Four Canadian women are facing charges for faked invoices, expenses and sales. They have allegedly committed multiple instances of tax fraud, all of whom have pleaded not guilty and will be representing themselves in their upcoming court case despite suggestions to seek professional legal advice.
The women claim to own 10 companies from which they make sales in food and fashion. They have set up a complex scheme that allows money to be moved between the ten companies they own between them. With the money flowing between these companies, it has been difficult for the Canada Revenue Agency (CRA) to figure out who has what role in the scheme.
The defendants are claiming that they are being set up by the CRA and attempt to make light of their position by claiming they are ”housewives who make cupcakes”, one of the accused claims. However “The CRA has accused the women of inflating sales and operating expenses in order to receive higher GST and HST refunds.”
The women reported impressive sales figures yet had no employees or bank accounts or much proof at all into the legitimacy of their businesses. An investigation into their businesses proved no evidence to support the accused cases. Their tax refunds amounted to over $200,000 but their behaviour alerted the CRA when they attempted to return another $3 million.
This is a classic case of an attempt to abuse the Goods and Services Tax/Harmonized Sales Tax Returns to get false refunds. The CRA has been putting more emphasis on identifying tax schemes like this as this is not the first and won’t be the last time that someone attempts to abuse tax refunds with falsified records, a highly illegal and fraudulent activity.
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