National Post (National Edition)
Toronto realtor named in whistleblower’s list of secret Swiss clients
Lawyers fear audit paving way for criminal case
A Toronto real estate agent specializing in high-end condominiums has been ordered to turn over detailed financial records as part of a Canada Revenue Agency tax probe after being named on a list of secret Swiss banking customers leaked by a European whistleblower.
Biljana Stankovic, an associate with Re/Max in Toronto, was linked to five bank accounts with a balance exceeding $1 million, according to court records. Her name was revealed as part of a large cache of private financial data copied by an employee of HSBC Private Bank in Switzerland and seized by French police, who later shared information with Ottawa about Canadians on the list.
In 2008, Hervé Falciani, an employee with HSBC in Switzerland — a country famous for the secrecy of its banks — grew suspicious HSBC was being used to launder money and avoid taxes and made covert copies of 130,000 customer accounts. He then fled to France where police seized the documents the following year.
At the time, the Canadian government said it was assessing the information on the Falciani list and would take “aggressive action to recover money owed to Canadians.” According to the International Consortium of Investigative Journalists, which obtained a version of Falciani’s documents, there are 1,859 Canadians named holding assets with the bank worth $3.9 billion. Despite the splash the leak made internationally, however, it is not known how many of the Canadians named the government has pursued. There have been two previous court cases in Quebec that reveal the government has used the Falciani list to collect undeclared taxes.
Now, in a decision released on the last day of April, the Federal Court of Canada has ordered Stankovic to comply with the revenue agency’s demand for detailed financial information dating back years. The case appears to be the first openly linked to the Falciani leak to be argued at the federal level in Canada.
Stankovic’s lawyers fear the tax agency is actually gathering evidence for a criminal case under the guise of a civil tax audit, without allowing her the Charter protections she would have in a criminal proceeding. They also objected to the government’s use of the Falciani documents, calling them “stolen data.”
A tax audit is considered by the courts to be administrative while a criminal investigation is considered adversarial. In a criminal probe, an accused has Charter rights to keep her silence.
“In this case, clearly they have criminal prosecution in mind,” one of Stankovic’s lawyers, David Rotfleisch, told the National Post. Stankovic herself declined to speak about her case.
In the grand scale of the revelations contained in the Falciani leak, Stankovic seems a minnow among sharks. The data suggests she held assets and perhaps earned income from Swiss accounts though her tax records show she declared no assets or income from the accounts on her income tax returns, according to court records.
In a telephone conversation with a tax agent she denied having Swiss bank accounts, court heard. When told of the leaked information about her accounts, her lawyer at the time told the CRA she would only make full disclosure if the agency agreed to apply no interest or penalties and grant her immunity from prosecution, an offer the CRA refused.
Federal Court Judge James Russell ruled the government’s demand for financial data was valid and ordered Stankovic to comply, including providing information from tax years 2006 through 2014, details on a condo in New York, her HSBC accounts, other bank accounts, holdings in Britain and information on her relationship to several corporations.
“Possible future criminal proceedings do not excuse a taxpayer from compliance,” Russell wrote in his decision.
Rotfleisch said he disagrees with the verdict and, while he had no comment on his client’s next steps, believes there are grounds to appeal.
Falciani, meanwhile, is involved in a court battle of his own.
Switzerland still wishes to prosecute him for financial espionage and data theft. Swiss authorities have requested his extradition from Spain, where he lives under high-security sponsored by the United Nations while continuing his efforts to help governments and organizations counter banking secrecy.