Enforcement Notification - Tax evasion: Tax fraud connected to the Scientific Research and Experimental Development Tax Incentive Program: two Quebec taxpayers sentenced

MONTRÉAL, June 10, 2022 /CNW Telbec/ - The Canada Revenue Agency (CRA) announces that Alain Côté, of accounting firm ACGI Inc., from Lachute, and Salvatore Leo, administrator for Les aliments spécialisés Impresa international Inc. (Impresa), based in Montréal-Nord, were sentenced for fraud at the Montreal Courthouse. Mr. Côté pleaded guilty on March 26, 2021, and was sentenced on June 8, 2022, to a 20-month conditional prison sentence and 240 hours of community service, in addition to being fined $50,000. Mr. Leo pleaded guilty on June 8, 2022, for the same scheme and he was sentenced to a conditional 15 months in prison. Mr. Leo also paid a $421,360 fine, equivalent to the full amount of the tax credits received illegally.

The CRA investigation showed that Alain Côté was using the identity of clients of his accounting firm, ACGI inc., to create false invoices for the benefit of Impresa, managed by Salvatore Leo. This scheme allowed Impresa to receive $421,360 in fraudulent Investment tax credits for the 2008 to 2011 tax years in the Scientific Research and Experimental Development Tax Incentive Program.

All case-specific information above was obtained from the court records.

Tax evasion is a crime. Falsifying records and claims, wilfully not reporting income, or inflating expenses can lead to criminal charges, prosecution, jail time, and a criminal record. From April 1, 2020, to March 31, 2021, there were 36 convictions, with court imposed fines totalling $5,172,844. These taxpayers were sentenced for wilfully evading payment amounts totalling $10,902,950 in federal tax. Out of the 36 convictions, 15 individuals were sent to jail for a total of 26.2 years.

In addition to the court imposed fines and/or jail sentences, convicted taxpayers have to pay the full amount of tax owing, plus related interest and any penalties assessed by the CRA. 

The CRA is dedicated to maintaining the integrity of Canada's tax system, thereby contributing to the social and economic well-being of Canadians, particularly during these unprecedented times. The CRA continues to aggressively pursue tax evasion, and false claims with all the tools available to it. The CRA works to make sure that individuals and businesses report all income earned and only claim benefits to which they are entitled, so that important benefit programs can be administered to those who need them. Any individual or business who claims losses or benefits that they are not entitled to, including ineligible claims related to new COVID-19 benefits, will face serious consequences.

The CRA has set up a free subscription service to help Canadians stay current on the CRA's enforcement efforts.

Associated Links
Leads Program 
Voluntary Disclosures Program 
Scientific Research and Experimental Development Tax Incentive Program

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SOURCE Canada Revenue Agency

Media Relations, Karl-Philip Marchand-Giguère, Canada Revenue Agency, 438-270-9856, [email protected]