Easy money

The Compass - - Editorial -

This is edi­to­rial with two mes­sages: one, that in this elec­tronic age of checks and bal­ances, it can still be re­mark­ably easy to take mil­lions from a na­tion’s tax agency. The other mes­sage? That judges rec­og­nize that pun­ish­ments have to fit crimes, re­gard­less of leg­is­la­tion.

First, here’s a thumb­nail of the crime: us­ing some­thing called an RC366 form down­loaded from the Canada Rev­enue Agency web­site, On­tar­ian Kevin Plange changed bank­ing in­for­ma­tion for seven com­pa­nies, putting his bank ac­count num­bers in place of theirs so that their re­funds would go to his ac­counts.

Hardly a so­phis­ti­cated crime by a for­mer arts stu­dent with a gam­bling prob­lem.

He was caught, and the CRA even is­sued a news re­lease on the con­vic­tion - ne­glect­ing, of course, to say just how fright­en­ingly easy it was for Plange to steal a colos­sal amount of money from the agency.

As the judge wrote, “Mr. Plange down­loaded the RC366 form from the CRA’s web­site and placed his per­sonal bank­ing in­for­ma­tion on the forms along­side the names of sev­eral cor­po­ra­tions. He filled out the forms and mailed them in. The form con­sists of one page with very few boxes that need to be filled in. One box re­quires the name of the cor­po­ra­tion and its busi­ness num­ber. An­other box re­quires the di­rect de­posit rout­ing in­for­ma­tion for the new bank ac­count. The only other part of the form that is filled in is the cer­ti­fi­ca­tion of the of­fi­cer/di­rec­tor of the com­pany with a con­tact tele­phone num­ber.”

By the time the CRA fig­ured out some­thing was amiss, they’d put $41,831,073 into Plange’s ac­count.

So, not ex­actly rocket science. But fright­en­ingly ef­fec­tive. (The agency re­cov­ered all of the money in the end: Plange had only spent $15,000, which he re­paid.) Here’s the judge again: “Mr. Plange’s un­so­phis­ti­ca­tion is ex­em­pli­fied by his near com­plete lack of knowl­edge about how the sys­tem worked and his in­abil­ity to per­son­ally cap­i­tal­ize on his ex­ploita­tion of this ob­vi­ous short­com­ing in the CRA’s process of re­fund­ing monies to cor­po­ra­tions.”

And that’s the other part of this edi­to­rial: un­der the for­mer Con­ser­va­tive gov­ern­ment’s manda­tory min­i­mum sen­tenc­ing pro­vi­sions, Plange, be­cause he de­frauded the CRA of over $1 mil­lion, was fac­ing a min­i­mum sen­tence of two years in prison.

The $1-mil­lion fig­ure was sup­posed to mark the crime as ma­jor fraud.

But the judge de­cided that the two-year min­i­mum would be cruel and un­usual punishment, be­cause it didn’t take into ac­count the cir­cum­stances of in­di­vid­ual cases, only the bare fi­nan­cial num­ber the fraud in­volved.

Plange re­ceived an 18-month sen­tence.

And the CRA? They might class this case as a suc­cess, say­ing, as they did in their news re­lease, “The CRA pub­li­cizes con­vic­tions in cases of tax eva­sion to main­tain con­fi­dence in the in­tegrity of Canada’s self-as­sess­ment tax sys­tem.”

But as the judge pointed out last month, “Bluntly, it was ab­surdly easy.”

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