Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Quebec Premier Jean Charest is reflected on a television screen as he responds to questions at the news conference marking the end of the fall session Friday, December 10, 2010, at the legislature in Quebec City.

Jacques Boissinot/The Canadian Press

The Canada Revenue Agency has fired six employees in Montreal and suspended three others without pay as part of a growing scandal into allegations that the tax-collection agency was infiltrated by rogue personnel.

The controversy goes back to 2007, when information from a police investigation into the Mafia led the CRA to start looking into the activities of some of its employees. The government is releasing little information on the situation, in which millions of dollars in tax revenue are at stake.

The CRA first revealed allegations of infiltration last year when it fired two people who are accused of interfering in tax audits of construction companies.

Story continues below advertisement

This week, two construction companies pleaded guilty to committing $4-million in tax fraud by claiming non-deductible expenses such as the construction of a luxury yacht and jewellery purchases. The firms also submitted fake invoices from two shell companies that had benefited from inside help at the CRA, according to CRA and RCMP search warrants.

On Friday, the CRA revealed the growing scope of the review into the activities of its office in Montreal, suggesting that the matter goes beyond the construction industry.

"Since December 31, 2008, the Canada Revenue Agency has terminated the employment of six employees and suspended three employees without pay at the Montreal Tax Services Office for a variety of misconducts," said Erin Filliter, a spokeswoman for Revenue Minister Keith Ashfield.

"Any misconduct by CRA employees as alleged in these cases will not be tolerated. Our government is supportive of this investigation and will ensure that the CRA co-operates with all investigations," she said.

A federal source added the number of people involved in the alleged fraud might yet be higher, as investigators are also concerned about the activities of people who have retired from the CRA.

The controversy is fuelling calls for a public inquiry into the construction industry in Quebec. Premier Jean Charest has refused, saying it is up to police and other authorities to punish anyone involved in wrongdoing. But critics are charging that this week's guilty pleas by the construction firms prove that court cases won't help the public understand how the wrongdoing occurred or who actually benefited.

In the House of Commons on Friday, the Bloc Québécois said the recently exposed tax-evasion scheme was designed to provide large amounts of cash "to pay the personal expenses" of the administrators of the two construction firms that pleaded guilty, Simard-Beaudry Construction and Louisbourg Construction.

Story continues below advertisement

"Now that it has gone after the companies that belong to [construction magnate]Tony Accurso, will the Canada Revenue Agency start looking into those who benefited from this money?" Bloc MP Diane Bourgeois asked in the House.

Jacques Gourde, the parliamentary secretary to the minister of National Revenue, said that CRA employees must abide by a strict code of conduct.

"Our government is committed to protecting its fiscal revenues from those who do not want to respect their obligations," Mr. Gourde said.

The CRA has said that between 2005 and 2007, three of Mr. Accurso's companies "funnelled close to $4.5-million" to two shell companies that issued fake invoices. Earlier this year, the CRA laid tax-evasion charges against Frank Bruno, owner of construction firm B.T. Céramique, accusing him of providing the fake invoices.

Court documents allege that when tax auditors started closing in on Mr. Bruno, one of his cousins, who worked for the CRA, proposed a "plan of action" to keep them at bay. According to the documents, Mr. Bruno opened a bank account containing $1.7-million in 2006 in the Bahamas with two CRA employees, including his cousin Adriano Furgiuele.

In addition, court documents filed earlier this year show the CRA rejected more than $1-million in research and development tax credits that Simard-Beaudry and Louisbourg claimed in previous years. A search warrant said that Mr. Furgiuele's brother Marcello was involved in the alleged scheme as the head of the Delvex Consulting Group.

Story continues below advertisement

An earlier online version of this story contained incorrect figures released by the Canada Revenue Agency. This version has been corrected.



Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies