For a while, Antonio Accurso's boat wouldn't even float.
The Quebec construction magnate had bought a 91-foot yacht in Florida in the 1990s, and brought it to a yard near Trois-Rivières, along the St. Lawrence, to be stretched into a 119-foot luxury vessel.
But the workers struggled to complete the multimillion-dollar transformation, frequently earning the wrath of Mr. Accurso. They had to start work on the hull over and over again, until the customized vessel was actually able to sail. In 2004, Mr. Accurso finally got what he wanted: a unique yacht with four king-sized beds, a six-person hot tub, mahogany walls and furniture, gold faucets and marble counters. In other words, a floating palace.
The ship first made news last year for its famous guests, including union leaders and elected officials involved in business dealings with Mr. Accurso's firms, leading to calls for a public inquiry into the construction industry in Quebec. Premier Jean Charest has so far resisted those calls, saying it is up to law-enforcement authorities to punish anyone involved in wrongdoing and promising to create a permanent New York-style anti-corruption unit.
Now the yacht is back in the public eye after two of Mr. Accurso's companies, Simard-Beaudry Construction Inc. and Louisbourg Construction Ltd., pleaded guilty on Tuesday to $4-million in tax evasion. An agreed statement of fact presented at the courthouse in Laval showed that as part of their scheme, the two companies submitted $19-million in non-deductible expenses. Of that amount, $1.7-million was spent on the construction of Mr. Accurso's yacht, called Touch.
Crown prosecutor François Lanthier said the evidence shows that "Louisbourg paid to build the Touch."
"Given the expenses were not incurred to generate business revenue for Louisbourg, the business could not claim those expenses," Mr. Lanthier said.
Mr. Accurso was the administrator of both Louisbourg and Simard-Beaudry at the time of the infractions, but he was not personally charged in the case. He has been replaced in the two companies by his daughter, Lisa Accurso.
The Canada Revenue Agency said the two construction companies submitted non-deductible expenses from more than a dozen firms as part of the tax-evasion scheme, although they did not state specifically what goods or services were obtained.
Still, documents show that Louisbourg tried to pass off $600,000 in purchases from a jeweller in Montreal, Bijouterie Everest. That company offers products from companies such as Rolex and Mont-Blanc, and has produced many Stanley Cup rings for the Montreal Canadiens.
There were also more than $5-million in invoices from Atelier Luc Laramée Inc., a company based near Trois-Rivières that did some of the fancy interior work on Mr. Accurso's yacht. While the court documents do not lay out the other work that was performed by the company, its owner, Luc Laramée, said he has also performed tasks on the personal residence of Mr. Accurso.
Louisbourg and Simard-Beaudry also made payments totaling $4-million to two companies - Entretien Torrelli Inc. and 3703436 Canada Inc. - that were described by the CRA as shell companies that emitted fake invoices. The CRA has charged the owner of these two companies, Francesco Bruno, with tax evasion. According to court documents, Mr. Bruno benefited from the help of CRA insiders as part of his scheme, which is being probed by the RCMP.
Jean Groleau, lawyer for Simard-Beaudry and Louisbourg, declined to discuss Mr. Accurso's involvement in the tax evasion or to answer questions about the specifics behind the scheme.
"After the execution of the search warrants [in 2009] my mandate was to approach Revenue Canada in order to settle the matter and to co-operate with the investigation. That's what we did," Mr. Groleau said.
In addition to paying back $4-million in taxes, the two companies were hit by a fine equal to the full amount of the tax evasion. The maximum fine would have been twice the amount of the fraud.
"One hundred per cent is generally what's imposed in similar cases, there was no factor that would allow us to veer away from the normal jurisprudence," Mr. Lanthier said.
Mr. Accurso's yacht is now listed for sale at $7.9-million (U.S.) by a company in Florida, which states that the ship generates $1-million (U.S.) in annual charter revenues. It can accommodate eight people, as well as seven crew members.
History Owned by Antonio Accurso, the yacht started sailing in 2004.
Visitors Guests include former Montreal city councillor Frank Zampino and the head of the Quebec Federation of Labour, Michel Arsenault.
Amenities It has four rooms with king-sized beds, and can accommodate a total of eight guests. Amenities include wireless Internet access, mahogany walls and a luxurious décor.
7 Crew members on the yacht, which has a cruising speed of 11 knots.
$7.9-million Current sale value of the boat, though it has generated $1-million in charter revenues this year.
Source: Fraser Yachts and Showboats International