March 28,2017 (courtesy of the torontosun.com )- An Ontario Superior Court judge called it “absurdly easy” for a University of Toronto student to dupe the Canada Revenue Agency out of more than $41 million in HST corporate refunds.
Justice Shaun Nakatsuru sentenced Kevin Ekow Plange last week to 13 months in jail after the 28-year-old pleaded guilty to one count of fraud over $1 million.
The judge declared a mandatory minimum sentencing provision — which would have required Plang go to prison for at least two years — was unconstitutional. Nakatsuru said the provision amounted to “cruel and unusual punishment” and is no longer in effect.
“To sentence this offender (with no previous record) to a penitentiary sentence would shock the conscience of the community,” wrote Nakatsuru. “It would put a chill in the hearts of people who may have fudged financial numbers a bit in order to qualify for a loan or line of credit.”
Plange downloaded direct deposit forms from the CRA website. The HST refunds were paid into the bank accounts marked on these forms, said Nakatsuru.
Plange placed his personal banking information beside the names of some huge corporations, including Coca Cola Ltd. and Shell Canada Ltd. He mailed it in.
To his surprise, the CRA made an initial series of payments amounting to $35 million to his TD bank accounts in 2013.
The bank froze the funds, said Nakatsuru. In early 2014, Plange opened six bank accounts, filed more forms and obtained more than $5 million. Ultimately, the CRA sent Plange’s accounts a total of $41.8 million. Plange only grabbed $15,000 and he paid it all back.
“Bluntly, it was absurdly easy,” said Nakatsuru, adding that Plange made repeated, concerted efforts to obtain the money.
“He made a great many calls. He told multiple lies and he impersonated others,” said Nakatsuru.
Barring a successful appeal by the Crown, the mandatory sentencing provision is finished.
“This well crafted decision struck down the mandatory minimum,” said Plange’s lawyer Darren Sederoff.
“It is the first time this section has been deemed to be unconstitutional,” he added.
Federal Crown attorneys Lisa Csele and Yael Pressman sought six- to seven-year prison sentence, asserting the fraud could have meant a huge loss for taxpayers.
Csele said the Crown will consider appealing both the sentence and the striking down of the mandatory minimum sentence on huge frauds.