Canada Revenue Agency (CRA) Auditor Convicted of Corruption

CRA LogoI came across a news article this morning that a Canada Revenue Agency (CRA) auditor from Montreal was convicted on Friday June 12th on charges of corruption for attempting to extort $90,000 from a restaurant owner in lieu of a $600,000 audit assessment.

Upon seeing the article, I went to see if I knew any of the people involved, which I did not, and it brought back my memory of the only time I was offered a bribe while working at the CRA, which I obviously declined.

I was the Resource and Complex Case Officer in a Collections unit here in Toronto and one of my accounts involved a gentleman who had a habit of opening and closing companies over a 27-year period.

He would never file, the auditors would assess his balance, he would bankrupt the company and the next day he would open a new one. He even used the same bank, but would open and close accounts over-and-over again.

It was quite funny given that he denied everything, even his $1 / year income but with a $5-million dollar house all paid off, it took me one phone call to put everything together.

He was a nice guy… Honestly. His house was built by him and his kids, on land his father bought 45-years ago, and the assessments the CRA were charging him with – prompting him to bankrupt the companies – was not even related to the business he was in.

He didn’t know why they were assessing him. He was afraid the CRA was going to put him in jail.

The CRA thought he was a criminal and kept on top of him.

One giant misunderstanding, which was quickly resolved after I taught him how to file HST returns.

But when I first met him and presented him with a list of companies that he had opened and closed year-after-year, he said this to me;

“I’m connected to the mob.”

I said to him, “Okay. That’s not my business. What is my business is finding out why you keep doing this and what the CRA can do to help you.”

He said, “If you can make this balance go away, I’ll give you Toronto Maple Leaf tickets.”

After I stopped laughing, I said to him, “Are you kidding me? I’m a huge hockey fan, and I love the Leafs, but if I were to even consider a bribe that would result in me losing my job, going to jail, and not being able to see my children, it would have to be for a hell of a lot more than Leafs tickets, and to be honest, if you have THAT much cash, you’re better off paying your debts and never falling behind on filing or paying again.”

He replied; “I was just kidding.”

I said, “Of course you were.”

I mentioned it to my Manager who, after reviewing the file, suggested I run this by the Special Investigations unit. I spoke to SI and they knew of this gentleman and that he has been suggesting his ties over the years in hopes of having the CRA back off, and only when I explained the reasoning behind the debt did the SI manager mention that he was told this many years ago but didn’t believe it to be true.

I wonder what happened to that guy…

I hope he stayed compliant!

Back to this case.

This case relates to an auditor named Francesco Fazio who, in 2005, was auditing a restaurant named “La Belle Place.” and after completing the audit, told owner Stamatis Argiroudis that he would owe $600,000 in taxes based on Fazio’s estimate of unreported revenue, according to a Montreal Gazette report.

According to testimony from the trial, Fazio told the owner that a more favourable estimate could be made for $90,000.

The owner refused to pay the money and probably words were spoken and the file was transferred to another CRA auditor. The auditor said the owner mentioned connections to organized crime, however the judge presiding over the case did not believe this to be true and ruled against the auditor.

In this day and again of recording devices in our phones and the CRA snitch line, it’s important to be careful what you say, and to whom you say it. Same goes for using social media. Be careful what you say about people and businesses when it’s not true.

I hope the CRA conducts an investigation into all the companies that this audit has audited to see if there is a recurring pattern or if this was a once-off situation.

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Author: Warren Orlans

Welcome to inTAXicating. My name is Warren Orlans and this is my blog. With over 17-years experience in the taxation industry, 11 of them working for the Canada Revenue Agency (CRA), and the rest working in the private sector at large financial institutions responsible for resolving tax issues for corporations and individuals and the Canadian lead for a large US bank on FATCA implementation. My tax career began pretty much out of university at the CRA, in Collections, where I moved up, across, over and up again through their division with stops in Enforcement, Taxpayer Relief (then Fairness), Audit, Directors Liability, Training, Mentoring, GST, GST/HST, Payroll, Corporate Tax, Personal tax, and probably much more. If you have a collections, compliance or audit issue with the CRA, inTAXicating is the place you need to contact. inTAXicating works in strategic partnership with amazing tax lawyers, insolvency practitioners, mortgage brokers, debt counselling experts and much more. When dealing with governments, knowledge is power. We possess strong understanding of government so we know what the next step is before the government does. When you have a collections problem with the CRA, do you hire a graphic artist? No, you get a former collector who trained the staff, and who worked as a resource officer for 5 years. Then you know you are on the right track to resolving your tax problem(s). Others offer suggestions. We offer solutions! info@intaxicating.ca

One thought on “Canada Revenue Agency (CRA) Auditor Convicted of Corruption”

  1. Did you hear the one about the CRA, starting in 2002 on, sending in a team of undercover Criminal Investigators pretending to be GST auditors so that they could illegally gather evidence to charge the taxpayers with tax evasion and send them to prison?

    Not yet huh, it gets better, the same CRA employees swore false affidavits, altered dates on receipts for books and records, as well as throughout their so-called Audit Working papers, only to be found out later by the Department of Justice lawyer making the decision to prosecute.

    Well that team-playing, Crown Counsel, at the DOJ, decided to look the other way and advised the CRA on a new and improved strategy to accomplish their joint prosecutorial goals. What did the DOJ recommend would work? “Re-write History” was the solicitor-client advice given. Is that legal, asks the CRA? Sure says the dedicated and highly respected, DOJ lawyer, throwing ethics and Canada’s Criminal Code out the window, that fateful day in early 2009. “We’re in” says the bosses at the CRA, “you sure never know how far the DOJ will go to help us get what we want”. “We sure wish all the DOJ lawyers could turn a blind eye to our criminal wrongdoing, we’d all get more raises and bonuses.”

    The short version is: In 2002, the CRA suspected that the taxpayers had evaded taxes, the CRA broke every law known in Canada to gather evidence to prove their suspicions, completely falsified and fabricated their internal working papers and reassessments, swore false affidavits, recommended to the DOJ that charges to be laid against the taxpayers, the DOJ covered up the CRA’s illegal acts, and thereby co-conspired in breaking Canada’s Criminal Code, the DOJ drafted new Requirements for Information and Records as well as applied and received Compliance Orders on behalf of the CRA knowing that the CRA had broken the law, the DOJ continued to pursue the prosecution of the taxpayers until the taxpayers’ forced the DOJ to either charge or reassess the taxpayers so that we could defend our position, to this date the DOJ continues to protect its criminal wrongdoing in the Tax Court of Canada by bringing Motion after Motion to prevent Full Disclosure thereby preventing the taxpayers from “Fairness and Justice” that most Canadians would expect to receive in our so-called free society.

    Eventually Justice will be served against the CRA & DOJ employees who have broken Canada’s laws, for now, we just want to get our lives back from these highly paid experts in extortion. The best system might be to scrap the self-assessment system in Canada and follow Russia’s system under Putin, we’ll decide whether you’ve paid enough taxes, no search warrants and no taxpayers’ rights, and best of all, guilty until proven innocent, unless of course you pay the piper on time, when they come a calling.

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