators.