The RCMP has found a series of new and disturbing links between auditors at the Canada Revenue Agency and officials in Montreal’s construction industry, including a series of joint visits to the city’s casino, a golf trip, home renovations and a stalled audit, court records show.
A recent search warrant, obtained by Radio-Canada and The Globe and Mail, alleges nine CRA officials attended a Montreal Canadiens home game in late 2005 with the principals in B.T. Céramique, a company that had recently benefited from a lax audit by the federal agency, according to the RCMP.
Internal CRA documents obtained by the RCMP allege that an auditor who was not at the hockey game received an order at one point from one of her managers, Madan Kehar, to stop auditing B.T. Céramique because “she had done enough” on the file.
Another auditor who looked into the file, Nick Iammarrone, found almost nothing wrong with the company’s books. Both Mr. Kehar and Mr. Iammarrone were at the hockey game, according to the court document.
The search warrant alleges that B.T. Céramique eventually did $3,600 worth of renovations at a residence owned by Mr. Iammarrone, which the RCMP states was “compensation … for a lax audit.”
Subsequent audits of B.T. Céramique, conducted by other CRA officials, found major problems with the company’s books, including a series of fake invoices and shell companies that were used to avoid paying millions of dollars in federal taxes. The firm and its president, Frank Bruno, pleaded guilty to tax evasion earlier this year and were hit with a $1.3-million fine.
Mr. Bruno and Mr. Kehar, who retired from the CRA in 2006, kept a close relationship from 2006 to 2008 as the pair frequently went to the Montreal casino at the same time, according to the search warrant. In total, Mr. Kehar bought $12-million worth in casino chips between 2006 and 2010, while Mr. Bruno purchased $1.4-million in chips, with many of the purchases done shortly one after the other.
The RCMP is also laying out new details of a golfing trip to Las Vegas by Mr. Bruno and two other CRA officials, Adriano Furgiuele and Antonio Girardi, in the spring of 2005, “two months after the audit of B.T. Céramique.” The Mounties found that Mr. Bruno paid $2,000 in expenses related to the trip.
No charges have been laid as part of the ongoing RCMP investigation into allegations of corruption in the CRA’s Montreal office and none of the allegations in the search warrant has been proven in court. The CRA has suspended or fired a number of its employees in Montreal as part of its own internal investigation into alleged wrongdoing and corruption.
Mr. Kehar has launched his own lawsuit against the CRA, alleging that he is the victim of harassment because of a long-standing tax probe against him. Mr. Kehar said his reputation stands to be discredited, which would affect his ability to interact with CRA employees on behalf of his clientele in the private sector.
“I have done absolutely nothing wrong,” Mr. Kehar said in an interview.
The RCMP raided B.T. Céramique’s offices in 2008. In a safe, the Mounties found copies of an internal CRA document alleging that a shopping centre owned by another major player in Montreal’s construction industry, Antonio Accurso, had not declared any revenues since its incorporation.
“The fact that the three copies of the T-133 had disappeared from the CRA benefited Galeries Laval because the information was no longer at the disposal of the CRA,” the search warrant states, adding the forms were not supposed to leave the federal agency’s premises.