December 27, 2019 – The Canadian Revenue Agency (CRA) finished 2019 strong with major efforts combating domestic tax evasion and non-compliance in the real estate sector, serious tax evasion, and offshore tax evasion. The agency reported the execution of search warrants on 27 locations, including a total of 176 CRA investigators as well as three men were arrested and charged as a result of the investigations.
Combating domestic tax evasion and non-compliance in the real estate sector in Vancouver
16 CRA investigators executed two search warrants in the B.C. real estate sector on December 18. The agency was searching for evidence in a tax evasion case in Vancouver. They identified approximately $3 million in unreported income in an alleged attempt to evade payment of tax. The locations of the homes that were searched, and their owners, have not yet been disclosed. The criminal investigation is still ongoing.
The CRA announced in a press release continuing efforts to combat domestic tax evasion and non-compliance in the real estate sector. ‘The CRA has placed a significant focus in major centers such as the Lower Mainland in British Columbia, where there are consistently high numbers of real estate transactions. Today’s announcement further demonstrates how this focus is helping combat non-compliance and leveling the playing field for those who pay their taxes,’ explains the enforcement notification of the CRA.
As part of the efforts, the CRA started the real estate audit program. The program effectively targets Greater Vancouver and Greater Toronto properties. Since launching in 2015, the CRA has identified a total of $1.31 billion from its augmented real estate audit program, including $136.5 million from 2,188 penalties.
Between 2018 and 2019, there were 22 convictions, with 12 taxpayers sent to jail for a total of 19 years. These individuals were sentenced for willfully evading payment of $4,179,089 in taxes, according to the CRA.
Combating serious tax evasion of Hells Angels members in connection to illegal gaming scheme
On December 19, the CRA and the OPP announced a breakthrough in a complex multijurisdictional investigation concerning fraud and tax evasion in connection with an illegal gaming scheme operated by two members of the outlaw motorcycle gang Hells Angels.
Robert Barletta of London and Craig McIlquiham of Oakville were arrested and charged as the result of a joint criminal investigation of the CRA and the OPP. On December 12 and 13, search warrants were executed by over 160 CRA employees and other law enforcement agencies in 25 locations in Ontario and Quebec.
Project Hobart started in January 2018 which targeted the illegal activities of the organized crime network. A major illegal gaming enterprise operated by and linked to members of the Hells Angels among other illicit activities has been discovered during the investigation. Barletta and McIlquham are accused of operating five sophisticated illegal gaming websites: Ultimate SB, Titan SB, PlaytoWin SB, Privada SB , and Players SB.
Between January 1, 2019 and July 2019, the sportsbook brought in approximately $13 million in gaming revenue for the Hells Angels. Consequently, Barletta has been charged for failing to report revenues totaling over $770,000 dollars for tax years 2015 to 2018. McIlquham has been charged for failing to report revenues totaling over $2,000,000 dollars for the tax years 2014 to 2018. Additionally, McIlquham has been charged with fraud under the Criminal Code.
Combating offshore tax evasion in Montreal
On December 23, the CRA arrested Robert Kalfayan for tax crimes related to offshore tax evasion upon his return to Canada at Pierre Elliott Trudeau International Airport in Montreal. He has been charged with one count of fraud under the Criminal Code and tax evasion charges linked to various criminal offenses under the Income Tax Act.
The charges are the result of an investigation concerning fraud and tax evasion. Kalfayan is accused of using a complex fraudulent scheme to cover up his luxurious residence located in Laval from CRA collection measures. In order to do this, he allegedly used one of his foreign incorporated companies and a nominee to register a fictitious mortgage on his residence.
The CRA declared that the courts recognize the gravity of offshore cases by sentencing offenders to lengthier jail terms and imposing higher court fines. From April 1, 2014, to March 31, 2019, the courts convicted 17 taxpayers of tax evasion with links to offshore money and other assets. This involved over $7 million in federal tax evaded and court sentences totaling almost $6 million in court fines and 29 years in jail.
Marina Burghard writes for Canadian Fraud News about fraud-related cases, whistleblower, jurisdiction, identity theft, consumer protection, etc. – essentially about scams and how to protect yourself against this kind of fraudulent criminal behavior. She holds a Master’s degree in Political Science where her interest in criminology grew. Besides fraud, Marina’s scientific interest lies in terrorism, extremism and how to deal with it as a society.