Rizzuto family does battle with the tax man

The Montreal godfather is in jail, his eldest son was recently murdered, and now his parents and children have problems with the tax man.

The latest woes to hit the family of Vito Rizzuto include tax disputes on two fronts, with patriarch Nicolo Sr. accused of evading taxes on millions in Swiss banks while four other Rizzutos are due in court over the sale of a defunct Ontario ad company.

Filings at the Toronto offices of the Tax Court of Canada show that Vito Rizzuto's wife and children made $1.6-million from the sale of shares in Olifas Marketing Group Inc.

OMG had contracts with cities including Toronto, Montreal and Ottawa to place ads on outdoor garbage cans.

The contracts became controversial in February of 2003 after Montreal newspaper La Presse revealed that Vito Rizzuto was charged with impaired driving while at the wheel of an OMG-owned Jeep.

Mr. Rizzuto said at the time that an OMG executive who was a friend, Michael Strizzi, lent him the Jeep, but that he otherwise had "nothing to do" with the company. OMG founder Salvatore Oliveti said he was being smeared because he was Italian.

In fact, Mr. Rizzuto's wife and three children at the time owned 8,750 OMG shares. Three weeks after the La Presse story, they sold the shares for $1.6-million, the Canada Revenue Agency alleges in court filings.

The documents don't reveal what percentage of the privately traded OMG the Rizzutos held. However, the previous year, half of OMG's shares were sold to a Mexican office-supplies firm in a deal worth $6.2-million (U.S.)

The case is before tax court because the revenue agency won't allow the Rizzutos and other OMG shareholders, including the Oliveti family, to claim a capital gains deduction on the sales of OMG shares.

The Rizzutos' OMG shares were held in trust by an Ontario man, Nino Campoli. The documents don't say if he is a relation of onetime OMG director Frank Campoli, who was described in another court case as "Vito's man in Toronto."

In that previous case, another peek by the authorities into the finances of the Rizzuto family, the court heard allegations that Mr. Rizzuto and his mother, Libertina, used fronts to buy $1.4-million in shares in a junior mining company, Penway Explorers Ltd.

Meanwhile, in Montreal, Mr. Rizzuto's 85-year-old father, Nicolo Sr., who is on probation for possession of proceeds of crime, has been summoned to appear in Quebec Court on Thursday on charges he failed to declare $728,000 in interest revenues.

In previous court filings, the government had alleged that Nicolo Sr. was the real owner of $5.2-million deposited in three bank accounts in Lugano, Switzerland, by Libertina Rizzuto, his wife, and other people acting as fronts.

Vito Rizzuto has been identified in court documents as the top Mafia leader in Canada.

In court proceedings, the authorities have alleged that he and his associates are involved in cocaine and hashish trafficking, extortion of small businesses, stock manipulation, money laundering and loan sharking.

However, Mr. Rizzuto is in jail in the United States for racketeering and his five top captains pleaded guilty last year to various charges after an RCMP crackdown.

In December, Mr. Rizzuto's eldest son, Nick Jr., was gunned down on a Montreal street.