False invoicing: Longueuil demolition company found guilty of tax evasion

LONGUEUIL, QC, April 21 /CNW Telbec/ - Dégarnissage Demag Inc., a Longueuil demolition company, pleaded guilty today to tax evasion charges at the Longueuil courthouse. The company was fined $75,353, which represents 100% of the federal tax it tried to evade.

The Canada Revenue Agency (CRA) investigation revealed that, for the 2004 to 2007 tax years, the company voluntarily contravened the Income Tax Act by deducting false invoices totalling $507,118 on its income tax returns. These invoices originated from Recyclage 2000 Inc., as well as from "dummy" corporations, namely Bétonnière R.B. & D., Recyclage M.G., Démolition M.A., Récupération M.A., Transport de Béton V.A. Inc. and M.V.D. Recyclage.

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.

In addition to the fine imposed by the Court, the company will have to pay the full amount of taxes owing plus related interest and any penalties that apply.

The CRA actively pursues tax evaders to maintain public confidence in the integrity of the tax system. The government is committed to protecting Canada's tax base and continues to take action against the underground economy.

Individuals 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 will not be penalized or prosecuted if they make a full disclosure before the CRA takes any action or starts an investigation concerning them. These individuals will only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program can be found on the CRA Web site at www.cra.gc.ca/voluntarydisclosures.

The information in this news release was obtained from the court records.

Additional information on convictions can be found on the Media page of the CRA Web site at www.cra.gc.ca/convictions.

For further information: Kareen Dionne, Communications Manager, [phone], ext. 8288, 1-800-292-3430, ext. 8288