Media Advisory - RCMP Warns Public of "Tax Evasion/Avoidance" Scheme
10 Jun, 2013, 13:38 ET
TORONTO, June 10, 2013 /CNW/ - The Royal Canadian Mounted Police (RCMP) GTA Financial Crime Unit is warning the public of a tax evasion or tax avoidance scheme.
We have received reports from individuals advising us that they had invested in a financial product, under the title of "joint venture". This scheme offers a ratio of return of 5 or 6 to 1 on every dollar invested. This fraud scam is similar to a "tax charity" format where for every dollar donated to an alleged charity, a tax deduction receipt is provided at a multiplied rate of return.
These kinds of investment products are advertised as offering an economic benefit. They are designed to create business losses which are used to reduce an investor's personal income tax. The pooled investor funds are supposed to be invested in so-called struggling companies which, in turn, sign over their business losses to be shared amongst the investors at a multiplied rate. These products are advertised throughout a variety of venues including "road shows", electronic media, or are offered by unscrupulous investment advisors.
The RCMP offers the following tips to help the public remain safe from these types of fraudulent tax schemes:
- Be cautious of an investment where you lose your initial investment (i.e. principle) and have to re-invest every year to receive a tax deduction;
- Beware of investment products that provide a multiplied rate of return on your funds for a tax deduction (i.e.: 5 to 1 ratio);
- Beware of tax related schemes where you are promised a tax receipt for more than you invest;
- Consult reputable investment and/or tax professionals before investing in unknown tax related products;
- Report suspected fraud. If you suspect a tax or charity-related fraud, report to the appropriate authorities.
If you believe you have invested in a tax evasion/avoidance type product, please report it to Canadian Anti-Fraud Centre (www.antifraudcentre.ca or 1-888-495-8501).
SOURCE: Royal Canadian Mounted Police
For further information:
Sgt Richard Rollings
RCMP "O" Division (Ontario)
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