Interesting press release from CRA on individual who pled guilty to tax evasion charges.  One of the things he did was use a charity that he controlled to issue false receipts.

http://www.cra-arc.gc.ca/nwsrm/cnvctns/on/on100903-eng.html

News release

Deception, misappropriation nets London man tax fines and house arrest

London, Ontario, September 3, 2010 … Michael Hersey, of London, pled guilty in the Ontario Court of Justice in London on September 1, 2010, to six counts of tax evasion. Yesterday, Justice Gregory Pockele fined Hersey $52,865, which must be paid within 18 months. Hersey also received a six-month conditional sentence, and was ordered to perform 75 hours of community service within the next 10 months. The court fine is in addition to any taxes owed, as well as any interest and civil penalties that may be assessed by the Canada Revenue Agency (CRA).

Hersey, age 46, owned Professional Insurance Management Inc., a company that sold insurance products and investment vehicles. He also controlled another firm, Global Export Consulting, which provided logistical support to a charity Hersey helped found, Envision Global Charity, which was engaged in activities in Cuba. A CRA investigation revealed that, during 2003 and 2004, Hersey received a total of $187,395 from both his companies, which he did not report as income on his tax returns. Hersey used this money for living expenses, payment of legal judgments and loans. He also shared the income with his wife.

The Court also heard that Hersey acted as a financial advisor and tax preparer for two individuals who invested $326,000 through Hersey. When these individuals discovered that their investments were worthless, Hersey provided them with false charitable donation receipts totalling over $43,000 under the name of Envision Global Charity. Hersey included the false donation receipts in the individuals’ income tax returns, which he prepared himself. A CRA audit of Envision Global Charity resulted in the revocation of the organization’s charitable status, effective August 18, 2007.

As part of his conditional sentence, Justice Pockele ordered Hersey not to provide investment advice, or to prepare tax returns.

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 valid disclosure before they become aware of any compliance action being initiated by the CRA against them. These individuals 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 website at www.cra.gc.ca/voluntarydisclosures.

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

Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.