Revenue Minister Jean-Pierre Blackburn, left, and Patrice Chouinard, director of Montreal tax Services, speak to reporters at a news conference in Montreal on April 8, 2009.Ryan Remiorz
The Canada Revenue Agency has been rocked by death threats against senior investigators who have been probing allegations of corruption against former auditors at the federal tax-collection agency, police said.
Three senior CRA officials recently received tuques with an embossed skull on them, while a spouse of one of the officials received a chilling phone call at home, police officials said. The warnings started late last year, when another CRA investigator was beaten up in a parking lot after a Christmas party.
According to information obtained by The Globe and Mail and Radio-Canada, the phone threat is potentially linked to a former CRA employee who was filmed by a security camera near the public phone where the call originated. The headgear is likely a reference to a television interview in March in which an anonymous official with ties to the CRA laid out allegations of internal corruption going back years with a tuque shielding his identity.
Overall, officials involved in the investigations said the threats are related to ongoing CRA and RCMP investigations into allegations that auditors targeted businesses, especially restaurants, seeking kickbacks in exchange for favourable tax rulings.
Previously unreleased RCMP search warrants state a group of CRA insiders told business owners that they faced large tax bills that could be reduced in exchange for bribes. The search warrants, which were executed earlier this month, allege the CRA officials operating out of the agency's office in Montreal obtained hundreds of thousands of dollars in cash or in bank drafts.
For example, CRA auditors started looking into the books of Restaurant Arahova in 2007, and told owners that they had found undeclared revenues of more than $3-million. One of the search warrants says the restaurant owners told police the amount was wildly inflated, but that they were tempted by an offer from a CRA auditor who said the matter could be solved for $250,000.
The warrant said the figure was negotiated down to $100,000, which was obtained by remortgaging a house, and was provided in $100 bills at a meeting in a CRA official's grey Acura.
However, the warrant said, one of the restaurant owners learned afterward that a business contact had gone through a similar situation. Angry, he asked his CRA contact to repay half of the amount, which he received at a Tim Horton's restaurant.
None of the allegations in the search warrants have been proven in court. In addition, the RCMP has found a number of cases in which businesses owners refused to pay.
For instance, a CRA auditor showed up one day at a restaurant called La Belle Place and brought the manager into the handicapped washroom, saying there would be a hefty bill related to unreported beer sales. The auditor said that for $90,000, "everything will stop," according to a search warrant.
The owners of the restaurant made no under-the-table payment, and paid a total of $200,000 to the provincial and federal tax-collection agencies.
The search warrants show that at least two other restaurant owners were solicited for $50,000 each by CRA auditors. One attempted shakedown was made in a public park.
The RCMP has arrested, interviewed and released half-a-dozen former CRA employees since the investigation started in the fall of 2008. No charges have been laid, but the investigation is ongoing.
The CRA has acknowledged that it has fired or suspended at least nine employees.
Former revenue minister Jean-Pierre Blackburn revealed the internal problems at the CRA in a 2009 news conference, giving details of a tax-avoidance scheme involving shell companies that allegedly benefited from the help of agency insiders.
The CRA has obtained guilty pleas in tax evasion cases involving three Montreal-based construction firms that used fake invoices to get their tax bills reduced. RCMP search warrants allege that the companies had the help of CRA insiders.