The RCMP has arrested and charged six people after thousands of investors and the Government of Canada lost millions of dollars in a fraudulent investment scheme.
The investigation began in April 2012 when the RCMP received information that people were involved in a possible tax avoidance scheme. The RCMP Financial Crime members commenced an investigation, which included interviewing witnesses and suspects, the execution of search warrants and the analysis of thousands of pages of documentation.
As a result of their investigation, the RCMP determined that since 2004, at least six individuals enticed thousands of investors to participate in an alleged illegal tax shelter. Investors were led to believe that they could legitimately purchase a company’s business losses that could then be used to lower their taxable incomes. It is alleged that many of these losses were fraudulent because the companies involved with the accused did not have agreements for their losses to be transferred over to third parties. In other instances, the businesses that provided a large portion of the losses were controlled by the accused. It is also alleged that these losses were fabricated. The accused received a percentage of the allegedly fictitious losses. In many instances, these business losses resulted in substantial illegitimate income tax refund cheques being issued to these claimants off the backs of taxpayers.
Those charged are Vincent Villanti, 66, Shane Davidson Smith, 46, David Prentice, 52, Ravendra “Ravi”Chaudhary, 65, Andrew Lloyd, 42 and Joe Loschiavo, 49.
They’re scheduled to make their first court appearance today. They’re charged with two counts of fraud over $5,000 and commission of an offence for a criminal organization. This is an ongoing investigation and further arrests and charges are possible.
The federal government may have more than $200 million since 2004 due to this fraud. The companies used by the accused to run this scheme included: Integrated Business Concepts (IBC), Synergy Group 2000, Cason Global Wealth Association (CGWA) and IBCA 2009.
CRA, FINTRAC and the Ontario Securities Commission assisted in the investigation.