CRA officials had hand in $1-million kickback scheme, Mounties allege

Officials at the Canada Revenue Agency were part of attempts to squeeze a $1-million kickback from an accounting firm in exchange for a promise to wipe out a massive tax bill, an RCMP search warrant alleges.

The court document adds to allegations of corruption at the federal tax-collection agency involving senior staff in the Montreal offices of the CRA and retired officials who left the agency to become tax consultants.

The document says that in 2001, a CRA auditor named Nick Iammarrone started examining the books of a numbered company belonging to accountant Jacky Schryver.

The next year, the warrant said, Mr. Schryver received a visit from someone called “George” who took him into his firm’s parking lot. “George” told Mr. Schryver that he was facing a $10-million tax bill, which he could make disappear in exchange for $1-million.

“We fix things,” the search warrant obtained by Montreal’s La Presse and The Globe and Mail alleges that “George” told Mr. Schryver.

Mr. Schryver refused the deal, saying he could not believe that the assessment from the audit would come in at $10-million.

Still, in 2003, Mr. Schryver was invited to meet with two accountants who asked for $300,000 in cash to annul his eventual assessment. One of the people at the meeting was Raymond Lalonde, a former high-ranking official in the Montreal offices of the Canada Revenue Agency, according to the RCMP document. The warrant did not indicate where Mr. Lalonde is now.

No deal was struck, and about a month later, Mr. Schryver received a $10-million assessment, which he tried to fight in court. During the process, he complained to the CRA’s internal affairs about the alleged squeeze play.

None of the allegations in the new warrant, or others that are part of a wider RCMP investigation into other allegations of corruption at the CRA, have been proven in court.

Last April, the Mounties charged three former CRA officials with a total of 12 charges of fraud and corruption.

“The accused allegedly attempted to extort money from restaurant owners in exchange for lower income tax assessments,” the RCMP said in a news release.

The charges were the first to be laid as part of the RCMP’s four-year-old investigation, dubbed Project Coche. So far, the CRA has fired at least seven auditors and team leaders as part of the ongoing investigation.

“The RCMP investigation into these allegations of corruption within the Canada Revenue Agency was initiated in 2008 and is still ongoing,” the RCMP said. “More charges could be laid in this matter.”

Revenue Minister Gail Shea has said that the government “will not tolerate this type of misconduct.”

“CRA employees are in a position of public trust and we demand professional and ethical conduct. This is why our government has increased our budget for internal investigations by 127 per cent and we have nearly doubled the number of internal investigators,” she said.

In recent search warrants, the RCMP has alleged that other CRA officials helped firms in Quebec’s construction industry evade taxes. The RCMP has also alleged in search warrants that CRA officials received gifts or compensation from a construction firm, including free home renovations, trips to Las Vegas and the Bahamas, and an upscale evening at a Montreal Canadiens home game.

Two CRA auditors were fired in 2009 after investigators alleged that they shared a bank account containing $1.7-million in the Bahamas with Francesco Bruno, owner of construction firm B.T. Céramique.

Original Article
Source: the globe and mail
Author: Daniel Leblanc