Prosecutors complete presentation of tax fraud case

SYDNEY — After five weeks of testimony, federal prosecutors completed presenting their case Friday in a $3.6-million tax fraud case involving a Cape Breton mother and her three daughters.

Prosecutors Mark Donohue and Constantin Draghicivasileau called 23 witnesses to the stand, mainly employees of Canada Revenue Agency.

Charged are Lydia Saker, 76, of Sydney Mines; and her daughters, Georgette Young, 49, of North Sydney; Angela Macdonald, 47, of Kentville; and Nadia Saker, 45, of Leitches Creek. All of the accused are representing themselves.

The family is alleged to have submitted false claims to CRA for tax rebates.

The four individuals plus 10 companies they operated face a combined total of 60 offences: 40 counts of fraud (Criminal Code offences) and 20 counts of filing false and deceptive statements (Excise Tax Act offences). The offences are alleged to have occurred between January 2011 and July 2015.

During that period, CRA paid out $275,960 in refunds to the companies along with another $81,399.61 which was applied to debts owed by the companies to CRA for a total of $307,360.

The accused filed for a total of about $3.6 million in refunds.

One of the accused, Georgette Young, began a cross-examination Friday of a key Crown witness, Michael Boudreau.

Boudreau is a criminal investigator with CRA who compiled the case against the accused after conducting searches at the homes of the accused, reviewing banking and other financial information including previous audits conducted by CRA.

Young questioned Boudreau on whether businesses can have one or more bank accounts.

Boudreau agreed that businesses can operate with more than one account but in his searches involving the accused, he could only locate two banks that held accounts for the accused.

Young asked if Boudreau called around to other banks to check on accounts to which he replied he needed some basis on which to do that noting his investigation through several sources only turned up two banks.

What emerged during the testimony from the Crown witnesses is a pattern of intercompany billing among the family businesses for everything from labour to management and marketing.

Some Crown witnesses testified to never ordering anything from the family enterprises but yet a receipt was submitted to CRA to receive a tax refund on the sale of salad dressing or for cookbooks to the company of the witness.

Other evidence included numerous receipts submitted indicating monthly milliondollar sales on items like salad dressing.

In examining the bank statements of the companies, there was little evidence to support such robust sales.

“We wanted to show that the filings were completely disconnected from reality,” said federal prosecutor Constantin Draghici-vasileau earlier this week, in addressing Supreme Court Justice Robin Gogan.

The trial had heard testimony from Boudreau showing that one accused used $58,000 from a line of credit to indicate business sales and claim an $8,960 tax.

The companies include Housewives in Heels, Artisan Hair Loss Therapy, Latatia Advertising, Maddie and Bella’s Children’s Clothing, New and Chic Incorporated, Kishk, Juliette and John Incorporated and The Spaghetti Benders. There were also two numbered companies. Some sold accessories while others sold gourmet salad dressing, cookbooks, clothing items and frozen food.

The trial will now continue on Tuesday.