Jonatan Kelu and Cedric Adrian Millner faced the NSW Supreme Court on Thursday after being convicted of evading $42 million in GST in 2012 and 2013.
In July, a jury found them each guilty of two counts of conspiring to cause loss to the Commonwealth.
Only around $16 million of the defrauded funds had been recovered, the court heard on Thursday.
"What happened to the rest?" asked Justice Richard Cavanagh.
"There's a lot of money missing here."
Gerard Craddock KC said the pair's silence on the missing funds should not influence sentencing.
Crown prosecutor Gerard Craddock KC said the pair's silence on where the missing funds were was not an aggravating factor in determining their final jail sentences.
Kelu's barrister Madeleine Avenell and Millner's barrister Sharyn Hall SC agreed.
Ms Hall suggested this situation was similar to a murderer who would not say where the body was.
That decision would not result in a harsher sentence but would affect whether that person could be released on parole, she told the court.
"In circumstances in which so much money is missing, why shouldn't the offenders ... be doing their best to identify where all of the money went to?" Justice Cavanagh asked Ms Avenell.
The community should be shown it was not possible to defraud millions and hide where the funds are, spend a few years in jail and then suddenly live an extravagant lifestyle after release, the judge said.
During a brief adjournment, Kelu and Millner told their legal teams they could reveal the location of the remaining funds.
Jonatan Kelu left the court on bail carrying a green cloth grocery bag.
Earlier in the day, Mr Craddock said it was "inescapable" that the primary motivation for the scheme was greed.
"Their purpose was to make as much money as they could," he said.
An email from Kelu to Millner showed that by November 2012 the duo had profited by around $3.3 million from the scheme after expenses such as the cost of buying the gold had been deducted.
Some of the defrauded money was pumped into Kelu and Millner's real estate ventures, while other funds were invested in scientific research by an Australian biotechnology firm.
The duo are being chased for around $140 million in total, which includes the $42 million fraudulently taken, financial penalties on the two men and interest on the money owed.
Justice Cavanagh pointed out that neither Millner nor Kelu had led lavish lives with mansions, fast cars and boats as a result of the fraud.
The judge said he was "baffled" by the case, calling it a "complete mystery" as to why two decent people without any criminal record would commit the offence.
He heard the pair had shown no remorse for their actions with Kelu still maintaining his innocence even after the conviction.
Ms Avenell and Ms Hall both argued their clients should be given more lenient sentences because of the added stress caused by a delay of almost 10 years between the investigation and trial.
The pair were charged in January 2018 after a five-year investigation by the ATO and police that consisted of 34 search warrants, 330 witness statements and 1.8 million pieces of evidence found on electronic devices.
Millner watched the sentencing hearing by video link from Macquarie Correctional Centre, while Kelu sat in the public gallery and left the court on bail carrying a green cloth grocery bag.
They are due to be sentenced on November 23.
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