MONTREAL, June 11, 2012 /CNW Telbec/ - Town of Mount Royal's Cre-O-Pack Packaging International Inc. pleaded guilty today to tax evasion charges before the Court of Quebec in Montréal. It was fined $89,892, which represents 100% of the federal tax it tried to evade. In addition to this fine, it will have to pay all federal taxes owing, plus related interest and any penalties that apply.
A Canada Revenue Agency (CRA) investigation showed that, for the 2004 to 2006 tax years, Cre-O-Pack Packaging International Inc. voluntarily contravened the Income Tax Act by making false or deceptive statements. The scheme used by the company consisted of using false invoices to reduce its taxable income. As such, the company claimed $400,514 of fictitious expenses from false invoices issued by René Bélanger, a now retired taxi driver. Monetary transactions were carried out by Gérard Martel, also a taxi driver.
The above information was obtained from the court records.
False invoicing is a scheme through which individuals or companies obtain invoices from generally inactive companies for fictitious work. The invoices are then used to fraudulently reduce the companies' or individuals' revenues. The resulting tax savings are shared by the scheme's participants to use as off-the-books salaries or for personal gain.
Taxpayers who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They may not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the CRA against them. These taxpayers may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA's Web site at www.cra.gc.ca/voluntarydisclosures.
Additional information on convictions can be found on the Media page of the CRA Web site at www.cra.gc.ca/convictions.
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