SYDNEY, NS – Prosecutors continued to show examples Thursday of a program by four defendants to file false tax returns to claim tax rebates.
“We wanted to show that the files were completely decoupled from reality,” said Federal Prosecutor Constantin Draghici-Vasileau before the Supreme Court Justice, Robin Gogan.
Draghici-Vasileau has been interrogating the Canadian tax inspector, Michael Boudreau, who compiled the agency’s case against the defendants for a week.
Boudreau guided the court through a series of government files on the defendants, as well as reviewing bank statements and other financial information.
What has emerged are cases where businesses operated by the defendants claimed to have made millions in sales while claiming the associated sales tax rebates, but their books and receipts do not confirm such sales.
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The trial has already heard testimony from Boudreau showing that a defendant used $ 58,000 on a line of credit to report business sales and claim a tax of $ 8,960.
The accused are Lydia Saker, 76, of Sydney Mines; and her daughters Georgette Young, 49, of North Sydney; Angela MacDonald, 47, of Kentville; and Nadia Saker, 45, from Leitches Creek. All defendants represent themselves.
The family is said to have applied for false tax rebates at the CRA.
The four people plus 10 companies they run are confronted with a total of 60 criminal offenses: 40 cases of fraud (criminal code violations) and 20 cases of false and misleading information (violations of the excise tax law).
The crimes are said to have occurred between January 2011 and July 2015.
During that period, CRA paid out $ 275,960 in refunds to the companies, along with an additional $ 81,399.61 applied to corporate debt to CRA totaling $ 307,360.
The defendant requested a total of approximately $ 3.6 million in reimbursement.
Testimony has shown that the stable of family-run businesses routinely bills the other business for services that range from marketing to labor.
Companies included Housewives in Heels, Artisan Hair Loss Therapy, Latatia Advertising, Maddie and Bella’s Children’s Clothing, New and Chic Incorporated, Kishk, Juliette and John Incorporated, and The Spaghetti Benders. There were also two numbered companies. Some sold accessories while others sold gourmet salad dressings, cookbooks, clothing items, and frozen foods.
The focus of the statements on Thursday was the defendant Angela MacDonald and her company Juliette and John Inc., whose product range includes cookbooks and salad dressings.
In March 2015, MacDonald was notified by the CRA that their tax claims were being reviewed and asked for additional documentation explaining the nature of the deal, a copy of the five largest sales invoices, and a detailed breakdown of gross sales.
Boudreau said a 24-page executive summary was received from MacDonald.
He testified that of the five booksellers MacDonald listed who ordered their cookbooks, none were in Nova Scotia.
He also said that when Juliette and John’s business account was checked in the months leading up to January 2015, there was less than $ 20 in the account, but the company had $ 16,200 in tax refunds in September 2014 and an additional 26,000 on October 14 US dollars received.
Draghici-Vasileau said the Crown offered no theory or explanation as to why the checks were not deposited into the account.
Two deposits totaling $ 42,000 were made in April 2015, and a check for $ 40,000 was written the following month to John Young, husband of the defendant Georgette Young.
The process will continue on Friday.