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Vancouver businessman found guilty of tax fraud

Vancouver (June 23, 2020) – A B.C. Provincial Court found Michael Curt Helmut Scholz of Vancouver guilty of tax fraud on June 18. The CRA said, he provided forged documents to reduce taxes on real estate. Between December 2009 and April 2013, the West Vancouver businessman claimed almost $645,000 in input tax credits. He has been charged with two counts of uttering forged documents and three counts of committing tax-related offenses. The sentencing will follow at a later date.

The Canada Revenue Agency (CRA) announced in a press release that the West Vancouver man, Michael Curt Helmut Scholz, was found guilty of fraud and forging documents to avoid paying taxes on real estate.

Tax fraud in the real estate sector

The CRA revealed in an investigation that Scholz provided forged documents to CRA officials to claim input tax credits, he was not entitled to, in order to reduce taxes owed on a home in West Vancouver. The claimed input tax credits ‘related to the property’s design and construction’ totaled $644,975.71 between December 31, 2009, and April 1, 2013.

The B.C. businessman was aware that he could only claim these tax credits if he was the property’s beneficial owner and if the property was intended for resale, according to the federal agency. Subsequently, Scholz provided, first, a forged bare trust agreement alleging his beneficial ownership of the property. The agency accuses Scholz submitted the forged document to mislead the CRA into allowing a refund to be issued to him.

Second, Scholz also provided a forged lease agreement to the CRA. His objective was to decrease the property’s assessed value used to calculate the additional taxes owed, concluded the agency.

Found guilty of tax fraud

A Provincial Court of British Columbia found Scholz guilty on June 18 of two counts of uttering forged documents and three counts of committing tax-related offenses. He has not yet been sentenced.

‘Willfully failing to follow tax laws could result in serious consequences, including reassessments, the imposition of civil penalties, criminal investigations, and prosecutions, resulting in the imposition of court fines, jail time and a criminal record,’ reminded the CRA in the press release. Since 2015, the CRA has increased audits of the real estate sector while focusing on major centers such as the Greater Toronto Area and the Lower Mailand in British Columbia, where there are consistently high numbers of real estate transactions. Between April 2015 and December 2019, the CRA identified $647.8 million in taxes owing from the B.C. real estate sector including penalties assessed and $783 million in Ontario.

Read more: CRA achieves successes in major efforts combating tax evasion in December 2019