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‘Panama Papers’ probe leads to search warrants executed in Vancouver

Two search warrants relate to $77 million offshore tax evasion case
The Canada Revenue Agency announced Thursday that two search warrants were executed in Vancouver to find further evidence into a $77 million offshore tax evasion case related to the “Panama Papers.” Photo Mike Howell

The Canada Revenue Agency says two search warrants were executed in Vancouver Thursday to find further evidence into a $77 million offshore tax evasion case related to the “Panama Papers.”

Forty investigators were involved in what the agency described as a “major operation.” The agency did not reveal the location or locations of the searched property or properties, or whether anyone was arrested or charged.

“A CRA investigation uncovered a series of transactions involving offshore tax havens in an alleged attempt to evade payment of $77 million in non-resident withholding tax,” said the agency in a news release. “The relationships between the domestic and offshore entities involved were confirmed through various information sources, including records obtained through the ‘Panama Papers’ leak.”

Added the agency: “The CRA’s search today, along with other recent searches relating to offshore tax evasion and money laundering demonstrates that progress is being made to crack down on serious tax evasion.”

Diane Lebouthillier, the federal minister responsible for the agency, said in an emailed statement to the Courier that she was “happy to see that our investments are paying off.”

Lebouthillier said “fighting against tax cheats” is a priority of government and is why more than $1 billion was invested in the agency to “ensure that it has the tools it needs to get the job done.”

“These complex investigations can take months or years to complete and I’m encouraged and very pleased with the search warrants that were executed this morning,” she said of the Vancouver investigation. “The net is tigthening."

The investigation is one of 52 international and offshore tax evasion cases involving the agency. Five involve taxpayers named in the Panama Papers, which constitute 11.5 million files leaked in 2015 from the database of offshore law firm, Mossack Fonseca, which is based in Panama.

The documents have exposed how wealthy people have exploited offshore tax regimes, triggering investigations around the world. The documents were leaked by an anonymous source.

The Canada Revenue Agency said it has shifted its approach to criminal investigations in recent years to focus on more sophisticated tax schemes, including offshore tax evasion. The agency is currently investigating cases representing more than $400 million in potential federal taxes evaded.

A total of 36 people have been convicted in Canada, between April 2012 and March 2018, of tax evasion, with links to offshore money and other assets. Total tax evaded was $33 million. Court sentences totalled approximately $11 million in court fines and a combined 734 months in jail.

The average jail sentence for tax evasion is now 35 months.

Note: This story has been updated with comments from the minister since first posted. 

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